Those of us who lived in Nevada in 2002 remember when medical malpractice insurance premiums were so high that physicians were leaving Nevada in droves. Doctors refused to move here from other states, and high-risk specialists like obstetricians moved away or stopped delivering babies. The situation became so critical that the governor called an emergency legislative session.
Thanks to provisions enacted in 2002 and strengthened by an initiative passed in the 2004 general election, the situation has stabilized. However, a bill has been introduced in this session of the Legislature that would reverse all the progress made in previous years and bring us right back to where we were before the reforms.
Here’s a brief synopsis of what happened: In response to multi-million dollar jury awards in medical malpractice cases during the 1990s, insurance rates for physicians started spiraling out of control. The 2002 special legislative session limited non-economic damages such as “pain and suffering” to $350,000 per plaintiff. However, the cap did not apply in cases of “gross malpractice” or “exceptional circumstances.” The 2002 legislation did not have the desired effect of significantly lowering rates because insurance companies couldn’t predict when a case might qualify for one of these exceptions.
Ballot Question 3, approved by Nevada voters in 2004, reversed the two exceptions to the $350,000 cap, allowing insurance companies to better predict future payouts. Since then, medical malpractice insurance rates have fallen by 30 percent and malpractice claims have decreased by 40 percent. One research study estimates that Nevada’s $350,000 cap on non-economic damages will bring about long-term decreases in health care costs of at least $381 million annually.
Did the legislation passed in 2002 and 2004 mean less money for patients who suffer because of errors by medical professionals? No. Insurance companies still have to pay expenses such as the costs of further medical treatment. In most cases, what it means is that attorneys have less of an incentive to push for a jury trial in the hopes of getting a fat percentage of a multi-million dollar award.
Assembly Bill 495 was introduced this year in response to a Hepatitis C outbreak in Southern Nevada caused by substandard injection practices at two clinics. This situation naturally caused fear and outrage. It also gave law firms specializing in medical malpractice a chance to capitalize on these emotions, using them as leverage to reverse earlier reforms.
AB 495 would eliminate all caps and limitations on non-economic damages. It would also eliminate the limit on fees attorneys can charge and collect. It extends the statute of limitations for malpractice cases and reverses provisions shortening the time between filing of a suit and a trial date – delaying compensation for injured patients, but allowing attorneys more time to build up billable fees.
This bill would reduce access to quality medical care by decreasing the number of health care providers in Nevada, particularly in the state’s rural and low-income areas. Although the situation with doctors leaving Nevada has stabilized for the moment, we are still not where we need to be. Nevada ranks 48th in the ratio of physicians to population, and 50th in nurses-to-population. We cannot afford to lose any more medical professionals.
Reversing tort reforms would also reduce access to medical care by making health insurance more expensive. Employers responding to increased health insurance costs may reduce or eliminate coverage, increasing the number of Nevadans without health insurance. It should come as no surprise that taxpayers end up bearing the burden of medical costs for the uninsured.
AB 495 would make all the citizens of Nevada suffer for the errors of a few medical professionals, because costs will eventually get passed down to you and me. In the private sector, physicians facing higher insurance premiums will pass costs down to patients by increasing their rates. In the public sector, taxpayers will bear the burden.
At press time, the assembly had passed AB 495 and sent it to the Senate. It is up to voters to let their lawmakers know we do not want this bill passed. It may be our last chance to avoid yet another health care crisis.
Originally published in Nevada Business Magazine: