The decision last year of a Baltimore jury to award $229.6 million in connection with a baby who suffered brain injury during birth at Johns Hopkins Bayview continues to have serious ramifications for Maryland’s health care providers. The extraordinary award, about five times what the plaintiff’s attorney had originally sought, was subsequently reduced, but it still exceeds $200 million. Now, hospitals including Johns Hopkins are struggling to cover malpractice insurance costs that have risen dramatically as a result. Even the self-insured fear they will have to reduce or eliminate obstetric services, seek major rate increases and/or reduce costs overall (which could translate to laying off hundreds) to cover reinsurance payments.
It’s a genuine health care emergency — and a particularly daunting one considering how malpractice issues have sutured the Maryland General Assembly in knots before.
There’s legislation on the table that could address part of the problem without necessarily opening a political Pandora’s box of doctors versus lawyers, health care versus the rights of those who have suffered injury. Instead of awarding a lump sum for a victim’s future medical costs (which is just one component, albeit a costly one, in any malpractice award), victims would receive a guarantee of lifetime care under a proposed Maryland Infant Lifetime Care Trust. Hospitals that deliver babies would pay in, and the trust would then cover victims’ medical bills. No more speculation about decades of future costs or risks of inadequate coverage. Hospitals say this approach, already employed by the New York Medical Indemnity Fund would keep insurance costs down sufficiently to keep them in the birthing business.
There is a downside, of course. Medical malpractice would remain something of a lottery for victims: Some will be given generous awards, others will get a relative pittance. And Senate Bill 879 asks for no sacrifice from medical malpractice lawyers, who would continue to reap amazing paydays with their 40% take, which would still be based on theoretical lump sum payments.
In the parlance of Annapolis, there is no tort reform to be found here. Why? Proponents offer one reason: Because the political landscape of the General Assembly forbids it. Trial attorneys have too much clout in the State House. Yet, as disappointing as that reality may be, hospitals need relief now, not down the road when the crisis has gotten so horrible that even lawmakers sympathetic to the legal community would be willing to take action.
Not surprisingly, some trial attorneys have already raised objections. They question whether the trust would be adequately funded, whether victims would end up with lesser health care, whether the trust amounts to a form of cost-shifting with ratepayers holding the bag. None of those objections appears especially well-grounded. New York’s nine-year-old system has proven effective with appeals of claim denials proving relatively rare. Indeed, the pending legislation presumes that a victim’s doctor is the gatekeeper of care, not the trust. As for cost-shifting, that seems something of a red herring. Higher medical costs, including higher insurance costs, are already covered by insurance ratepayers, so everyone pays whether this reform is accepted or not. It’s up to Maryland’s Health Services Cost Review Commission to set rates based on costs, and the agency’s track record is good.
The proposal is not perfect. We’d much rather see broader legal reforms that both reduce incidence of malpractice and remove the lottery-like paydays. But there is merit to simply restoring some rationality to the system of compensating those who suffer qualifying brain injury at birth, estimated to be about seven infants per year in Maryland. It would reduce cost without sacrificing care. Even trial lawyers must recognize that this represents a very good deal for them. This is malpractice reform that everyone should be able to live with.