Ill. Hospitals, Physicians Applaud Unveiling of Comprehensive Medical Liability Reform Legislation

February 1, 2005

Illinois’ largest associations representing hospitals and doctors say meaningful and comprehensive legislation introduced this week – including caps on non-economic damages – is an important and critical step toward solving the state’s medical liability crisis. They are urging legislators to approve the proposal to preserve patient access to quality health care.

Leaders of the Illinois Hospital Association (IHA) and the Illinois State
Medical Society commended the sponsors of the legislation at joint news conferences in Chicago and Springfield, citing the urgent need for major reforms to fix the state’s broken medical liability system.

“The medical liability crisis is one of the most important issues facing
patients and hospitals all across Illinois,” said IHA President Kenneth
Robbins. “We appreciate the dedication and courage of this group of
legislators who are championing this proposal. They recognize that it is the responsibility of the General Assembly to address the crisis with meaningful reforms that will restore predictability to the medical liability system and eliminate excessive verdicts.”

Key provisions in the proposed legislation include:

— Reasonable caps on non-economic damages, such as pain and suffering;
— Structured awards that would more efficiently provide for future medical care of injured plaintiffs and reduce medical liability costs of hospitals (e.g., periodic payments such as annuities, rather than lump-sum payments);
— Apparent agency reform to protect hospitals’ liability for harms that they did not cause;
— Instructions to juries that medical liability awards are not taxable and that punitive damages may not be awarded in any form;
— More stringent expert witness standards; and,
— Protection of physicians’ personal assets.

The legislation would not make any changes affecting the full payment of economic damages to injured plaintiffs, such as hospital bills, lost wages and future health care needs.

“The excessive medical liability premiums and costs that hospitals must pay erode their ability to focus their resources on providing care, especially in critical areas such as emergency care and obstetrics,” said James Sanger, chair of IHA’s Board of Trustees, and president and CEO of St. Mary’s – Good Samaritan Inc. in Centralia. “We need caps to stop that erosion. Caps are working in 28 other states, where premiums are lower, compared to states that don’t have caps.”

The medical liability crisis is reportedly hitting hospitals hard – not just in the loss of physicians or in the difficulties they face in recruiting physicians.

The annual medical liability premiums paid by the average Illinois hospital reportedly increased from $1.5 million in 2001 to $2.8 million in 2003 – an increase of 84 percent in just two years.

Because premiums are so excessive, and because in many areas coverage is reportedly not obtainable, 70 percent of Illinois hospitals are self-insured or in risk pool trusts and must set aside tens of millions of dollars each year to fund their liability costs. Those funds could have reportedly been used by hospitals to better serve their patients and communities by hiring more nurses, providing care to
the indigent, obtaining new technology, or making facility improvements.

Twenty-eight states already have caps on non-economic damages, including Wisconsin and Indiana. Some physicians in Illinois are reportedly paying three to four times as much for their medical liability premiums as their counterparts in those neighboring states. One recent analysis reportedly found that premiums in states with caps are 17 percent lower than states without caps.

Illinois residents continue to support major reforms of the medical
liability system, including caps. Late last year, a statewide poll conducted by Northern Illinois University’s Center for Governmental Studies found that 67 percent favor caps on non-economic damages. Support for caps was at least 60 percent in every region of the state.

A poll conducted last year for IHA reportedly showed that an overwhelming majority of Illinoisans believes the state has a medical liability crisis that is jeopardizing patient access to care and that the Governor and lawmakers need to take action to solve the crisis.

The poll found that 84 percent of likely Illinois voters characterize the current state of Illinois’ medical liability system as a crisis or major problem, and more than three-quarters (77 percent) think the system needs major changes or a complete overhaul.

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