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Are Patients Short-Changed by California’s MICRA Cap?

Consumer advocate Ralph Nader implores Governor Brown to lift the cap on damages awarded in cases of medical malpractice.

--by Heather Kathryn Ross

Activist Ralph Nader is a peace-loving man, but today he spat fire. Addressing members of the press at the Center for Food Safety in San Francisco, Nader urged Governor Jerry Brown to raise or abolish the cap on monetary damages awarded to patients in cases of medical malpractice or negligence. According to the Harvard Medical Practice Study conducted in 1984, more than 90,000 Americans perish every year due to medical negligence, and many more suffer debilitating injuries.

“We have an epidemic of preventable violence in this country in the form of medical malpractice,” Nader said. “[Policy makers] don’t hear the cries of anguish, the sounds of death, injury, prolonged disease…so who speaks for these people?”

An Overview of MICRA

In 1975, the California Legislature passed the Medical Injury Compensation Reform Act (MICRA), which caps the amount juries can award for “non-economic” damages in medical malpractice suits. “Non-economic” injuries, sometimes called simply “pain and suffering,” include blindness, trauma, mutilation, emotional distress, infertility, and the loss of a loved one due to medical negligence.

These injuries are more difficult to quantify in dollar amounts than “economic” injuries, such as the loss of future wages. MICRA put in place an across-the-board cap on “non-economic” damages of $250,000, which has not been adjusted for inflation since the mid 1970s. Nader and other consumer advocates say that the law discriminates against children, the elderly, stay-at-home parents, and others who may not be able to claim “economic” injury.

Nader told the story of a 7-year-old boy named Steven Olsen who fell out of a tree, causing a stick to become lodged in his nose. His mother took him to a hospital, but doctors opted not to perform a CAT scan of his brain to check for injury. As a result, the boy lost his eyesight and is severely mentally handicapped. A jury awarded the Olsen family $7.1 million in “non-economic” damages, but under MICRA the amount was reduced to $250,000, plus the cost of his medical care.

Nader calls this a travesty, but can California as a state afford $7 million dollar payouts to plaintiffs and lawyers in malpractice cases? According to Californians Allied for Patient Protection (CAPP), a MICRA advocacy group, the law was passed in an attempt to rein in sky-high medical liability insurance costs—driven by suits like these—that were putting doctors and clinics out of business.

“In the ‘70s you were seeing a crisis where doctors were leaving the state and some couldn’t get insurance at all because premiums were doubling or tripling,” said Lisa Maas, Executive Director of CAPP. “I think that MICRA strikes a great balance between making sure costs are kept down, but also making sure everyone has access to care.”

The Affect of MICRA on Doctors and Litigators

Nader counters the assertion that MICRA has helped doctors, patients, and taxpayers financially. Ten years after MICRA was enacted, the U.S. General Accounting Office surveyed six states, including California, who had instituted similar caps and found that claims and insurance costs in these states continued to rise dramatically. Meanwhile, Nader says, insurance companies profited from the reduced liability.

Nader says that one way to weed out bad doctors and force them to take the brunt of rising premium costs is to have malpractice insurers “experience rate” doctors, just like auto insurers do. Doctors who receive malpractice suits would see their premiums rise dramatically. Barring this change in insurance company practices, Nader says the best way to keep doctors and hospitals accountable is litigation.

However, the MICRA cap makes litigating malpractice cases more difficult. Because MICRA limits the potential compensation for lawyers in malpractice suits, good litigators are reluctant to take these cases. People who don’t have a lawyer and so cannot file suit often end up on the public dole via disability programs like Medicaid.

“It’s an uphill fight, it’s an expensive fight, this kind of litigation, and when you have to represent people who have no lost earnings and they’re going to have to survive on ‘pain and suffering’ and it’s capped at $250,000, most lawyers aren’t going to take the case,” Nader said.

CAPP sees less litigation as a good thing. California is a notoriously litigious state, and they say that if the MICRA cap were lifted lawyers would have a greater incentive to file suits—even frivolous ones—which would ultimately drive up healthcare costs.

“MICRA protects patients by making sure they are fairly compensated, by covering all their medical costs, present and future, along with unlimited punitive damages,” Maas said. “One of the parts of MICRA is a limit on the fees that attorneys can collect, so more money that comes out of the suit goes to the patient, not the lawyers.

The Uncertain Future of MICRA

After personal talks with Governor Brown, Nader is confident that he will take action to adjust the MICRA cap to reflect inflation and higher cost-of-living. This would bring the potential maximum for “non-economic” damages to around $1 million per plaintiff. All the governor needs, Nader says, is a push from groups like Trial Lawyers Inc. and the California Nurses Association—and of course the public.

“Everything is in place for repealing MICRA or indexing it, except the will,” Nader said. “There’s a kind of stasis, a kind of malaise operating where everybody’s waiting for somebody else.”

If Nader and the lawyers and nurses associations do convince the governor to raise or repeal the MICRA cap, Maas worries that it could limit available care for needy Californians.

“We need to make sure that we keep MICRA to make sure that these practitioners in California stay, and we’ll need more going forward with federal healthcare reform coming,” Maas said. “Keeping the protections of MICRA will help make sure doctors can practice and clinics can stay open.”

Nader, of course, sees the bottom line differently: “Getting justice should be a great priority in our country,” Nader said. “If someone wrongfully, negligently, incompetently takes out the wrong organ from your body or renders you a paraplegic, the system should provide an open door into the courtroom for you to adjudicate it.”

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Tags: Famous Faces , Public Health & Policy

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