Thursday, November 20, 2014
IN MY OPINION (Column)
Medical Malpractice Crisis No Longer Exists—Neither Should MICRA
Business and Professions Code § 6146(b) Is Obsolete and/or Unconstitutional
By NATHANIEL J. FRIEDMAN
The Medical Injury Compensation Reform Act of 1975 (MICRA) was enacted in response to a (manufactured) “crisis” caused by the rapid increase in medical malpractice insurance premiums. However, even the Legislature, realizing that it was being “conned,” wrote that “...the Legislature finds the statutory remedy herein provided is intended to provide an adequate and reasonable remedy... now and into the foreseeable future.” (Emphasis added.) (Stats. 1975 Second Ex. Sess. 1975-1976, Ch. 1, pages 3949-4007.)
Business & Professions Code §6146 was upheld by a bitterly divided court in Roa vs. Lodi Medical Group, Inc. (1985) 37 Cal. 3d 920. However, it is well settled that a classification which once was rational because of a given set of circumstances (the perceived “malpractice crisis”) may lose its rationality (in the “foreseeable future”) if the relevant factual premise is altered substantially (Brown vs. Merlo (1973) 8 Cal. 3d 855, 569).
Quite recently, the United States Supreme Court had occasion to hold unconstitutional, the Voting Rights Act of 1965, whereas 40 years earlier, given the circumstances of the Civil Rights movement, especially in certain southern States, the law had been held constitutional.
In Shelby County (Alabama) vs. Holder (A.G.) 570 U.S.—, 133 S. Ct. 2612 the chief justice of the United States wrote:
The Voting Rights Act of 1965 employed extraordinary measures to address an extraordinary problem... Reflecting the unprecedented nature of these measures, they were scheduled to expire after five years.
Nearly 50 years later... there is no denying that the conditions that originally justified these measures no longer characterize voting in a covered jurisdiction... Northwest Austin Municipal Utility District No. 1 vs. Holder 557 U.S. 193, 203-204 (2009)....
As we put it a short time ago, “The Act imposes current burdens and must be justified by current needs.” (Citing Northwest Austing, supra.) (Emphasis added.)
Finally, the court stated that:
“Congress may draft another formula based on current conditions. Such a formula is an initial prerequisite to a determination that exceptional conditions still exist, justifying such as an ‘extraordinary departure from the traditional course of relations between the states and the federal government... Congress must ensure that the legislation that passes... speaks to current conditions.” (Emphasis added)
The end of the “foreseeable future,” mentioned by the Legislature in its preamble to MICRA, came to pass more than a quarter century ago, with the enactment in 1988, of Proposition 103. For the first time in history, the State of California, by and through an elected insurance commissioner, was given the power to revoke premium raises of various types of insurance including medical malpractice insurance (see Insurance Code §1851).
Parenthetically, the recently failed Proposition 45 campaign would have removed health insurers from the list of exceptions set forth under Proposition 103—Insurance Code §1851. Because Proposition 45 has not succeeded, health insurance companies (e.g., Kaiser, Wellpoint, Aetna) need not worry about the insurance commissioner “prohibiting or revoking massive premium increases.”
Alternatively, Business & Professions Code §6146(a) is unconstitutional, as developed by the dissent in Roa vs. Lodi Medical Group (1985), supra.
It is now almost 30 years since the Supreme Court decision in Roa, supra and the conditions referenced by the legislature in MICRA’s preamble have long since ceased to exist. (There have been no “malpractice crises” since 1988 and the adoption of Prop. 103.)
If MICRA’s objective of “reducing the costs of malpractice defendants and their insurers” could originally be justified by “the prospect that, in the absence of some cost reduction, medical malpractice plaintiffs might, as a realistic matter have difficulty collecting judgments for any of their damages,” this purpose can no longer support MICRA’s constitutionality, because, as stated, there have been no medical malpractice “crises” since 1988.
As recently as October 22, 2014, a Los Angeles Times article, “Doubts Raised About Medical Mergers,” points to the most likely culprits when future medical costs “skyrocket.”
Therein, it is said:
Raising fresh questions about healthcare consolidation, a new study shows hospital ownership of physician groups in California led to 10% to 20% higher costs overall.
The UC Berkeley research, published October 21, 2014 in the Journal of the American Medical Assn., illustrates the financial risks for employers, consumers and taxpayers as hospital systems nationwide acquire more physician practices.
Health insurers typically pass along these increased costs in the form of higher premiums for employers and workers. Consumers also face higher prices with insurance deductibles rising.
“I think this consolidation wave is virtually unstoppable,” said James Robinson, the study’s lead author and a UC Berkeley professor of health economics. “Left to itself, it will increase the cost of healthcare.”
It is therefore clear that, in the absence of any malpractice “crises,” Business & Professions Code §6146’s burden on the ability of injured plaintiffs to obtain adequate legal representation can no longer be justified, if ever it was.
Given the foregoing, it is clear that Business and Professions Code §6146(a) is obsolete, or unconstitutional or both.
Copyright, 2014, Nathaniel J. Friedman