Ohio liability climate improved but still in crisis

Ohio may be showing signs of recovery two years after passing tort reform legislation, but the state is still in a liability crisis, according to the final report of the state's Medical Malpractice Commission.

The commission, governed by the Ohio Dept. of Insurance, recommended in its April report that tort reform measures remain intact and be given a chance to take effect. Among the law's provisions is a $350,000 cap on noneconomic damages.

While there has not been enough time to fully gauge the legislation's impact, other states with noneconomic damage caps have seen their liability insurance markets calm down, the report concluded.

"Based on testimony and data from states that do have tort reform in place, the commission fully expects tort reform to have a stabilizing impact on the medical malpractice market in Ohio over time," the commission wrote.

Since instituting a cap on noneconomic damages, Ohio has seen two firms enter the state's medical liability insurance market, and premiums have started to go up less dramatically.

Even though the law was passed in 2003, no challenge to the statute has made it to the state's Supreme Court to determine its constitutionality, said Wayne Wheeler, MD, an emergency and occupational medicine physician from Portsmouth, Ohio, and chair of the Ohio State Medical Assn.'s Task Force on Legislation.

"Insurance companies aren't ready to change their rates until we get a ruling that it's constitutional," said Dr. Wheeler, a member of the nine-person commission. "The situation has improved some, but that's not to say 10% to 20% [rate] increases will be acceptable."

The rate increases were not a result of liability insurers' investment losses but claims and the cost of defense, the report concluded.

"It's the cost of litigation, the settlements and the judgments that drive the increases," Dr. Wheeler said.

Ohio is one of 20 states the AMA has declared to be in crisis because of rising medical liability insurance premiums. The rising rates have forced some physicians to retire early, discontinue high-risk procedures or move to states that are not in crisis.

Dissenting voices

The report was approved by a 7-2 margin, with two trial lawyers on the commission dissenting. Steve Collier, a lawyer with Connelly, Jackson & Collier in Toledo, Ohio, wrote a minority report objecting to the commission's reliance on other states' experiences with tort reform and the absence of patient testimony in its research.

"The lack of focus on the patient is revealed by the chair's hiring of an outside group to conduct a survey of physicians (without any input from the remaining commission members) to gain insight into their views on the 'crisis,' " Collier wrote. "There has been no similar attempt, by survey or otherwise, seeking input from negligently injured patients."

While the lawyers disagreed with the report in its final form, they agree with several provisions, including the commission's recommendations to prevent medical errors.

The panel called for the state to create a patient safety center that would include a uniform medical error reporting system and protocols for disclosing errors to patients.

The commission envisioned a center that would "coordinate patient safety efforts at institutions across the state, work to identify best practices in patient safety, educate health care providers about best practices," and handle funding strategies and data collection, according to the report.

The group also recommended that the Dept. of Insurance require all liability insurance companies to justify their rates annually, even if no change is requested. Currently, companies are held accountable for increases, but they don't have to file a notice if they are not adjusting their rates.