I-330, I-336: What would they do?

What would happen if the doctor-sponsored medical-malpractice initiative, I-330, were to pass? Or its competition, lawyer-sponsored Initiative 336?

What if both were to pass?

I-330 supporters say its $350,000 cap on pain-and-suffering damages in nearly all malpractice cases would keep doctors in practice, increasing access for patients. And its limits on plaintiff lawyer fees, its ads say, would put more money into injured patients' pockets.

I-336 fans, on the other hand, say it would stabilize the insurance market with numerous changes and improve patient safety by removing repeatedly negligent doctors and disclosing more information about malpractice incidents.

If either or both were to pass, the first effect would probably be one or more legal challenges, with caps and disclosure of currently protected "adverse incident" information as prime targets.

Here's a summary of the initiatives' possible effects, based on studies and the experiences in other states.

More doctors, better access?

Proponents say I-330's caps would increase health-care access in Washington, although there is no evidence the state has a doctor shortage, even among specialists.

Still, insurer statistics show a significant number of family practitioners in the state have stopped delivering babies because of the higher malpractice-insurance premiums associated with that procedure. A smaller percentage of obstetrician-gynecologists don't deliver babies anymore, and others bought increased coverage in light of large awards for birth injuries.

And the Washington State Medical Association says its surveys show more doctors are "thinking about" leaving the state or even the profession.

A study last year by Emory University researcher Kenneth Thorpe concluded that capping noneconomic payouts brings more insurers into the market, where the resulting competition eventually lowers rates for doctors and hospitals. In the short run, however, insurers warn that rates may spike from a rush to file suits before caps take effect.

There is some evidence that damage caps might attract more doctors to Washington. Although studies conflict, economists at the federal Agency for Healthcare Research and Quality concluded that the number of doctors per capita, on average, rose slightly in states with caps. Rural counties had slightly larger increases, particularly of ob-gyns and surgeons.

But patient access is more complicated than just having doctors around. It's also influenced by the cost of health insurance and whether doctors are willing to see patients with Medicaid or no insurance.

Texas, which set caps in 2003, ranks 33rd nationally in per capita access to primary care, according to February's Texas Monthly magazine.

I-336 also aims to help keep doctors in business by enacting insurance changes and creating a supplementary state-run insurance program. Insurance Commissioner Mike Kreidler, who opposes both I-330 and I-336, says I-336's mandate to hold more insurance rate-increase hearings wouldn't reduce rates.

The state-run insurance program, which would have no subsidy, would let doctors and hospitals reduce the insurance they buy from commercial companies. But they would pay premiums to the state for the extra coverage.

"It doesn't help doctors in the slightest," says Dr. Richard Anderson, CEO of The Doctors Company, the state's second-largest insurer of doctors. "At the end of the day, it's funded by doctors."

Fairness

Supporters of I-330 say the malpractice-litigation system is unfair to doctors.

They cite a 1996 Harvard study, which concluded that juries based awards on the severity of a patient's injury, not on whether the doctor involved was truly negligent. Damage caps could help rein in those unfair, out-sized awards, doctors say.

For patients, too, the Harvard study concluded, the existing system is unfair; most patients who are injured never discover the negligence when it occurs, never sue, and usually lose when they do.

But I-330 critics say the initiative would make matters worse. With a cap on pain and suffering damages, patients who couldn't show economic losses — the elderly, children and people with lower or no wages, such as stay-at-home mothers — wouldn't be fairly compensated for their injuries, they say.

I-330 also would limit lawyer fees. Supporters say that would put more money into patients' pockets. Opponents say it would prevent some patients from finding lawyers to take their cases.

Now, attorney fees can take 40 to 45 percent of awards. I-330 sets a sliding scale from 40 percent to 15 percent of the award, depending on its size.

I-330 would allow most awards to be paid out over time and stopped if the patient dies. It also would invalidate a Washington law allowing "vulnerable adults" to collect a separate award for legal fees and expert-witness costs if they prevail.

David Beninger, one of the lawyers for Sandra Swanson, a nursing-home patient injured by negligent care, said his firm dedicated two full-time lawyers for three years to fight six defense-law firms. Swanson, who lost an arm, a leg and her teeth, prevailed.

Under I-330 fee limits, Beninger said, the firm would spend more on the case than it would get in fees.

Law firms may make millions on a single case, but they also spend millions investigating cases that never go anywhere, explained Paul Luvera, founding partner of Beninger's firm.

Patient safety

Doctors say I-330 would improve patient safety by making sure there are enough obstetricians to deliver babies and neurosurgeons to remove brain tumors.

I-336 tries another tack: It holds providers more accountable for substandard care, and gives patients more access to doctors' track records and disciplinary reports. Its three-strikes provision would remove licenses from most doctors with three malpractice judgments in 10 years.

Dylan Malone, I-336 spokesman, says he's sure that if the initiative's disclosure provisions had been in effect, his son Ian, who died last year from injuries suffered in a botched delivery, would still be alive. He and his wife would have learned of the doctor's troubled past, he says, and would have hired a different physician to deliver Ian.

Tom Curry, CEO of the Washington State Medical Association, says I-336's mandated disclosures would "kill" medical staff peer-review efforts by discouraging error-reporting used to improve safety practices.

Kreidler agrees: "I think peer review would be negatively impacted, which runs counter to [I-336's] purpose."

Would the three-strikes provision remove negligent doctors? Curry says it's extortion, forcing doctors to settle even meritless cases, and would discourage high-risk procedures.

Legal challenge expected

If caps were to pass, would they stick?

The state's Supreme Court shot down caps on jury awards in 1989, saying they violated the state constitution. Supporters of I-330 say their cap is narrower and the court is different — factors they hope would make it fly this time around. At the least, they say, I-330 would light a fire under legislators to pass caps, which could be done by amending the state constitution.

Caps haven't fared well in a number of states. Most recently, Wisconsin's Supreme Court in July revoked a $350,000 cap on noneconomic damages passed by lawmakers in 1995, saying: "No rational basis exists for forcing the most severely injured patients to provide monetary relief to health-care providers and their insurers."

Furthermore, the court wrote, caps don't limit frivolous claims.

Kreidler, the insurance commissioner, says he has no doubt that if I-330 passes, the caps again will be found unconstitutional in Washington.

What if both were to pass?

Kreidler says the two initiatives don't conflict, so both could pass and ultimately go into effect. But first, both probably would end up in court.

In Florida, the Legislature in 2003 passed a $500,000 cap on most noneconomic damages. Last year, voters passed caps on attorney fees, too, along with two measures sponsored by lawyers: disclosure of adverse incidents and a "three-strikes" provision for negligent doctors.

The measures approved last year have been bitterly contested in the courts and in the Legislature, with conflicting rulings and still-pending appeals.

Kreidler says that I-330 and I-336, either separately or together, won't accomplish what doctors and lawyers say they want. "We'll have another medical-malpractice so-called crisis," he predicts, unless the Legislature addresses the complex issue in its entirety.

How 2 awards might have changed

Jennifer Rufer

A young woman who dreamed of having children, she was diagnosed with a rare and deadly cancer on the basis of repeated blood tests in 1998. She lost part of a lung and her uterus to surgery and endured months of chemotherapy, increasing her risk of cancer in later life and ending her chance for bearing children. Later, it was revealed the test results had been wrong — "false positives." The jury found that the company knew all along its test was unreliable.

What she got

The jury awarded her $16.2 million, split equally by the University of Washington Medical Center and Abbott Labs, which made the test. Of that, $452,000 was for medical care, lost wages and other economic damages. The rest included $15 million in noneconomic damages for Rufer and $750,000 for her husband, paid half-and-half by UW and Abbott. Law firm out-of-pocket costs of more than $631,000 and attorney fees were taken from the award. With fees at 40 percent of the award, the Rufers received about $9.3 million.

If I-330 had been in effect

Rufer would get her full $452,000 in economic damages, but her noneconomic award from the UW would be reduced to $350,000. The lab, likely not a health provider under I-330's definition, would have to pay its full half of noneconomic damages, $7.5 million. The same would apply to her husband's award. That adds to a total of about $9 million for the Rufers. Subtracting costs leaves about $8.4 million. Under I-330's fee limits, her lawyers would take $1.3 million. The Rufers would receive about $7.1 million.

Sandra Swanson

Swanson, now 62, became a nursing-home resident after a stroke. She depended on the staff for virtually all of her personal care. After four years at the nursing home, court documents say, neglect left her with limbs so severely contorted that an arm and a leg had to be amputated to save her life, with fingernails grown into the palm of her hand, and with teeth so rotted they had to be removed. She filed suit in King County in 2003.

What she got:

Previous nursing-home operators settled with Swanson for $2.9 million. The current operators denied the claim. All together, six law firms fought Swanson's lawsuit. An arbitrator, a retired trial judge, awarded Swanson $6 million in noneconomic damages plus $2 million in attorney fees, allowed under Washington's Abuse of Vulnerable Adults statute. Swanson still hasn't received the award, because the insurance company has denied payment.

If I-330 had been in effect:

I-330 would eliminate the attorney fees under the vulnerable-adults statute. If I-330 had been in place, she would have received a total of $350,000 in noneconomic damages from all nursing-home defendants. Legal costs of $200,000 paid out by her lawyers would be subtracted. Her attorney fees, which would be limited by I-330 to $49,000, would come out of the remainder. She would end up with $101,000. Her lawyers note that court files show one of the three defendants spent more than $400,000 to fight Swanson's claim; I-330 does not limit defense legal fees.

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com