Lawmaker Who Wrote Legislation to Limit Malpractice Damages Now Says It’s Bad Law

In 1975, the California Legislature passed the Medical Injury Compensation Reform Act (MICRA). It was an effort to address what some people deemed a malpractice insurance “crisis” that was boosting insurance premiums and driving doctors out of the state.

The solution to the perceived-or even nonexistent-problem, as recounted by Los Angeles Times business columnist Michael Hiltzik last week, was to impose “draconian restrictions on patient lawsuits.”

Such measures, which deprive people of rightful redress of harms they suffered at the hands of medical professionals, have become fashionable. We have addressed the tsunami of misinformation about these mean-spirited, hurtful efforts to limit malpractice judgments many times-here and here, for example.

Hiltzik brings new perspective to the so-called “medical malpractice reform” movement courtesy of Barry Keene, the former California legislator who advocated for MICRA. The Act made malpractice cases more difficult to bring and less expensive to defend and, as Hiltzik writes, “has destroyed the ability of large segments of California patients to file malpractice lawsuits. It’s not uncommon for those who sue their doctors and win to see their damage awards slashed by hundreds of thousands of dollars.”

Today, more than a generation later, the retired Keene says MICRA is grossly outdated.

Like so many other states, California’s MICRA capped all damages in malpractice cases except for the victim’s medical bills and economic losses (typically lost earnings) at $250,000. That means that “pain and suffering,” mental anguish and loss of quality of life are all subject to the cap.

That sum from 1975 was not indexed to inflation; in 1975 dollars, Hiltzik says, $250,000 is worth less than $58,000 today. If it had been inflation-indexed in 1975, the cap today would be $1.1 million.

Keene is tormented by the failure to protect the $250,000 cap from inflation. He told Hiltzik that he proposed an inflation-indexed cap in an amendment to his original bill, and expected that it would pass routinely. Trial lawyers were actively opposed to the whole idea of MICRA, and they thought the bill would be so repugnant without the inflation index that it was a slam-dunk to be rejected. So they lobbied hard against it.

But even they underestimated the Legislature’s worst instincts: To their horror, MICRA passed without the inflation provision.

Hiltzik drew a stark picture of what has happened since. Because juries tend to assess proportionately more pain and suffering judgments to women than men, they typically get 33% less of what they used to. Verdicts for men, who generally have higher earning losses, have dropped by 25%.

And what about babies harmed by poor doctoring? Hiltzik refers to a Rand study that showed damages to injured plaintiffs younger than 1 year were slashed in 71% of cases.

Hiltzik writes that the real beneficiaries of MICRA are insurers. “Doctors would like to think that the insurers pass MICRA savings on to them,” he says, “but they’re dreaming. Last year, [California] Insurance Commissioner Dave Jones ordered rollbacks of $52 million in ‘excessive’ malpractice premiums.”

As you might imagine, the medical and insurance industries love MICRA. They claim it prevents frivolous lawsuits, but as Hiltzik reminds, a 2006 study published in the New England Journal of Medicine showed that “the most frequent injustice in malpractice cases involved not undeserving patients collecting payments, but the opposite, deserving patients getting nothing.”

“Malpractice litigation has indeed failed to serve patients and their doctors,” he writes. “The cost of a lawsuit, which includes extensive expert witness fees, has become exorbitant for both sides, and the typical case takes five years to resolve.”

“… Simply padlocking the courthouse to whole categories of plaintiffs doesn’t meet the fairness test. … It’s time to bring this 37-year-old law into the 21st century, and fix the malpractice system so that it actually works.”

Insurance and medical interests remain aggressively inaccurate in their defense of MICRA, but there are enlightened advocates motivated to correct its consumer ills: The consumer advocacy organization Consumer Watchdog is drafting a ballot initiative it hopes to place before the voters in November 2014 to raise the malpractice award cap to at least $500,000, and to index it to inflation.

Nobody familiar with the tonnage of campaign funding the rich insurance industry spends to misinform voters about proposals it doesn’t like is optimistic that this initiative will be successful. Neither is Hiltzik.

But it’s a start.