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It's time to fix California's outdated medical malpractice law

The Medical Injury Compensation Reform Act of 1975 has destroyed the ability of large segments of California patients to file malpractice lawsuits.

July 09, 2013|Michael Hiltzik
  • Eric Andrist wanted to sue the Burbank hospital where his sister, Cali, died after treatment last year, but was turned down by more than 15 lawyers. They viewed the case as one with a recovery topped out at $250,000, and possibly less. He eventually found an attorney.
Eric Andrist wanted to sue the Burbank hospital where his sister, Cali,… (Gary Friedman, Los Angeles…)

It's a very rare thing for a legislator to admit that a law he sponsored hasn't worked out as expected. It's even rarer for him to label it "oppressive" and call for its revision.

But that's the case with former California Assemblyman Barry Keene and one of his legislative offspring. The law is the Medical Injury Compensation Reform Act of 1975, or MICRA, which tried to address a malpractice insurance "crisis" — rising premiums threatened to drive doctors out of California or into retirement — by imposing draconian restrictions on patient lawsuits.

Has MICRA worked? By some measures, yes.

The law has destroyed the ability of large segments of California patients to file malpractice lawsuits. It's not uncommon for those who sue their doctors and win to see their damage awards slashed by hundreds of thousands of dollars. So the goal of its original supporters, which was to make malpractice cases harder to bring and cheaper to defend, has been gloriously realized.

But as Keene acknowledges, MICRA is grossly outdated. The good news is that there's a move on to bring it into the 21st century, which Keene supports. The consumer group Consumer Watchdog is drafting a ballot initiative it hopes to place before the voters at the November 2014 election.

The group says it will hold off if the Legislature reforms MICRA this summer. Given the grip that the insurance industry and the medical lobby have on the Legislature, the chances of that are slim. So brace yourself for an initiative campaign likely to break spending records next year.

MICRA imposes a cap of $250,000 on all damages in malpractice cases except for the victim's medical bills and economic losses, typically lost earnings. Everything else, such as "pain and suffering," mental anguish and loss in quality of life, is subject to the cap.

That cap was set in 1975. Because it was not indexed to inflation, in 1975 dollars it's worth less than $58,000 today. To put it another way, if it had been inflation-indexed in 1975, the cap now would be $1.1 million. Raising the cap to at least to that level and permanently indexing it to inflation is the goal of the proposed initiative.

Keene, now 74 and long retired from the Legislature, is tormented by the failure to protect the $250,000 cap from inflation.

As he explained to me in an email, he proposed an inflation-indexed cap in an amendment to his original bill, assuming it would pass routinely. Instead the trial lawyers lobby, which adamantly opposed MICRA, came out against the inflation index in order to make the bill as noxious as possible to guarantee its rejection.

They misplayed their hand. To their shock, MICRA passed the Legislature without the inflation provision, got signed by then-Gov. Jerry Brown and then was upheld by the state Supreme Court.

There's no mystery about who really gets whacked by MICRA. A 2004 study by Rand Corp. found that juries tended to award proportionately more pain and suffering judgments to women than men, who typically can show higher earning losses. As a result, women's damage awards were typically cut more than a third to meet the MICRA limit, while men's awards were cut only 25%. Damage awards to injured plaintiffs less than 1 year old were slashed in 71% of the cases Rand studied.

Consider the case of Cali Andrist, 59, who died after treatment at Providence St. Joseph Hospital in Burbank last year. Cali had been developmentally disabled all her life, with a mental age of 4, according to Eric Andrist, her brother and long-term caregiver. Andrist alleges that she died in part because the hospital failed to diagnose that the abdominal pain that brought her to the emergency room came from a bowel obstruction.

Cali was the perfect MICRA victim: She had no earnings and obviously no future medical expenses. Determined to bring a lawsuit, Eric Andrist was turned down by more than 15 lawyers who viewed the case as one with a recovery topped out at $250,000, and possibly less.

"There's no way they could make enough money to take the case on," Andrist told me last week. "MICRA made Cali's life valueless."

Eventually Christopher B. Dolan, a San Francisco personal injury lawyer, agreed to take on the case practically pro bono. Andrist's lawsuit was filed in Los Angeles County Superior Court on May 30. The hospital declined to comment.

There's plenty of evidence that the only real beneficiaries of MICRA are insurers. Doctors would like to think that the insurers pass MICRA savings on to them, but they're dreaming. Last year, Insurance Commissioner Dave Jones ordered rollbacks of $52 million in "excessive" malpractice premiums.

Over the last 22 years, California malpractice insurers have paid out in claims an average of only 36 cents of every premium dollar they've collected, according to Insurance Department statistics. For comparison's sake, for all property and casualty insurance lines the figure is 62 cents; for passenger auto insurers alone it's more than 60 cents.

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