Can tort reform help save health care?

Everybody has heard the McDonald's coffee story.

Held up as an icon of excess in a case of legal fault, the anecdote centers on the 73-year-old patron of the fast-food chain who spilled hot coffee onto her lap and later was deemed deserving of a $2.86 million jury award, nearly every one of those dollars in punitive damages. A jury later reduced the sum to $640,000, but the case still rankles Ed Channell.

Although Illinois is one of a handful of states that have set a cap on malpractice awards, the Naperville resident is among those who see a limit on settlements for medical wrongdoing as a key element in the overhaul of the nation's health care system.

"I think that should be the first step of any reform. Tort law should be changed," said Channell, 70, who views fear of legal consequence as a driving factor in a medical bill's sticker-shocking bottom line. "You don't need it, but (doctors) have to protect themselves from being sued."

The idea finds understandable support among those in the medical profession. According to Howard Peters, excess liability is responsible for $100 billion in health care costs every year because physicians and other health care workers feel they must go to great lengths to guard against "unfair lawsuits."

"We strongly believe that if you want to reform health care and you want to squeeze costs out of the health care system, you're going to have to do comprehensive liability reform," said Peters, senior vice president for government relations for the Naperville-based Illinois Hospital Association.

Recent research backs up the idea that substantial savings are to be found in cutting waste. A Thomson Reuters study released Oct. 27 reported that the U.S. health care system squanders more than $700 billion yearly, roughly one-third of the total outlay. Of that amount, roughly 37 percent is spent on unnecessary procedures, many of those falling under the umbrella of defensive medicine, the authors found.

The Medical Rights and Reform Bill -- sponsored by U.S. Rep. Mark Kirk, R-Northbrook, and co-sponsored by Rep. Judy Biggert, R-Hinsdale, along with 18 other House Republicans -- includes a suggestion to "encourage states to adopt 'alternative to litigation' reforms such as early disclosure and compensation, administrative determination of compensation, and specialized health care courts." The proposal, also known as HR2516, also calls on doctors to consider practice guidelines supported by clinical evidence as a way of reducing defensive medical practices, and includes "stabilized compensation" for those who are injured in the course of receiving treatment.

Some people assert, however, that eyebrow-raising awards are justifiable in some cases. They say cutting back substantially on victim awards would do little to bring down the cost of health care.

Kathleen Zellner, who practiced in Naperville for 17 years before relocating her office to Oak Brook two years ago, represents patients in medical malpractice actions. She said reducing these awards would do nothing to bring down costs.

Citing a Harvard University study that found 200,000 Americans die unnecessarily each year because of medical errors and infections contracted in hospital settings, Zellner is not about to absolve the medical community of big-ticket responsibility for bad outcomes.

She argued successfully for a $13.3 million settlement for the estate of a woman who committed suicide after she was sent home from the hospital even though she was severely depressed. Even after the award was split in half to account for the deceased's role in the tragedy, the case holds the U.S. record as the largest malpractice award involving a suicide, Zellner said.

She also refers to a comment from University of Pennsylvania professor Tom Baker, who was quoted in the New York Times saying that at $30.4 billion for 2007, malpractice awards account for less than 2 percent of the $2 trillion spent on health care annually. Other estimates place it at less than one-third that much.

"I don't think there's disagreement that it represents a fraction of all health care costs," she said.

Zellner, who defended hospitals before taking up medical injury work, said 5 percent of all physicians are involved in 95 percent of all suits. Doctors do a poor job of monitoring each other, she said, and putting a monetary limit on their exposure won't fix that.

More importantly, Zellner said, tort reform cuts into health care's system of checks and balances.

"The biggest problem is it erodes the function of the judiciary, because then you're taking the decision out of the hands of the jury and you're putting it in the legislature," she said.

Zellner hopes a jury will find in favor of one of her current clients, an Oak Park woman who was left badly injured in 2004, she said, after hospital workers set her in a chair with no cervical collar just after she underwent a successful surgical procedure on her neck.

Delores Murray said she was medicated by morphine and fell to the floor in her room at the University of Illinois Chicago Hospital, lying there until the next shift's nursing staff found her and helped her back into her chair.

"They said, 'You're OK now,' and I said, 'Why can't I use my arms and hands?' " said Murray, 55.

She continues to undergo physical therapy and receives counseling for depression, but she can no longer drive and had to take early retirement after working for many years as a service manager for AT&T.

"What was to be a simple procedure ended up changing my whole life," Murray said.

A spokeswoman at the hospital declined to comment on the case, but Murray said Zellner has told her that the suit's pursuit of $12.5 million -- filed before the state set a limit of $500,000 per physician and $1 million per hospital for pain and suffering, which has since been challenged in court -- would enable her to resume a semblance of normal life, living in a retrofitted house and driving a specially equipped car.

Her attorney said the circumstances warrant the sum.

"When you're talking about causing blindness, paralysis, excessive pain, I don't think the awards are inconsistent," Zellner said.

Lawyers' opposition to the issue notwithstanding, Lisle resident Denise Cattoni would like to see tort reform have a real place at the table in Washington.

"Why aren't people talking about that? Are they all attorneys?" she said.

Cattoni, coordinator of the anti-tax Illinois Tea Party Patriots, asserts that health care reform is being rushed for political purposes. She's also frustrated that it's so difficult to find information about the proposals on the table.

Business owners also see substantial value in what the U.S. Chamber of Commerce calls civil justice reform. The perspective is reflected on the local level as well.

"We support relief for health care for business owners, and civil justice reform must and needs to be part of that reform," said John Schmitt, president and CEO of the Naperville Area Chamber of Commerce, adding that limitations have to be consistent among different states to keep the playing field level.

Setting award limits would help control costs, "which are runaway, as we all know," Schmitt said.

Although Schmitt and others say that when malpractice premiums come down, the savings are passed along to patients, Zellner disputes the assertion. Premium rates are driven by insurance companies' earnings in the bond markets, she said. When the underwriters make profits, premiums go down.

"They've tried to tie it to medical malpractice, as if medical malpractice was the cause of health care costs," she said.

Scott McKibbin doesn't dismiss a connection between the suits and the costs, however. The Naperville health care consultant helped set public policy during the state's tort reform effort in 2005.

Defensive medicine drives up costs substantially, McKibbin said, and the expense is compounded when screenings and other costly procedures are repeated by different providers. Placing test results on discs that can be shared among medical facilities readily eliminates those added outlays and reduces patients' inconvenience and discomfort, he said, although it's not routinely done.

Also complicating the task of bringing down costs are cases in which doctors follow established medical protocols but something beyond their control goes wrong -- and the case ends up in court.

"Sure, somebody needs to have a forum to address some of these true medical errors or mistakes, but if you're talking about an outcome that the doctor really didn't have anything to do with ... this is clearly one of the reasons why the United States has one of the most expensive health care systems in the world," McKibbin said.

Channell, who believes unions and other professional organizations wield too much clout, stands firm on his assertion that the legal profession's power in the operating room must be brought under control.