Attorney, Heal Thyself

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California plunged into a medical malpractice crisis nearly 40 years ago. It started because suing physicians became the “in” thing, as people said back then. If a doctor failed to order some test or otherwise made an error, you could almost see the patient and his activist lawyer high-five each other and yell, “Jackpot!” Plaintiffs won huge awards.

Although I wasn’t in California at the time, I do recall the mood of the moment. The logic went something like this: It’s OK to sue a doctor for some mistake, real or trumped up. The doctor’s insurance company is the one that has to pay, so the physician doesn’t really get hurt anyway.

Juries bought into that notion and granted runaway awards. It was as if a new kind of California gold rush was on – but with insurance companies giving up the riches.

The number of medical malpractice claims tripled in a 10-year period leading up to 1975. At the same time, the dollar amounts awarded in judgments or settlements leapfrogged 1,000 percent, according to a physician-owned medical malpractice insurer named the Doctors Co.

But, of course, this wasn’t like the original gold rush. This gold didn’t come out of the dirt; it came out of insurers’ portfolios. Someone had to pay for that.

So, predictably, insurance companies started jacking up rates to doctors in California. By early 1975, medical malpractice premiums spiraled up so crazily that some doctors staged a walkout or refused to work except in life-or-death situations. That spring brought devastating news: One insurer announced it was canceling 2,000 doctors’ policies in Southern California; the medical malpractice market had gotten unsound and unsustainable. Another announced it was raising premiums again – up to 400 percent – on May 1 of that year.

An emergency-room-worthy crisis was on. Doctors had these choices: Quit practicing. Move to another state. Take a chance and practice without insurance. Or pay the premium and make your patients pay much more.

On May 13, 1975, more than 800 physicians, nurses and hospital workers rallied in the Capitol, calling on Gov. Jerry Brown to call a special session of the Legislature to deal with the crisis. Brown did so, and that September the Legislature passed what’s commonly called Micra – the Medical Injury Compensation Reform Act.

Under Micra, plaintiffs suffering from bad doctoring can still get unlimited awards – as in, millions of dollars – to cover their lost wages, medical expenses and long-term care. However, noneconomic damages – that is, pain and suffering – are capped at $250,000. That’s important because that’s where medical malpractice awards got crazy and where lawyers made a lot of their money.

But, alas, as you may have read in last week’s Business Journal, lawyers now are striving to put a measure on the ballot next year that would revise or even kill Micra. Activist lawyers claim it’s hard for them to make money with Micra as it stands; some of these poor guys are trying to scrape by earning less than $1 million a year.

Does Micra need to be revised? I’m no expert, but it stands to reason that any law could be studied and possibly updated after 38 years. But any tinkering should be at the edges. It would be insane to kill or gut Micra.

Before Micra, California was in crisis and had the highest medical malpractice rates in the known universe. After Micra, the rates have been among the lowest, which helps keep the overall cost of medical care down. Micra stands as a true rarity: It’s a California law that other states actually use as a model.

Let’s not go back in time, relive an old crisis and make Jerry Brown call another special session.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].