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Next year’s midterm election will include a ballot proposition asking California voters to raise the $250,000 cap on medical malpractice lawsuits in what amounts to a race between attorneys, patients and physicians.

The Fairness for Injured Patients Act (FIPA) will appear on the Nov. 8, 2022 ballot. It would change the Medical Injury Compensation Reform Act (MICRA), which was signed into law by Gov. Jerry Brown in 1975 with support from the California Medical Association (CMA). MICRA has not been changed since it was enacted. Advocates for injured patients believe it’s time.

 

Original intent

MICRA’s malpractice awards are divided into two categories: economic and non-economic loss. Under non-economic loss, there is a “pain and suffering” clause, which is currently capped at $250,000. Doctors say the cap is there because of the ambiguity of what “pain and suffering” means to an individual. However, proponents of lifting the cap — a “yes” on the ballot — argue it tells an injured patient that their life is only worth $250,000.

The original intent, according to the CMA, was to make access to care easier for patients because paying more in malpractice fees can bleed costs onto patients. But supporters of the ballot measure say that changing the law would bring more accountability to health care.

Dr. Mark Alson, president of Sierra Imaging Associates and board member of the Fresno Madera Medical Society, said ads supporting the ballot measure are misleading, and that the public must be educated on the ramifications.

“MICRA does not place a cap on malpractice awards per se. It places a cap on a very specific part of malpractice awards — just the pain and suffering part. So what that means is that an injured patient is still able to get 100%, without a cap, of any economic damages and any medical compensation for anything needed in the future. All that stuff is not capped. What is capped is pain and suffering, and the reason that’s capped is because that’s very nebulous,” he said.

The medical community says that runaway malpractice costs because of trial lawyers is one of the factors that drive up health care costs.

“This is being written by and for trial lawyers so they can make money,” Alson said.

A portion of a doctor’s overhead is designated to medical malpractice insurance. If those costs skyrocket, doctors are left with few options — charging more to private insurance or leaving the city or state to practice elsewhere.

Charging more for malpractice coverage would most likely hit the consumer in the form of deductibles and copays, according to Alson.

 

Doesn’t help the shortage

In areas where there is already a doctor shortage, like in the Central Valley, some doctors won’t find it worth practicing here.

“What’s real important is not to have costs just going up out of control. That drives doctors out of the state, that drives up the cost of health care. All of that is what MICRA was intended to do,” Alson said.

But according to Iowa-based Nicholas Rowley, supporter of the FIPA ballot measure, the law was put in place because insurance lobbyists and politicians convinced the public and other legislators that there was a malpractice crisis. The law was intended to reduce skyrocketing insurance rates and keep doctors practicing in California.

“It was a lie. It was propaganda and the proof is in the pudding,” Rowley said. “Did insurance rates go down? No, they went up.”

But doctors believe trial lawyers want to make it more lucrative for themselves.

Most of the funds and campaigning have come from Rowley. Ballotpedia reports he has given $3.7 million in support of FIPA. He founded Trial Lawyers for Justice, which has donated $500,000.

“I’m a big proponent of health care and access to health care,” Rowley said. “Medical negligence is the third-leading cause of death. Why is that? It’s because we have a medical board that doesn’t police its own.”

He says that the 1975 MICRA law puts a one-size-fits-all value of $250,000 on a human life.

“It hasn’t been adjusted to the tune of $1,” Rowley said.

 

Frivolous or not?

Charles Johnson, chairman of FIPA, became an advocate for medical malpractice reform after his wife died after giving birth to their second child — a result of medical negligence.

People speculate that FIPA will result in more frivolous lawsuits, and Alson says that patients may end up getting less money.

“It’s great for the trial lawyers, but you know, the way it’s written, patients may get less,” he said. “They’re pushing this as a change to MICRA, but really what they’re doing is they’re changing the whole system.”

Johnson says it won’t result in frivolous lawsuits because the ballot measure has been specifically written with provisions to prevent them. Attorneys will be required to meet a burden of proof before it can be taken to trial, he said.

Data from Consumer Watchdog, a nonprofit patient safety advocacy organization, show that states with no monetary cap on awards have a higher number of physicians per capita than states such as California with caps. And while there is no evidence that lifting the cap will drive physicians out of state, Central Valley doctors are fearful because of how slim the physician supply already is.

Dr. Alan Kelton is a teaching physician at UCSF Fresno and past president of the Fresno Madera Medical Society. He’s also on the credentialing committee for Sante Health Systems, so he is familiar with the malpractice lawsuit process.

“If the amounts for malpractice exceed their capacity to earn an income, doctors will either move, doctors will retire early, or doctors will limit their practices to very limited aspects of care,” Kelton said.

 

Swarm incoming?

To add to the issue, about 30% of doctors in the Central Valley are over age 60 and will retire soon. Some doctors believe the ballot measure could lead to early retirement for many.

“If somebody from out of state is funding this and actually created this law, how does that help the citizenry of California to regulate business in California?” Kelton said.

Attorneys have been gearing up for Covid-related lawsuits, and measures like this could allow for a swarm of them, Kelton said.

He added it is a common fear for doctors — being sued by their patients for things out of their control.

“On average, one in two physicians are sued in their life of practice,” Kelton said.

He says most malpractice lawsuits have nothing to do with bad practice because of the amount of training and experience physicians go through — a four-year college degree, medical school and residency training. Kelton says many of the lawsuits that end up going to trial are in favor of the physician, and he believes it’s due to the fact that these lawsuits don’t always point to the physician’s negligence. Sometimes it’s due to a bad outcome or miscommunication about what happened, he said.

“With the new system, patients can be paid in lump sums and lawyers will be able to take much larger amounts of that money from the patients,” Kelton said.

Kelton said that about 80% of malpractice lawsuits are settled before they go to court. It also takes about two years to go to court, and average $100,000 or more in expenses.

 

Fight for justice

This was Johnson’s experience with his late wife. He was pressured by his attorney to settle. His attorney threatened to withdraw from the case if he didn’t do so, he said. Johnson said these scenarios are a result of the trials costing more than the outcome can give. He ended up representing himself against Cedars-Sinai Medical Center.

For this reason, proponents say that fighting for justice to win a malpractice suit is not worth the effort, even though there are many examples of suffering.

Carmen Balber, executive director of Consumer Watchdog, has been working on this measure since she started with the nonprofit more than 20 years ago. She says the cap prevents victims of medical malpractice from getting justice when they’re harmed.

“People who have cases that are capped like that simply don’t get attorneys,” she said.

Dr. Don Gaede, president of the Fresno Madera Medical Society and vascular medicine physician, said it would be expensive for doctors to keep practicing because of the removal of the $250,000 cap.

“It’s going to increase all of our health care costs and we already have a shortage of doctors, especially in our Central Valley and this is going to exacerbate that,” Gaede said. “We have a lot of rural clinics here, Medi-Cal clinics that have a pretty small profit margin and so if their malpractice rates go up significantly, that’s going to essentially put them out of business and it’s also going to encourage doctors to leave the area.”

Medi-Cal offers doctors slim reimbursement rates compared to larger metropolitan cities in the state, which makes it difficult to recruit physicians to the Valley.

Part of the reason for increased medical care costs is due to a chilling effect of lawsuits against doctors. Because of this, doctors tend to run more tests than they need. That cost gets forwarded to the patient.

But proponents seek change for more accountability.

“When a hospital sees no financial impact of causing harm, they have no financial incentive to improve their practices to make sure it doesn’t happen again,” Balber said.