California lawmakers divided over malpractice reform

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President Barack Obama greets congressmen following his address on health care reform September 9, 2009 at the U.S. Capitol in Washington, D.c.

In Wednesday night’s speech on health care, President Obama offered a concession to Republicans. He said he was willing to consider reforming malpractice laws.

California adopted a big reform more than 30 years ago. State lawmakers capped “pain and suffering” awards in medical malpractice cases.

Did it cut down the cost of medicine in California? And could it cut medical costs nationally? KPCC’s Washington Correspondent Kitty Felde says those are very good questions.

Kitty Felde: President Obama said he doesn’t believe malpractice reform is the silver bullet that will drive down the cost of health care. But he said he’s talked to enough doctors to know that unnecessary medical tests are often ordered to prevent a lawsuit.

Barack Obama: I know that the Bush administration considered authorizing demonstration projects in individual states to test these issues. It’s a good idea, and I am directing my secretary of health and human services to move forward on this initiative today.

Felde: Republican Congressman Jerry Lewis of Redlands says why stop at pilot projects?

Jerry Lewis: I’d urge the president’s people to rethink that simply because we do have some experiments around.

Felde: One of those experiments is state law in California. In 1975, lawmakers passed the Medical Injury Compensation Reform Act, or MICRA. It caps “pain and suffering” awards at a quarter of a million dollars. Patients can still recover unlimited amounts for medical and economic compensation – things like long-term care or lost wages. Congressman Lewis says the president should look at the California experience.

Lewis: You can measure its results. You could easily bring that out and put it across the country because that’s a very big test case. Now California’s one of the largest countries in the world at this point and it’s proven to have some impact.

Felde: After MICRA took effect, the cost of malpractice insurance did go down in California. A RAND study five years ago also found that with MICRA in place, malpractice defendants who lose their cases pay out about 30 percent less in California.

At least 35 states have adopted caps on pain and suffering awards. But there’s a lot of doubt about the effect those caps have on medical costs. The Texas Medical Board claims the caps brought more doctors to the state, although other researchers dispute that. And the nonpartisan Congressional Budget Office said last year that its research couldn’t show a link between malpractice caps and fewer unnecessary tests.

Consumer groups and trial lawyers oppose a national cap on pain and suffering. Most House Democrats do, too. Congresswoman Laura Richardson of Long Beach says she’s willing to talk about it, but only if the president keeps those caps in the experimental phase.

Laura Richardson: I think this proposal is going to take give-and-take on both sides. And he mentioned a pilot program. I think if it was more of a pilot program effort versus across-the-board nationwide policy, folks would be amenable to see the results.

Felde: Not all folks. Democrat Barbara Lee of Oakland, who heads the Congressional Black Caucus, doubts malpractice award caps will make it into a health care bill this year.

Barbara Lee: Democrats have been talking about all kinds of reforms in this health bill. So that remains to be seen. We have to see how this process moves forward. This is a process of negotiation.

Felde: That process of negotiation is likely to continue throughout the fall.