Governor's tort reform veto causes unrest

by Eric Olson

SBJ Reporter

eolson@sbj.net

Staring down medical malpractice insurance premiums that exceed $100,000 this year, Springfield physician Dave Redfern has been leaning toward quitting his obstetrics and gynecology practice.

Redfern began to lean a little farther when Missouri Gov. Bob Holden vetoed a tort reform bill April 27. It was the second straight session Holden put a stop to a bill aimed at restricting jury awards and reducing physicians' skyrocketing malpractice insurance rates.

"It's getting to be a no-win situation," Redfern said last week.

House Bill 1304 passed by votes of 93-61 in the House of Representatives and 21-13 in the Senate. Similar legislation passed last fall. But Holden said both bills failed to meaningfully address the medical community, and lacked insurance reform which he says is the most effective way to reduce physician insurance rates. Holden has asked legislators for a separate insurance reform bill.

"The bill sent to my desk ignores the need for insurance reform and uses the special needs of doctors as camouflage to give unwarranted protections to corporate interests at the expense of injured workers," Holden said in a statement announcing his veto.

Holden's veto received applause from the Missouri Association of Trial Attorneys. MATA echoes Holden's desire for insurance reform.

"We're trying to advocate the rights of every individual," said Steve Harrell of The Strong Law Firm's trial practice in Springfield. Harrell sits on MATA's board of governors.

Harrell said the bill would have limited his ability to fight for victims' rights by capping noneconomic damages at $400,000. The current cap is $565,000. Reducing caps lowers attorney compensation, which is a percentage of awards.

MATA suggests regulating malpractice insurance companies and holding them publicly accountable for excessive rate changes much like Holden's solution. A bill approved by the Senate May 4 does just that. HB 1305 authorizes the Missouri Department of Insurance to reject malpractice insurance increases of 15 percent or more, unless the increase is justified. The bill is up for hearing May 30 by the Senate Governmental Accountability and Fiscal Oversight Committee.

Missouri's Republican Party is questioning the political ties between MATA and Holden, a Democrat. According to the nonpartisan Center for Ethics and the Free Market, plaintiff-friendly attorneys have contributed more than $464,000 to Holden's re-election campaign.

"Gov. Holden has chosen to place one of his largest political and financial supporters the Missouri Association of Trial Attorneys ahead of health care and livelihoods of all Missourians," said Daniel Mehan, Missouri Chamber of Commerce and Industry president, in a press release the day of Holden's veto. "The governor is sending the message that Missouri needs to establish two separate standards of the law one for doctors and one for all other employees. That's unfair and unjust."

New MDI data for 2003 does not support claims of skyrocketing judgments something the medical industry has cited for its high premiums. Statistics released in April show malpractice insurance claims closed with payment decreased to 1998 levels (170 claims), while paid awards dropped to $53 million, about the same amount as 2001.

The data also shows Missouri insurance companies are enjoying cash flow windfalls. MDI Director Scott Lakin said malpractice insurers suffered a one-year crisis that ended in 2002.

Missouri's top three physician insurers Medical Assurance Co., Medical Protective Co. and Intermed all posted profits last year, totaling $60 million, compared to after-tax losses of $21.2 million in 2002, the department reported last month.

That doesn't sit well with Redfern, considering his Intermed Insurance rates jumped 82 percent this year. Redfern said he's been claim-free for 15 years.

"That's why we're screaming," Redfern said.

Specialists such as OB/GYNs and neurosurgeons have been the hardest hit. Jim Blaine, a primary care physician with practices in Bolivar and Springfield, is on the other end of the spectrum.

Blaine pays a $9,000 malpractice premium, one of the lowest rates possible. But he said high premiums are impacting his practice.

"They've driven some of our best specialists out of the state," Blaine said, therefore reducing the number of qualified physicians he can refer to patients. "That's what I worry about."

Harrell is sympathetic to the doctors' plight. "There is consensus the doctors need relief."