Oregon AFL-CIO COPE to weigh merits of Measure 35

In a battle between doctors and lawyers, do workers have a side?

That question will confront the Oregon AFL-CIO’s Committee on Political Education (COPE) when it meets Friday, Aug. 13, at the International Longshore and Warehouse Union Hall, 2435 NW Front Ave., Portland, to decide whether to take a position on Measure 35 and other initiatives that will appear on the Nov. 2 ballot in Oregon.

Measure 35 would put a limit of $500,000 on jury awards for non-economic damages for patients injured by the negligence or recklessness of health care providers. COPE is the labor movement’s political watchdog, making sure unions know which issues affect working people, which candidates are their friends, and how they vote after they get into office.

Both advocates and opponents of the jury cap ballot measure have presented compelling arguments to the COPE board, as they did at a July 20 meeting of the advisory board for the labor-supported Oregonians for Health Security, a coalition advocating affordable health care.

Oregonians for Health Security (OHS) heard first from Dr. Peter Bernardo from the pro-Measure 35 campaign — Oregonians for Quality Affordable and Reliable Health Care; and then from Kristi Schaefer of Trust Juries, the anti-Measure 35 campaign.

Bernardo, a Salem surgeon, is one of Measure 35’s chief petitioners.

The Oregon Legislature passed a law establishing a cap on medical malpractice jury awards in 1987, but opponents filed suit arguing that it violated the Oregon Constitution for the Legislature to pass a law limiting the court system’s ability to determine damages in civil cases. The Oregon Supreme Court agreed, and in 1999 the law was struck down.

If the courts were going to find “medmal” caps unconstitutional, cap backers decided, it was time to amend the Constitution. They went to the Oregon Legislature, and won a referral, Measure 88 — Oregon voters got to decide whether to amend the Constitution to allow the Legislature to set such caps in the future. They voted no — by a three-to-one margin.

So backers of medmal caps are back — this time with a measure that spells out the damage cap directly: $500,000. Is $500,000 (adjusted annually for inflation) a reasonable limit on the non-economic (“pain and suffering”) portion of medical malpractice awards?

Bernardo thinks so.

Boiled down, Bernardo’s argument goes like this: Jury awards, in medical malpractice cases, are rising fast: In Oregon, they’re up 65 percent over the last three years. That’s leading to fast increases in medical malpractice insurance premiums. Those premium costs are passed on, impacting insurance rates for everyone. Doctors are forced to practice “defensive medicine” by ordering unnecessary tests, which again drives up the cost of medical care. And medical malpractice insurance increases are leading doctors in high-risk specialties to change their practices: ob/gyns are leaving obstetrics and sticking to gynecology, because delivering babies has become risky, Bernardo said. An obstetrician can pay $65,000 a year for medical malpractice insurance, a neurosurgeon $60-80,000.

“We’re voting with our feet,” Bernardo told the OHS advisory board. “If you’re a new med school grad, you don’t want to practice in this state. It’s too risky.”

“It’s a very clear choice,” Bernardo said. You can continue to have the system as it is, or you can have doctors.”

Questioned by OHS advisory board members, Bernardo had mostly anecdotes to support his claim that doctors are leaving Oregon because it doesn’t cap jury awards.

“Is there any guarantee insurance companies will lower their premiums once jury awards are capped?” asked Michael Arken, head of the Oregon chapter of the AFL-CIO-affiliated Alliance of Retired Americans.

Premiums went down last time, Bernardo replied, while the Oregon cap was still in effect.

“Could rising malpractice premiums have something to with the losses insurance companies took in the stock market?” asked advisory board member Joe Mahoney from the group Oregon Action.

Bernardo said that’s unlikely, because his insurer, Northwest Physicians Mutual, has had 85 percent of its investments in the bond market.

“But what about reinsurance?” Mahoney asked. Mahoney, a retired former insurance company employee, made the point that local insurers like Northwest Physicians Mutual don’t handle all the risk themselves; they buy re-insurance, presumably from insurance companies that had investments in the stock market.

“This has nothing to do with the stock market crash,” Bernardo answered.

Data from the Congressional Budget Office may contradict that: Asked to look into the issue, the CBO found that about half the increase in malpractice premiums between 2000 and 2002 could be accounted for by investment losses.

Next up before the advisory board was Kristi Schaefer, head of the Brain Injury Association, a patients’ rights group. Schaefer is part of Trust Juries, the coalition against the measure.

Schaefer questioned whether Measure 35 will do what its backers claim — it will limit jury awards, but will that make insurance companies lower their premiums?

And even if it did, would justice be served by muzzling the jury system, removing the last constraint against “reckless doctors”?

“They’re trying to reduce premiums by limiting patient rights,” Schaefer said. “It’s like Goliath taking away David’s sling shot.”

“The truth is that powerful HMOs and insurance companies will always have access to the best lawyers money can buy. But this initiative would make it more difficult for working Oregonians to have their day in court and get access to case-by-case justice,” she said.

In effect, Schaefer argued, capping jury awards means that patients who are most severely harmed by physician negligence would bear the burden of reducing malpractice premiums.

Opponents of the measure also argue that even if a cap could lead to reduced malpractice premiums, it’s unlikely that would have any impact on medical insurance premiums: Medical malpractice awards amount to less than one-half of a percent of health care spending.

So why are doctors spending $4 million to pass a cap on jury awards when there are other solutions, Schaefer wanted to know — such as a mandatory pooled-risk plan, in which the risk of malpractice suits is spread among all specialties; or insurance reform, along the lines of California’s Proposition 103, in which insurance companies have to open their books and make a case to regulators before they’re allowed to raise rates.

Quite aside from the merits of the proposal itself, it seems there’s an element of partisan politics. Capping jury awards, in malpractice and other civil suits, has become a national cause for the White House. Political strategists like the president’s adviser Karl Rove have noted that trial lawyers, like unions and environmentalists, are reliable supporters of the Democratic Party. If an initiative capping jury awards forces lawyers to spend money, that’s less money they’ll have available to aid the Democratic Party.

Many of the battles are being fought out state by state. Currently 26 states have some kind of cap on jury awards in medical malpractice cases, including Washington. But the data is quite contradictory about whether those caps have any effect on malpractice premiums. Some states with caps have lower premiums, but some have higher premiums.

In Oregon, the pro side is expected to raise over $4 million. Hundreds of doctors are writing $1,000 checks, and hospitals and physician associations are chipping in hundreds of thousands. Opposition, mostly from lawyers and legal and patients’ rights groups, may raise a similar amount of money.

The anti-Measure 35 coalition so far has the backing of about two dozen groups, including the Oregon Federation of Nurses and Health Professionals (OFNHP); the Oregon State Fire Fighters Council; American Federation of State, County and Municipal Employees (AFSCME); and Local 49 and Local 503 of Service Employees International Union.

Meanwhile, PacWest, a lobby and public relations firm, is working for Oregonians for Quality Affordable and Reliable Health Care, the pro-Measure 35 group. [PacWest is also retained by some labor groups, including the Oregon Building and Construction Trades Council and Portland-based Electrical Workers Local 48.] One labor union, Laborers Local 121, has endorsed the measure, as have a handful of union signatory contractors associations (and anti-union associations as well.)

It will be up to the COPE Board to recommend whether the issue is one on which organized labor as a whole should take a side.

© Oregon Labor Press Publishing Co. Inc.