Articles Posted in Tort Reform

From the American Association for Justice:

The New England Journal of Medicine published a new study on the effects of tort reform on emergency room department treatments. The researchers examined Medicare emergency room fee-for-service claims data from 1997-2011 in Texas, Georgia and South Carolina, all of which changed their emergency care liability standard from negligence to gross negligence. They found that such reforms did not change doctors’ testing behaviors and that "physicians are less motivated by legal risk than they believe themselves to be."

 "We did not find evidence that these reforms decreased practice intensity, as measured by the rate of the use of advanced imaging, by the rate of hospital admission, or in two of three cases, by average charges. Although there was a small reduction in charges in one of the three states (Georgia), our results in aggregate suggest that these strongly protective laws caused little (if any) change in practice intensity among physicians caring for Medicare patients in emergency departments."

Dr. Rebecca Hierholzer is an emergency room doctor who practices in Missouri (and perhaps Kansas).  She reportedly believes that the citizens of Missouri – some of whom she has undoubtedly treated as patients, some of whom she may know socially  – are incapable of following the law when called to serve as jurors.  She reportedly believes  her fellow citizens should be restricted from awarding the fair value of pain, suffering, disfigurement and loss of enjoyment of life by the imposition of arbitrary caps on compensatory damages.

Now, there are lots of doctors who share that view (and, by the way, lots that do not).  So the fact that a doctor does not trust jurors is not something causes a blip on my radar screen.  Telling me that a doctor wants to limit responsibility for medical errors is like telling me that he or she wears a white coat at work.

So why write about Dr. Hierholzer?  I write because of the remarks attributed to her in an article in the St. Louis Post Dispatch about her effort to limit the rights of jurors, the injured and the dead in Missouri:

 Tennessee personal injury and wrongful death lawyers may be interested in my newest book,  Compendium of Tennessee Tort Reform Statutes and Related Case Law, 2009-2013 (2nd ed.)

The title says it all: the 180+ page book is a collection of Tennessee tort reform statutes and the cases interpreting those statutes.  The case law citations are current through September 15, 2013.  Hundreds of the first edition of the book were sold last year and interest remains high this year.  

The fact of the matter is that Tennessee tort law is slowly being codified and those tort lawyers who ignore statutory changes in the law will quickly find themselves in trouble.  Simply skimming the Table of Contents in this book might help you avoid bringing a claim that either no longer exists or that has been severely limited under the revised law.  (By the way,  one of those new statutes provides that if a motion to dismiss is granted your client may be held liable for up to $10,000 of the defendant’s attorneys’ fees.)

Nashville is the home of country music, and country music is filled with wonderful stories. I envy the ability of country music songwriters to tell a complete story in three minutes, purposefully injecting  a handful of magical words called "the hook"  to make that story stick in your mind and heart forever.   "He Stopped Loving Her Today" is a famous example.

Stories about life and love, adversity and hope, tractors and trucks. About death and broken hearts, revenge and forgiveness,  patriotism and God. Sometimes downright silly, sometimes frighteningly real, country songs, written and performed by those with a true gift,  result in unforgettable stories.

But there are no songs about tort reform. You would think the subject is ripe for such a song – there is more than enough human tragedy in tort reform to give rise to one heck of a country song.

During the last five years the Tennessee General Assembly has passed dozens of bills that can be properly classified as "tort reform" statutes.   Over fifty cases have already interpreted these statutes.

My latest book, Compendium of Tennessee Tort Reform Statutes and Related Cases (2nd ed. 2013) has the full text of all of these statutes and a summary of each of the cases interpreting them. The book will help you readily identify which segments of Tennessee common law have been modified by statute and additional statutes that change the practice of tort lawyers.

The 187-page book is available for purchase by clicking on the link embedded in the title.

My last two posts (here and here) have discussed financial and related information about Tennessee’s largest insurer of physicians that I hope is of interest to Tennessee medical malpractice lawyers and patients.  Now I am taking out my crystal ball and looking in the future of SVMIC’s defense of medical malpractice cases.

Before I get there, let’s think about Business 101.  Businesses exist to produce profit.  Profit is the difference between revenue and expense.  If revenues exceed expenses, there is profit.  If expenses exceed revenues there is a loss.  Losses are bad, profits are good. (OK, I told you it was Business 101.)

There are basically two ways that any going concern can increase profit.  First, it can increase revenue. Second, it can decrease expenses.  

Last week I wrote a post titled " State Volunteer Mutual Insurance Company -2012 Financial and Claims Data" that resulted in an unusual number of emails and phone calls.  To those that took the time to reach out and thank me for the information, thank you – I appreciate your efforts.

One caller brought up an excellent point that needs to be shared.  I mentioned that I thought SVMIC was seeing an increase in the number of insureds because of increased competition and expanding group practices (if a physician joins an existing group that does not do business with SVMIC the insurer loses an insured).  The caller pointed out that another reason for the decline in the number of SVMIC insureds is the fact that more and more doctors are being employed by hospitals.  These doctors then fall within the insurance package carried by the hospital, and have no individual need to buy coverage (except perhaps for tail coverage for their prior work history).  This phenomena  impacts other professional liability insurers as well, but certainly impacts SVMIC given its dominating percentage of the professional liability market for Tennessee physicians.

The other point that people mentioned was the issue of the increasing amount of money spent on defense costs in Tennessee medical malpractice cases.  I noted that the company indicated defense costs had increased over fifty percent in the last five years.  Remember, this has occurred even though the number of lawsuits filed against the company’s insureds has decreased significantly over the last five years.  I cannot share that percentage decline in the number of lawsuits filed against SVMIC insureds in the last five years – I don’t think that information is publicly available.  But, in the fiscal year ending June 30, 2012, there were 374 medical malpractice (now called health care liability) cases filed in Tennessee’s circuit courts.  Five years earlier, in the fiscal year ending June 30, 2008, there were 537 medical malpractice cases filed in our circuit courts. That is a decrease of 153 cases, a 30 percent decline.

State Volunteer Mutual Insurance Company (SVMIC), Tennessee’s bedpan mutual, has been around almost forty years.  Started by doctors for doctors, it writes more medical malpractice insurance coverage for doctors and their extenders than any other professional liability insurer in Tennessee.

The company is insuring a decreasing number of doctors in Tennessee, in part (my guess) because of aggressive marketing and rating-setting by other insurers and an increasing number of doctors joining groups.  The number of SVMiC-insured doctors in 2012 was 14,268, down from 15,501 five years ago.

The company now has $1.169 billion in assets, having broken the billion dollar barrier in 2009.  The company has reserved $560 million to pay claims and claim expenses.  What does this mean?  It means that if the company was able to settle or resolve every case for the reserved amount, and pay predicted expenses for defense counsel and such, the company would have $464 million to return to its policyholders.   In fact, the surplus is probably much greater than that.  History has demonstrated that the company tends to over-estimate its future loss payments and claim expenses, a conservative approach and one which I do not suggest is inappropriate in any way.