What is the Problem?

Tennessee has been declared a medical liability "Crisis State" by the American Medical Association, joining 20 other states where a deterioriating medical liability climate is jeopardizing access to healthcare. The formal announcement was made on February 14 at a joint AMA-TMA news conference in Nashville.

Specifically, increasing malpractice insurance premiums and climbing jury awards have already begun to force many of Tennessee's doctors to opt for early retirement, shutting down their practices or eliminating high-risk and lifesaving procedures. This, in turn, is impacting access to healthcare for all Tennesseans, especially in rural areas where doctors and other healthcare providers are already in short supply.

A TMA survey found 70 percent of Tennessee's doctors believe the state has a shortage of high-risk specialists. AMA data from 2004 shows that of Tennessee's 95 counties:

• 81 counties have no residing neurosurgeon in patient care.
• 49 counties have no residing orthopedic surgeon in patient care.
• 47 counties have no residing emergency physician in patient care.
• 42 counties have no residing obstetrician-gynecologist in patient care.

What are the problems in Tennessee caused by medical liability woes? Our opponents blame “bad doctors” or insurance companies “trying to make up for stock market losses” with exorbitant premiums. Neither excuse is valid.

Here is what we see:

Patients are losing their access to their own doctors and healthcare services

• More than 30 of Tennessee's 95 counties have inadequate access to obstetrical care; 15 counties have no obstetrical access. (Source: TN Department of Health, Health Access Plan 2004)
• Patient access to OB/G equivalents have decreased from 179 in 1997 to 103 in 2003.
• 72% of Tennessee doctors responding to a survey report their medical communities already have a shortage of high-risk specialists and great difficulty recruiting new physicians. (Source: TMA MLR Survey, November 2005)
• 47% of surveyed doctors said they have already stopped providing certain services because of medical litigation concerns. (Source: TMA MLR Survey, 2005)
• 50% of surveyed doctors said they are "very likely" to stop providing certain services that increase their probability of being sued, while 41% said they were "somewhat/very likely" to retire early if the state legislature does not enact real reform measures. (Source: TMA MLR Survey, 2005)
• In Memphis, the UT Medical Group is unable to recruit physicians, including a thoracic surgeon, pediatric ENT, and pediatric neurologist. A provider of subspecialty care for TennCare patients from Memphis to Dickson, UTMG reports it is underincreasing financial pressure with TennCare woes and libility premium increases.
• Access to medical products is also impacted by medical liability concerns. As noted in the Tennessee Law Review 1997, a vaccine development company is not pursuing an AIDS vaccine due to liability concerns.

Tennesseans are paying more for healthcare because of the “liability tax.”

• Annual healthcare expenditures for 2005 are expected to hit $1.9 trillion. (Source: U.S. Centers for Medicare & Medicaid Services, Office of Actuary)
• The annual cost of “defensive medicine” (extra tests and procedures performed by doctors to protect them from lawsuits) is estimated at $70-$120 billion per year. (Source: U.S. Department of Health & Human Services, March 2003)
• Defensive medicine adds $2 billion to health care costs for Tennesseans. That's almost $1,000 per household.
• In Tennessee, 78% of doctors report ordering extra tests and procedures due to litigation fears; nearly half estimate 20% or more of their procedures fall into the “defensive medicine” category. (Source: TMA MLR Survey, 2005)
• 50% of the difference in cost of medication between U.S. and Canada is due to liability. (Source: Chris Ward, Canadian lecturer, retired legislator)
• Jury awards in all civil cases averaged $3.49 million in 1999, up 79% from 1993 awards. (Source: Jury Verdict Research of Horsham, PA)
• The median medical liability award in Tenessee jumped 43% in one year, from $700,000 in 1999 to $1 million in 2000; it has doubled since 1995.
• As of 2002, more than half of all jury awards in medical malpractice cases were over $1 million. (PIAA, December 9, 2002)

Frivolous lawsuits waste time and money

• In 2004, nearly 88% of closed medical liability claims in Tennessee resulted in no payment to the plaintiff. Those 1,534 suits resulted in defense costs totaling more than $16 million. In just one of the cases, defense costs amounted to more than a half-million dollars. (Source: SVMIC)
• Nationally, an average of 70% of all medical malpractice lawsuits are meritless and do not advance through the courts after study by experts. Average defense costs for each case are estimated at $25,000, even if they are dropped. (Source: Physician Insurers Association of America)
• Only about 7% of all medical liability claims ever come to trial; of those, more than 80% are won by the defendant. (Source: PIAA, December 9, 2002)

Lawyers are taking award money meant for injured patients

• In Tennessee, trial lawyer contingency fees and litigation costs consume more than 50% of award monies intended to make patients whole.
• In 2000, Tennessee trial lawyers advanced legislation to abolish the present limit of 33.3% contingency rates; the attempt was defeated.

Patient safety improvements are being hampered while Tennessee’s overall quality of medical care is declining

• “Fear of liability” is the main factor discouraging medical professionals from openly discussing and thinking of ways to reduce errors. (Harris Poll, 2002)
• The Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the most important healthcare regulatory body in the U.S., issued a position paper on Feb. 10, 2005 asserting that medical liability reform will improve patient safety.
• A Harvard-based study found the nation’s “runaway liability system” does not improve the quality of health care and, in fact, promoting defensive medicine may actually have a deleterious effect on the quality of healthcare and may worsen the quality of healthcare. (Source: “Designing a Reliable System of Medical Justice,” Common Good Institute, 2004)

Doctors and other providers are frequent and unwarranted targets of lawsuits

• 70% of all Tennessee physicians in practice for 10 years or more have been sued. (Source: SVMIC)
• High-risk specialists are even more vulnerable: 100% of Tennessee cardiac surgeons and neurosurgeons and 92% of Tennessee OB/GYN and orthopedic surgeons in practice 10 years or more have been sued. (Source: SVMIC)
• In 2004, more than 4,000 of the 10,500 physicians covered by State Volunteer Mutual Insurance Company (SVMIC) had pending medical malpractice claims filed against them; that is close to 40% of all its policyholders.
• An estimated 50-65% of doctors nationwide are sued at least once during their career. (Source: When Good Doctors Get Sued, 2001)
• The number of lawsuits in Tennessee alone is equivalent to total number of lawsuits in Canada.

Lawmakers are not listening to the opinions of their constituents

• 56% of Tennessee residents believe jury awards have grown too large and that some limits should be set
• Nearly 75% of all Tennesseans support limits on awards in malpractice cases if faced with losing access to services. (Source: TMA MLR Survey, 2004)
• 56% of Tennesseans are more concerned about the effect of medical liability issues than they were 2 years ago. (Source: TMA MLR Survey, 2004)