Capital Goods - April 2011

Objecting to trial lawyers
By Scott Mooneyham

More than any other profession, trial lawyers have been identified with Democrats. More than 90% of their political fundraising goes to that party, and the percentage might be higher in North Carolina. Last year, a political action committee controlled by North Carolina Advocates for Justice — a trial-lawyer group — doled out $204,000 to Democratic legislative caucuses. The state Republican Party got $1,000. The link is understandable. In civil suits, trial lawyers usually go up against business interests traditionally allied with the GOP.

But despite the riches such litigation has gained some of them, trial lawyers may have been among the biggest losers when Republicans won control of the state legislature in the last election. Members of the new majority in both houses quickly served notice they would wade into one of the trial lawyers’ biggest markets — medical malpractice. Legislation work-ing its way through the General Assembly would limit noneconomic damages, for things such as pain and suffering or disfigurement, and create higher negligence standards to sue emergency-room doctors. In addition to the bill, new Speaker Thom Tillis has set up a special House committee to do nothing but focus on tort reform.

Hospitals and doctors, not surprisingly, are more than happy to see the Republican majority take on the trial lawyers. They’ve argued for years that North Carolina policymakers needed to do more to hold down liability-insurance rates, particularly for such specialists as obstetricians and neurosurgeons, who face the greatest exposure to lawsuits. Supporters says the damage caps will help bring down medical costs by reducing the practice of defensive medicine — physicians trying to protect themselves from possible legal action by ordering more tests than needed — and by attracting more doctors to what will be a more doctor-friendly state. “I think this will help bring stability to the insurance market,” says Sen. Tom Apodaca of Hendersonville. One of the sponsors of the damage-cap bill, he and his Republican colleagues like to point to Texas as an example of the good that can come from damage caps.

Voters there approved an amendment to their state constitution in 2003 to limit the amounts of medical-malpractice awards. Eighteen months later, the number of malpractice cases filed had dropped by half, the number of doctors practicing and insurers doing business in the state had increased, and insurance rates had fallen. Republicans here say the same can happen in North Carolina. They’ve particularly been pushing the notion that more doctors will mean more competition in the health-care marketplace. That competition, along with less defensive medicine, will lead to lower medical costs, they say.

A recent study puts the annual cost related to medical liability at $55.6 billion, 2.4% of the nation’s total spending on health care. But supporters of damage caps may have missed comments by the study’s authors about the defensive-medicine genie already being out of the bottle. The Harvard researchers concluded that, although the cost of defensive medicine is substantial, it’s unlikely to be a source of significant savings. Cap or no cap, doctors and hospitals aren’t going to curb the number of tests or any other costly lawyer-advised practices intended to save them in the event of a lawsuit. Not now, not after they’ve become standard practice.

Dick Taylor, CEO of North Carolina Advocates for Justice, says he doesn’t hear any hue and cry for medical-malpractice reform. He notes that the number of malpractice lawsuits in North Carolina declined in 2009 and that premiums for malpractice insurance are no longer rising. He and his group have been trying to sell the position that a damage cap might run afoul of the state constitution, which implies that juries — not legislators — should decide damages. They’ve even enlisted the help of I. Beverly Lake Jr., a former Republican chief justice of the state Supreme Court, to write letters to legislators making that case. “We hope, at the end of the day, that whatever happens is not devastating to people’s rights for just compensation,” Taylor says.

But if he missed hearing the outcry, Taylor certainly saw the implications of November’s election. Republicans pushed for medical-malpractice reform long before they gained control of the General Assembly. Here and elsewhere, it’s been a pet issue for the GOP. The two sides like to portray the debate as about policy, not politics. Sometimes separating the two isn’t so easy. Putting limits on medical malpractice will damage a longtime Republican nemesis. It could also make that nemesis fighting mad come the next election. As always, to the victor go the spoils.

Scott Mooneyham is the editor of The Insider, www.ncinsider.com.