The Malpractice Blues

By Richard Lacayo

With the sort of single voice that is rarely heard in their contentious profession, representatives of the nation's lawyers last week put themselves on a collision course with the nation's doctors. The issue is medical malpractice, and that is about all that the combatants agree on. Convinced of their diagnosis that crippling malpractice insurance rates have been caused by a malignant surge of lawsuits, physicians prescribe legislative relief, and lots of it. Lawyers hold to their brief that doctors, like manufacturers or architects, should be liable for mistakes. Making its position unequivocally clear, the American Bar Association voted unanimously at its midyear meeting in Baltimore last week to oppose proposals by the American Medical Association that would change state laws to limit malpractice claims and awards.

"The state legislatures have to decide whether they want a special- interest court system for physicians," says Talbot D'Alemberte, dean of Florida State University Law School, who chaired the A.B.A. committee that recommended rejection of the A.M.A. proposals. "It's now a legislative battle." Indeed, the politics of protest are already under way. In Massachusetts last week, many obstetricians were refusing new patients in a fight against rising insurance rates. In Georgia, where insurers have requested rate increases averaging 38%, 1,500 doctors marched on Atlanta two weeks ago to shout support for a legislative effort to restrain malpractice lawsuits. Some just say it with a bumper sticker: LET THE LAWYERS DELIVER THE BABIES.

The legal reforms that the doctors want, and the lawyers oppose, are technical but important. For example, the A.M.A. proposes eliminating punitive damages, and seeks a cap on "noneconomic" damages awarded for pain and suffering or mental anguish, which it says account for 80% of the dollars paid over the $100,000 level. It also wants a victim's compensation from such sources as medical or unemployment insurance deducted from court awards. Most bitingly, the doctors have called for a slidingscale limit on "contingency fee" arrangements, whereby lawyers take on a case for a sizable share (often one-third) of any settlement or court award. Doctors grumble that such fees encourage lawyers to press for outrageous judgments as a way of fattening their own take. But without contingency agreements, lawyers counter, only the wealthy could bring suit.

How such legal changes might affect malpractice victims is illustrated by two cases in California. David Berg, once an enthusiastic athlete and honors student at the University of South Dakota, now lies in a vegetative state in a California hospital bed. In 1980, during minor elective surgery, he suffered severe brain damage; his lawyer blames ananesthesiologist's error. The hospital and doctors settled out of court for monthly payments that could top $14 million if Berg survives for more than 20 years. Berg's attorney, Richard Aldrich, who took the case on a contingency basis, will get $5.3 million of that.

"If the case came into my office today," says Aldrich, "I wouldn't touch it." Berg's was one of the last major settlements reached before the California Supreme Court upheld portions of a new law that put a cap on court awards for pain and suffering and on contingency fees. That rule applied to Insurance Salesman Harry Jordan when he sued because surgeons mistakenly removed his healthy left kidney instead of his cancerous right one. Unable to work, he requires eight hours of dialysis three times a week. A jury awarded Jordan $5.2 million, but the cap law compelled the trial judge to slash the amount dramatically. To avoid an appeal, insurers paid Jordan $1.2 million.

Did Berg get too much? Jordan too little? The arguments and counterarguments spin like windmills in a storm. Doctors charge that extravagantly punitive lawsuits are driving many from high-risk specialties; lawyers countercharge that patients need the right to sue because medical societies rarely drive out low-quality practitioners. If doctors cry that between 1980 and 1984 the average malpractice award jumped 63%, to $660,123, lawyers may retort that half of all awards made in that period were below an unchanging median sum of $200,000. The average annual charge for malpractice insurance coverage may have increased 79% between 1976 and 1984, but doctors' total income went up 89% at the same time.

There are many reform proposals in addition to those the A.M.A. is urging. One is to base insurance fees on a doctor's individual record. Higher rates for physicians with many malpractice judgments could mean lower rates for competent physicians, and might even price inept doctors out of the market. University of Virginia Law Professor Jeffrey O'Connell, the co-developer of no-fault auto insurance, has proposed a system that would allow a doctor to pay for a victim's economic losses in exchange for being free of further liability. A 1985 Illinois law provides for pretrial panels to rule on the merits of a proposed malpractice suit; the state supreme court is expected to rule this year on whether the panels are constitutional.

So the A.M.A. and A.B.A. war on, with no sign yet of a meeting ground. Representatives of the two groups have got together, the last time two months ago, but nothing much was accomplished. According to James Todd, the A.M.A.'s senior deputy executive vice president, the lawyers "would sit and listen and then promptly give us a lecture on plaintiff rights and judicial history. The greatest frustration is that no one who can do something about it is looking at all the facets." The bitterness between the two professions by now is deeply felt, and lawyers in particular may feel they have little need to bend since they benefit from the status quo. But if attorneys decline to compromise, they could find reforms, even the least palatable ones, imposed on them.

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With reporting by Scott Brown/Los Angeles and Arturo Yanez/ Chicago, with other bureaus