June 27, 2003
Source: The Executive Office of the Governor
The Honorable James E. King, Jr.
President of the Senate
409 The Capitol
402 South Monroe Street
Tallahassee, FL 32399-1300
Dear President King:
Actions speak louder than words.
Many words have been spoken about the current crisis impacting health care in our state. While a healthy and vigorous debate is essential to evaluate good policy in our democratic process, words alone can not solve our problems. Actions count. Ultimately it will be our actions that either improve access to health care in Florida or fail to do so.
I am encouraged by the actions you and your colleagues in the Senate have taken in recent days. Working together with the leadership of the House as well as my office, you have taken many issues that divided us on medical liability insurance reform and transformed them into common ground on which to build. The consensus reached so far -on physician discipline and patient safety, for example -- represents much hard work from all parties, and all should share credit for it.
However, much more work still remains to be done. The major issues in dispute have yet to be resolved. I respectfully submit to you in writing those provisions of the current Senate bill that I believe represent insufficient action, nonexistent action, or counterproductive action. I urge you to review these elements of your plan again, because the people of Florida need a bill that represents real reform.
Provisions in the Senate bill that must be strengthened:
* A $6 million cap will not be effective. The Senate proposes a $500,000 cap on non-economic damages, but in truth it creates three categories of defendants that can each be sued for up to $2 million. No actuarial study exists suggesting that a $6 million cap will substantially reduce payouts or insurance premiums, and in fact, a review of cases by at least one Florida newspaper shows that your cap would have impacted only eleven out of 1,300 cases insurance companies reported settling last year. One of your own members has even been quoted saying that a good lawyer would have been able to help most plaintiffs find a way around this proposed cap. The loopholes he referenced eliminate any chance your cap would create the certainty in the insurance market necessary to reduce premiums; instead it would create certainty only for trial lawyers. Finally, the sunset provision of only three years -- despite a four-year "tail" for many lawsuits and a certain Supreme Court challenge -- further erodes any credibility of this cap.
* A bill without real bad faith reform will not decrease costs. Florida insurers currently settle about 50 percent of the claims made against their insured physicians, compared to about 30 percent across the nation. They do this not because our physicians are less competent but because our well-intentioned bad faith laws stack the deck for the trial lawyers. Because of the unintended consequences of the current bad faith language, Florida insurers regularly settle cases in which their insured doctor is not at fault, and even when that doctor wants his or her day in court to defend a hard-won reputation.
While I am encouraged by the conversations between the Senate, the House and our office - and especially by the Senate's movement toward our position that only the physician should have a "bad faith" cause of action against his or her insurer -- I believe we still have further to go. Maintaining the status quo on bad faith is the top priority of the trial lawyers. I urge you to continue the progress we have made.
How the current Senate bill reaffirms the status quo:
* No protections for emergency room personnel. The state and federal government mandate that these health care providers accept every patient they receive, yet the current Senate bill offers no protections for the heroes who work on the front lines of our health care system. We must give consideration to hospital emergency rooms and their personnel, including physicians who remain available on-call for emergencies. Our teaching and public hospitals enjoy such protections, and those who work in these high-pressure settings should be treated similarly. I am hopeful our continued discussions will help us arrive at something that provides real protection to our emergency safety net.
* Hospital boards continue to have liability for medical errors without the authority to take corrective or preventive action. Florida's hospitals currently have little say in ensuring adequate peer review and discipline within their organization, despite the fact they are often held vicariously liable when something goes wrong. We propose giving hospital boards authority to ensure appropriate peer review is taking place and that proper steps are taken when there are problems in quality of care. The current Senate bill does contain provisions for protecting the peer reviewers and board when the process works correctly, but there are no provisions for when the medical staff refuses to act, or its actions are not deemed sufficient by the hospital board.
* No fairness for access to medical information. Equal access to information should be one of the central principles of our judicial system. Once a plaintiff files a medical malpractice claim, fairness demands that the defendant should have access to all the information regarding the patient's current treatment, and the opportunity to contact those physicians providing it. The Senate continues to deny the defense full access to a plaintiff's treating physicians once a claim has been made.
* No protection for small businesses and employers providing insurance to their employees. The Florida Supreme Court recently ruled that insurance plans could be held vicariously liable for the actions of doctors within their network. I agree that if insurers direct the care of their employed physicians, they should be held liable. But insurers in general do not direct the care of contracted doctors, and this ruling, if not fixed legislatively, will create an entirely new deep pocket for trial lawyers. Because insurance companies will simply pass along these increased costs, the real losers will be Florida's small businesses and their employees, who will have to pay much higher premiums for the same amount of coverage.
How the current Senate bill could exacerbate the crisis:
* A new tax to fund a $16 million experiment. Like others, I feel that a patient safety authority is well worth exploring for our state. The Academic Task Force recommended the creation of such a body to collect and report data, and further recommended the consideration of a non-profit entity to administer the authority. I am committed to investigating our options, including the potential privatization of the existing Center for Health Statistics in partnership with a university or other such entity.
But a new tax on people who are sick or in nursing homes cannot be justified without further study on whether this approach can work in Florida. The Senate proposal amounts to a $16 million experiment, without any study as to the formation, function, mission or soundness of this new bureaucracy.
* More steps in the process will mean more costs. The Senate bill effectively will mandate a two-trial system, which will be lucrative to lawyers but of little use to anyone else. Pre-suit medical review panels, while well intentioned, will not reduce costs. The expense of a mini-trial so early in the litigation process will actually increase costs, a fact which has been acknowledged by insurers and trial lawyers alike.
* A big government solution would put taxpayers at risk. Rather than creating a competitive insurance market, the Senate proposes to abandon entirely the principles of the free enterprise system by endorsing a taxpayer capitalized insurance entity. I cannot support this approach. With insurers fleeing the state due to their losses, I cannot imagine exposing our taxpayers to the same risk that has driven other insurers out. I could not be more opposed to this, philosophically or practically.
* Unfair double recoveries and deep pockets. The Senate bill even takes the extraordinary step of overturning the Fabre decision of the Florida Supreme Court. This decision affirmed that assigning the share of fault in a case should not depend on who has been sued or who is legally a party in the case. Repealing this decision, in effect, would unfairly cause some defendants to pay more than what is their fair share based on their portion of the fault.
I welcome discussion and debate, and I have become more optimistic in the last few days -- thanks in large part to your leadership and that of Speaker Byrd -- that a real solution based on real reform is possible. But physicians and a competitive insurance market will not return to Florida unless our words are matched by our actions.
We need meaningful hard caps on non-economic damages. We need to revise our "bad faith" language so that the rate of settlements approaches more closely the national average and more doctors can get their day in court. We need physician discipline that is based upon improving care rather than simply creating a lottery mentality in our litigation system. We need a real discussion about how to improve access to health care services for our vulnerable citizens.
And importantly, we need to focus on sound public policy rather than allowing a small but powerful group of wealthy trial lawyers to protect their huge incomes at the expense of women who need women's health care services, children who need specialized health care services, and our rural poor, who have nowhere else to turn when their doctor leaves. And we need all this urgently.
I have pledged on more than one occasion to call the Legislature back into special session until real reform reaches the people who depend on Florida's health care system. Here then is my plan for additional special sessions over the course of the next few months:
* Special Session C: July 9 - July 16, 2003
* Special Session D: July 22 - July 28, 2003
* Special Session E: August 5 - August 13, 2003
* Special Session F: August 20 - August 28, 2003
* Special Session G: September 3 - September 10, 2003
* Special Session H: September 18 - September 26, 2003
I look forward to working with you and continuing a dialogue that will
hopefully net results for the people we serve.
June 27, 2003