In January of 2009, 17 year old Olivia Cull walked up the steps of Mattel Children's Hospital UCLA in Westwood for a routine heart catheterization, the last in a long line of procedures designed to correct a minor birth defect. Olivia, a top student already admitted to Smith College, never left the hospital. An intern, unlicensed to practice medicine at UCLA, removed Olivia’s heart catheter without supervision and Olivia slipped into a coma. A few days later while parents Robert and Joyce Cull struggled with the decision to terminate life support, Olivia’s 11 year old sister crawled into the hospital bed with her; a nurse sobbed in the corner.
The thread that ties these tragic stories together does not end with the malpractice that caused their deaths, but extends to the gross undervaluation of their lives under current California law. The girls were each subject to the inequities created by a California which was passed in 1975 in an attempt at insurance reform. The law, known as the Medical Injury Compensation Reform Act (MICRA – Cal. Civ. Code 3333.2), limits non-economic damages in medical malpractice suits to $250,000 – the legally imposed value of a child’s life in cases of doctor negligence.
Manufactured insurance scareEnacted in the face of a now discredited insurance industry panic about the rapidly rising costs of malpractice insurance, MICRA was proposed as a an ineffective solution to a problem that did not exist. In the 12 years that followed the passage of the law, insurance rates for malpractice skyrocketed an astounding 190%, stopped only by the much more sensible passage of proposition 103 in 1988 which brought malpractice rates under the regulation of the California Department of Insurance. Despite the scandal surrounding MICRA it has continued unchanged for almost 40 years, never once adjusted for inflation; a flaw which has reduced the economic impact of the $250,000 cap by about 75% over the last three decades.
An abject failureWhile targeted at ballooning malpractice insurance premiums, MICRA has done nothing to help the doctors who often fight for it, but has instead served to line the pockets of California’s malpractice insurance providers. Under California law, insurance companies are required to maintain a reserve fund for use in paying future claims. Medical malpractice carriers in the State, however, have used increasing profits to build up enormous reserves despite the fact that they routinely over-estimate future claims. Each of the three largest carriers in the state have, at least once over the course of the last ten years, carried a reserve account as much as 10 times larger than the required amount. In fact, despite their claims about the growing costs of medical malpractice suits, California carriers pay out an average of only 25% of their gross receipts to such claims, holding the rest for lawyer’s fees, administrative costs, and profits.
National effortsDespite the complete failure of MICRA to reduce insurance rates in California, and the tragic consequences disproportionately dealt to the poor, unemployed, elderly, and children, proponents of such caps have taken the fight nationwide. After MICRA, 23 states enacted some sort of pain and suffering damages cap and bills have recently circled in Washington that would impose a similar Federal cap, ostensibly as part of the national effort to reduce healthcare costs. Ironically, many of the proponents of such a cap themselves earn more per year then they allow for a lifetime of patient pain and suffering.
Doctors’ groups such as the AMA and the American College of Obstetrics and Gynecologists have been vocal supporters of caps on a patients legal rights while simultaneously opposing similar caps on their own ability to sue health insurance companies for unfair practices; a conflict only recently recognized by the AMA when it chose to drop efforts to advocate against caps on insurance company lawsuits, instead focusing exclusively on limiting patient lawsuits nationally.
Bottom lineOlivia’s and Mia’s heartbreaking stories are not isolated incidents. Medical malpractice is a growing problem which kills as many as 390,000 people annually, making it the most deadly national health concern after heart disease and cancer. Yet many victims are unable to even find a lawyer capable of shouldering the substantial costs associated with the complex legal proceedings surrounding medical malpractice cases; costs which can routinely run over $100,000 not counting legal fees.
It is time to revisit MICRA in California to ensure that patients, not insurance companies’ profits, are protected under the law.