By Christopher Guadagnino, Ph.D

Published April 1999

Earlier coverage of tort reform in PA

• CAT Fund issue still caustic

• CAT Fund fight brings historic tort reform

Discussion Forum

• PMS has abandoned its major goal

• 'Present worth' is simpler, more direct

• React to this article in the Discussion Forum.

PND: Who are the members of the PCJC?

RM: The coalition has a wide range of memberships from the medical, business and public sector communities. Members include the Pennsylvania Medical Society, county medical societies, individual physicians, specialty groups, hospital medical staffs, the Hospital and Healthsystem Association of Pennsylvania, the Pennsylvania Business Round Table, the Pennsylvania Chamber of Commerce, the National Federation of Independent Businesses, non-profits, large corporate groups, borough and township supervisors, certified public accountants.

PND: How did the coalition come together?

RM: It’s not the first time a coalition has attempted to work on lawsuit abuse reform, but past efforts have not accomplished their agenda. The Medical Society went on a major campaign for medical malpractice tort reform several years back that culminated in a bill that was passed in the state. That was the first successful tort reform enactment in this state’s legislature in 20 years. Then that bill got substantially watered down by the Supreme Court after it had been signed into law by the Governor. The growing liability crisis in the state has continued over many years and there were groups that sat down to explore whether or not it was time to bring a coalition together again to succeed this time in getting some lawsuit abuse reform passed in Pennsylvania, which is one of the few states in the nation that has not passed a malpractice reform bill. Various groups sat down to do discuss how to get this goal accomplished and to establish some core elements that they had in common.

PND: What pluses and minuses are there to working in a coalition like this?

RM: A few years ago the Medical Society was basically out there on its own on medical malpractice tort reform. The Senate leadership asked us to go into negotiations with the Trial Bar Association or no bill was going to move out of the Senate. So we did enter into those negotiations and out of that came a version of the bill that was not as strong as what we were successful in achieving on the House side. Some have said the bill that we got passed was a modest bill and the Supreme Court watered it down, so all of our efforts and our tort reform rally didn’t lead to much. I think all of us were disappointed with what the final outcome was. That bill got us to first base, but we’re never going to get much further unless the Society gets a coalition going working on a similar agenda. Given that the Trial Bar Association itself is very strong, well organized and is rather substantial in what they do in terms of political contributions, if we were going to succeed in getting this passed in Pennsylvania it is going to require a united front. So for that reason we decided to form the coalition.

PND: Didn’t the Medical Society agree not to put forth an independent tort reform proposal as a condition of the tort reform bill?

RM: Yes, the Medical Society did have a handshake agreement that we would not put forth a medical mal-only bill within a matter of several years. At that time we didn’t feel that we were giving up very much anyway because it was unrealistic for us to go in within a matter of a few years to get another medical mal after fighting for what we did get. We were very clear at that time that we were going to be a full-fledged member and participant in the PCJC. There has been some communication out from the Trial Bar Association that our activities with the PCJC were in violation of that handshake agreement and they clearly were not. That has been clearly understood by the leadership of both the House and Senate.

PND: Wouldn’t you have more discretion on what’s in the proposal if you were working independently?

RM: Sure. But the chances of success would probably counter-balance that, and then some. Any time you work in a coalition you have to be willing to work within that business type framework. I’ve been very pleased that, by and large, we do agree on much of what needs to be accomplished. Most of the concepts in our package are fairly common reform items that are in most legislation of this type.

PND: What role have physicians played in crafting the proposal?

RM: The Society has a committee that’s been actively involved in the whole tort reform effort and the CAT Fund issue. The chairman of that committee has been apprised of this process as it has gone forward. I presented a report to the board of trustees of the Medical Society at every meeting since the coalition was more formally developed, since I have been there as a sitting officer. We felt that is was important for the coalition to be chaired by a business interest and have the Medical Society there as the vice chair, since we were just in the legislative arena for medical mal-only reform. We wanted it to represent primarily mid- to small-size businesses. The coalition has a chairman who is from an architectural and civil engineering firm.

PND: Can you describe the aspects of the proposal that are most important for physicians?

RM: The items that are important to physicians have to do with discouraging frivolous lawsuits, requiring expert review of potential cases, trying to repeal joint and several liability, trying to put some limit on delayed damages, trying to reduce awards to present worth, limiting recovery of punitive damages, eliminating delay damages, enacting tougher standards for expert witnesses and eliminating what’s often called junk science. The collateral source rule is also another issue that’s important to physicians. There are also elements in the bill that are more specific to product liability. Those are matters that have been foremost in our minds that clearly can save some money in the system, recognizing that physicians feel that they pay an excessive amount for their liability insurance in this state. One of the difficulties we have had in negotiations with trial lawyers has been identifying which of these proposals has actually saved money and which might make the system a little quicker or smoother. The trial lawyers are often quick to agree to some small areas of reform that might do very little and not save much money, while the ones that would save the most money for the state and everyone involved are the ones that they are often strongest against.

PND: Can you explain what is meant by "reduce awards to present worth"?

RM: Currently, awards for future losses are paid in a lump sum and are not reduced to their present worth, resulting in unrealistic awards that unfairly penalize the party required to make payment.

PND: The PMS previously supported periodic payments for awards of future losses. Why did you replace that approach with this one?

RM: We in the coalition felt that reduction to present worth accomplished much of the same thing as periodic payments. Model bills that have been written on periodic payments are complicated, often 20, 30 or 40 pages in length, because of all the conditions you have to try to address. Both approaches allow you to reduce an award to present worth and medical malpractice insurance premiums ought to be about the same for both.

PND: How do you plan to move this proposal into action?

RM: The initial legislative package entitled, The Lawsuit Abuse Reform Bill—Senate Bill 5—will be introduced by Sen. Robert Thompson on March 16. Meanwhile, a letter from the senators has gone to the Court calling on it to consider changes in civil procedures for evidence. That has been extensively worked on with the Senators and the legislative leaders. If we are able to do that, it will preclude us from having to work through the legislative arena for some issues. It is an approach that we feel fits Pennsylvania, given the unique powers that the Supreme Court seems to want to have over rules and procedures when, in their view, the legislative process has overstepped its boundaries.

PND: What’s your assessment of the chances of the reform proposals passing?

RM: I think we have a very good shot at getting a strong lawsuit abuse reform package adopted in Pennsylvania. The coalition is united in their effort and very committed to this cause. We also have had strong support from the National Civil Justice Reform group, which has been instrumental in working with other states that have been successful in getting lawsuit abuse reforms passed. On the court side, we’re a little unsure what will happen. We’re hoping that with some legislative pressure the Court will seriously look at some of these matters. If we don’t make some movement there, we are going to have the legislation expanded to include those areas that we still feel are important. I think we have a fairly good shot in the General Assembly. We have conducted an economic impact study with Penn State University. We’ve done a public opinion poll. It’s very clear from those that the proposals can provide an economic lift in the state and that the public is ready for some changes. In the past several years there’s been a lot of attention to how frivolous lawsuits have clogged the courts and delayed the more legitimate cases. This set of proposals is not denying anyone’s right to their day in court, but is simply trying to put some personal responsibility and some fairness into play. Hopefully, the Governor has an interest in this agenda because many of his Republican colleagues in other key states have in fact passed bills that Republican governors have signed.

PND: How soon do you think the proposal might be acted upon?

RM: This is a long term commitment on our part. We’ll stay with it as long as it takes to get it done. The legislative side will depend upon what other major issues come up. We think this can be one of the major legislative initiatives in this current session and we’d like to see a vote on it obviously as soon as possible. A lot will depend upon what changes to the legislation will have to occur as a result of what happens on the court side. So it’s very difficult to put a time frame on it.

PND: How would you rate the importance of this initiative in terms of the Medical Society’s priorities?

RM: Tort reform for the Medical Society has been one of the top priorities for a number of years and we continue to view it that way. The system is badly broken and we feel it needs fixing. We put a very strong effort forward in our own medical malpractice bill and felt that we came up quite a bit short of what we had hoped for. But I think that some physicians fail to understand that at least some progress was made there. And now if we can collect on that momentum and build on it with this broad-based coalition to get yet another level of reforms passed, we will have made another giant step forward.