Allison Wall

Tort “Reform” in Georgia: Dispelling the Myth

By Allison Wall, Executive Director, Georgia Watch

"The right to trial by jury shall remain inviolate."

"No person shall be deprived of the right to prosecute or defend, either in person or by an attorney that person's own cause in any of the courts of this state."

- Constitution of Georgia, Bill of Rights, Section One, Paragraphs 11 & 12

In 2005, Georgia Gov. Sonny Perdue signed Senate Bill 3 into law, limiting the compensation that victims of medical errors or abuse could receive from a jury - even if the victim died. This severe law marks the end of a well-financed campaign driven by Atlanta’s major corporations, including Home Depot, Coca-Cola, Georgia Pacific, and the HMO's, insurance companies and giant hospitals.

Proponents of the bill promised that it would lower the cost of insurance for doctors and hospitals. At the time, medical malpractice insurance rates were skyrocketing. MAG Mutual, Georgia’s largest doctor insurer, increased doctors' premiums by 53.5 percent between 2002 and 2004, despite projecting a 33.1 percent decline in future payouts to victims.

During the 2005 legislative session, insurance companies herded doctors in white coats to the State Capitol, who insisted that "frivolous" lawsuits were driving up the cost of insurance, and driving them out of business. If Senate Bill 3 didn't pass, they claimed, hospitals and doctors would be forced to close shop or leave the state.

But those threats have proven unsubstantiated. And, what's worse, Senate Bill 3 has had little or no impact on insurance rates. In almost two years, MAG Mutual has not lowered rates one cent. The company now claims it doesn't have the money to lower premiums, even though records indicate it holds almost three times the surplus that the National Association of Insurance Commissioners (NAIC) deems adequate. Meanwhile, at least six other companies selling insurance to Georgia doctors have increased their rates by as much as 57.5 percent.

These premium increases have had a real affect on Georgia hospitals. In April, Elbert Memorial Hospital closed its obstetrics unit because of the escalating cost of malpractice insurance. It was the second rural area hospital to stop delivering babies in recent months. Wills Memorial Hospital in Wilkes County did the same last fall. And, according to health professionals, more rural hospitals are likely to follow suit.

While many doctors and hospitals continue to struggle, earnings for the property casualty insurance industry are at an all-time high of $44.8 billion - up from $3.05 billion in 2002. Last of all, the NAIC announced that these insurers held over $1.3 trillion in assets.

This tort "reform", it turns out, was a myth. Here's the reality.

Frivolous lawsuits were never a problem

In May, the New England Journal of Medicine (NEJM) published a study that cast serious doubt on the insurance industry's claims that frivolous lawsuits have driven up the cost of malpractice insurance.

Specifically, the Harvard researchers found that lawsuits involving real evidence of negligence, misconduct or malpractice out-numbered frivolous cases by two to one. In fact, 80 percent of the cases researched in the study involved injuries that caused significant or major disability, or death.

"Some critics have suggested that the malpractice system is inundated with groundless lawsuits, and that whether a plaintiff recovers money is like a random 'lottery,' virtually unrelated to whether the claim has merit,' said lead author David Studdert. "These findings cast doubt on that view by showing that most malpractice claims involve medical error and serious injury. and that claims with merit are far more likely to be paid than claims without merit."

Of the total of 1,452 files reviewed, only 37 lawsuits did not involve any injury at all, and only a handful of those claimants received any compensation from a jury or settlement.

The Harvard study is another chapter in a library of proof that frivolous lawsuits are not clogging the court system. Last fall, John Ashcroft's U.S. Justice Department announced that, from 1985 to 2003, the number of tort trials in America dropped by nearly 80 percent.

Tort reform has taken away our rights

Last year twenty-three year-old Augusta, Georgia resident Ashlyn Clark went to a local emergency room with abdominal, back, and leg pain. Emergency room nurses clearly documented all of Clark's complaints; however, the emergency room physician focused only on the back pain. He did not perform a pelvic or abdominal exam and did not take into account Clark’s low blood pressure and elevated pulse. She was sent home -

Three days later, Clark returned to the emergency room deathly ill. A CT scan indicated a ruptured appendix, but subsequent surgery confirmed that she suffered from a ruptured abscess of the right ovary and tube. She went into multisystem organ failure and died 12 days after the operation.

Clark's family tried to find legal representation to hold this doctor accountable, but was unsuccessful. They found out the hard way the impact that Senate Bill 3 is having on Georgia families and the court system.

Georgia's new law limits what a jury can compensate any victim for physical loss and disability to $350,000 - even if the negligence kills a loved one. This one-size-fits-all approach brutally affects retirees, veterans, stay-at-home parents and anyone else who does not work or works for modest pay. Because under this law, an insurance executive or corporate CEO with the exact same injury will still receive millions of dollars in "economic damages" for life for their six-figure salary.

Most seriously, the law discourages many attorneys from representing retirees, veterans, or families living on a modest income. After all, why take a case that you alone will have to finance for years if you know that the best possible payout is unlikely to cover even the cost of the case? This amounts to a violation of the state and federal constitution, which guarantees everyone a right to trial by a jury of fellow citizens.

What's more, Senate Bill 3 takes away the rights of patients injured or killed in any of Georgia's emergency rooms because of clear negligence. The ER immunity provision of the law requires patients to prove "gross negligence," which means proving that their medical provider willfully and knowingly mistreated them. This is virtually impossible to prove in an emergency setting, after the fact.

We need real reform

Georgia lawmakers have yet to question the insurance companies themselves. Even during the legislature's hearings on Senate Bill 3, neither MAG Mutual nor any other property casualty insurer was questioned about rate hikes, payouts, surpluses, recent windfall profits or their business practices.

Also, many Georgians do not realize that Insurance Commissioner John Oxendine accepts campaign contributions from the very companies that he is responsible for regulating. For example, executives at MAG Mutual gave $3,100 to his re-election campaign between January 2005 and June 2006. Campaign finance reform would remove any impression that our insurance commissioner is for sale.

In one example of change, California’s insurance commissioner is required to hold public hearings on rate increase requests exceeding 15 percent. This sunshine reform, called Proposition 103, has saved California doctors and hospitals over $60 million in the past three years - in addition to $75 million in refunds.

Senate Bill 3 locked many Georgia citizens out of the courthouse and left them with no recourse for their injuries. And it created a system where the insurance industry isn't held accountable, and necessary improvements to our state's health care go unrealized. It will take an open debate on insurance accountability and a fresh approach to solve these problems. Georgia doctors and patients deserve nothing less.

Allison Wall: Author Bio | Other Posts
Posted at 5:27 PM, Sep 20, 2006 in
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So much to cover:

"Specifically, the Harvard researchers found that lawsuits involving real evidence of negligence, misconduct or malpractice out-numbered frivolous cases by two to one."

2 to 1! Wow, we sure AREN'T being inundated with frivolous lawsuits... it's only every THIRD SUIT! The numbers need to be AT LEAST 10 to 1 before there's any reasonable claim that there's no problem.

"In fact, 80 percent of the cases researched in the study involved injuries that caused significant or major disability, or death."

Yes, but that tells us nothing of what CAUSED those injuries. Believ it or not, doctors aren't responsible for the death of a patient just because they couldn't SAVE that patient from multiple bullt wounds, massive heart attack, or any other major health issue that they the doctor didn't cause.

"Of the total of 1,452 files reviewed, only 37 lawsuits did not involve any injury at all, and only a handful of those claimants received any compensation from a jury or settlement."

Ys, but how much MONEY did that "handful" get? If only 2 of them rcovered, but they each got $20 million, that would describe perfectly a "lottery litigation" situation. Not saying that's the case, but your "data" does NOTHING to suggest otherwise.

"After all, why take a case that you alone will have to finance for years if you know that the best possible payout is unlikely to cover even the cost of the case?"

The EXTREMELY simply solution to this is to get rid of "contigency" fees! That's what causes this problem. Implement a "loser pays" rule, and this problem evaporates. Oh wait, that would be a "tort reform", and those are evil.

There's also a VERY simple solution to the problem of insuranc companies "over-charging" everyone. Start a new company. That is, if the current companies are making such high profits, surely a competitor (started by the noble trial lawyers themselves, to help the little people) could be quite profitable with half that profit level (or lss) enabling them to easily undercut all the other providers in the area.

You see, it's very simple. If it's really so very profitable, there is enormous pressure for 2 things to happen: 1) price wars between existing companies, and/or 2) new entries into the market to enjoy the high profits.

In short, what you are showing (that all the providers are raising their rates by similar amounts) suggests VERY strongly that that rate is what they need to stay in business. That they are putting their CUSTOMERS out of business (that is, they stop getting money from those customers) with their prices is even further evidence.

Just having high rates doesn't automatically make them evil. Just because future payouts are expected to fall doesn't mean that the current rate is enough to cover that lesser future rate, since the current rates apparently aren't covering the current expenses, either.

Now, don't get me wrong - insurance companies aren't saints. They do wrong stuff, too. But it's exceedingly difficult to believe that they are all conspiring together, when there would be ENORMOUS pressure to be the first to cuts rates (as they would attract huge amounts of business if they were the first). Among the other reasons I've listed.

"We need real reform"

Why, yes! Yes, we do! It's so nice to hear you say that!

Caps are, indeed, a poor reform, but they are better than the previous status quo. There are several better solutions, but lawyers vehemently oppose them.

Posted by: Deoxy | September 21, 2006 10:40 AM


On behalf of the people I know who are victims of medical malpractice, I take exception to the use of the word lottery and to medical malpractice lawsuits being characterized as getting something for nothing or as a free lunch. People who make such callous comments must take their lead from our compassionate conservative President who persists in calling those lawsuits "frivolous" or "junk."

In a speech to Congress, President Bush called medical malpractice lawsuits "junk" lawsuits. He, of course, has the right to say what he pleases from his bully pulpit, callous though it may be. I, too, have the right to say what I must in response, using my bully pulpit, in this case the Tort Deform blog, to do so.

Unfortunately, the president latches onto a few pet phrases and seems to think that if he says them often enough they will have validity, even going so far as to make use of them in his State of the Union address. Simply repeating "weapons of mass destruction" to the point of predictability did not make them appear. Making a mantra of "frivolous lawsuits" does not change the fact that the great majority of lawsuits were filed because the medical profession will not police its own ranks.

It is time for the president or perhaps someone on his staff to give some thought to the concept that life isn't one-dimensional, that language has power, thus mandating that words be chosen with care, that cause and effect is at work, resulting in valid lawsuits being filed when medical malpractice maims people's bodies, produces constant and debilitating pain, changing entirely the course of peoples' lives, and, far too often, causing death.

Finally, most medical malpractice lawsuits are not frivolous. Is a lifetime of pain frivolous? Is it frivolous to have one’s life curtailed and redirected and blunted because a doctor was irresponsible? Is it frivolous to lose a two-year-old child because not a single medical professional could manage to hydrate him? Is it frivolous to face life without the ability to speak with clarity of voice, to be unable to control your movements, to be unable to do those simple things most of us take for granted, but to have a clear mind that recognizes those pained responses to your condition?

I think not.

Jane Marshall

Posted by: Jane Marshall | October 2, 2006 12:35 PM