Mr. Chairman and members of the Senate Insurance, Commerce and Labor Committee. Good Morning, I am Dr. John Bastulli, Vice President of Legislative Affairs of the Academy of Medicine of Cleveland/Northern Ohio Medical Association (AMC/NOMA) a regional medical association in Northeastern Ohio representing over 4,300 physicians. I am also a practicing anesthesiologist in Cleveland, Ohio and I am testifying today in support of Senate Bill 88.
I truly appreciated the opportunity to testify before this committee in April of last year and I would like to take a moment to present to you background information on what has transpired since I gave that testimony.
Senator Coughlin has been very supportive of our efforts and continues to reach out and meet with interested parties regarding the parameters of this bill. We truly appreciate his strong leadership on SB 88. It is our hope that based upon the discussions that have taken place with the interested parties that your committee will see a Substitute Bill in the very near future. As part of these ongoing discussions, we at the AMC/NOMA have assembled a series of recommended changes to SB 88 that we are hopeful will be a part of that Substitute Bill. These recommended changes are as follows:
Currently, SB 88 would encompass a pilot project throughout the entire state. However, the AMC/NOMA supports the concept of mandatory non-binding arbitration in a limited geographic area. We are working with the Ohio Supreme Court and the Ohio Department of Insurance (ODI) to define the geographic scope of the arbitration pilot. We plan to look at both existing medical malpractice premium rates and current caseloads as part of that review. At a minimum the AMC/NOMA is advocating that Cuyahoga, Summit and other Northeastern Ohio counties be included in this regional arbitration pilot.
In addition, we support requiring that an Affidavit of Merit provision be included in SB 88. The affidavit would be required as a part of the arbitration process in SB 88. The intent is that the affidavit would be filed with the arbitration panel along with the Notice of Intent to Sue. Thus, Civil Rule 10 in its present form or in an amended form will continue to apply to medical malpractice claims.
We also support a revised process for the selection of arbitrators. The process would be set up so that the plaintiff and the defendant would each choose an arbitrator. These individuals must be either a former judge or a practicing attorney with at least 8 years of experience in arbitration. The two selected arbitrators would then be required to agree on a Chairman who must possess the same background as the other panel members as well as having additional certification by any recognized association that provides arbitration services (i.e. The National Arbitration Forum, the American Arbitration Association or the American Health Lawyers Association.)
We are also supportive of providing the litigants with the ability to opt out of the mandatory non-binding arbitration process to pursue a mandatory mediation process - but only if both parties agree to do so. In addition, we would like to clarify that the costs outlined in SB 88 include attorney fees by amending 2339.16(C) with "Actual Costs shall also include attorney fees."
Other suggested changes include clarifying that the arbitration panel does have the ability to rule on the validity of an Affidavit of Non-Involvement as proscribed in ORC 2339.04. We have also suggested that a provision be added to 2339.16 that would require that should a lawsuit be filed post arbitration, plaintiff's counsel must notify the Chairman of the panel that a lawsuit has been filed, and the Chairman must then file the evaluation with the Court. We have also suggested that a section be added to 2339.10 to require the panel to set a case management schedule allowing for written discovery, depositions and the exchange of expert reports. And finally we would request that the $60.00 sanction in 2339.11(B) be replaced with "may be fined at the discretion of the majority of the panel."
As I mentioned to this committee last April, the citizens residing in Northeastern Ohio have always had access to high quality, state of the art medical care. We have some of the world's best physicians and finest medical institutions. The medical care in our region has been consistently recognized by many national publications, as among the best our nation has to offer. The concentration of medical services in Northeast Ohio makes the practice of medicine the largest employer in the region. In fact, a recent study commissioned by the regional hospital association in our area shows that the total economic impact of our area hospitals and their related health care facilities is $11.58 billion. This includes a household earnings impact of $3.28 billion. These economic activities generate close to $254 million annually in state and local tax revenues. [1]
Data has shown that Ohio physicians experience higher liability insurance premiums than in many other states. In fact, based upon recent data released by the ODI, the physicians in the Northeastern Ohio counties continue to experience the highest rates in this state. For your reference, I have included the ODI data as an attachment to my testimony. [2] In addition, a survey recently reported by the Ohio Department of Insurance clearly shows that the crisis has not abated and physicians across the state agree that we need some form of alternative dispute resolution mechanism. The survey had over a 17% response rate and showed that 4 out of 10 physicians have retired or plan to retire in the next three years incident to rising insurance expenses. The finding was all the more sobering since just 9% of the respondents were over the age of 64. We need an alternative to the court system and we need it now.
The proposed arbitration process outlined in SB 88 I believe provides that alternative. Compared to a traditional trial, arbitration can usually be completed quickly and less formally. The arbitration process allows the parties to gauge how others view the case and assist the parties in arriving at a settlement agreement more quickly. Arbitration has many positive aspects, such as relieving the backlog of cases pending in courts, cost effectiveness, flexibility entering into the process, and decreasing the time it would take to resolve a matter. It has been shown to cost less, result in more predictable awards, and the process is much less intimidating and emotional. I realize that there are other forms of alternative dispute resolution concepts and some of these are still under discussion, however, the usage of arbitration as an alternative to the court system in Ohio is not a new concept and it is already utilized for other types disputes.
I have included as an additional attachment to my testimony a letter from an attorney from the Northeastern Ohio area that has dealt with this type of dispute resolution process as a part of his practice. He supports this legislation because it offers a fair mechanism for the respective sides in a medical negligence situation to have their claims and defenses fully presented. He notes that the prospect of a fair hearing by an experienced panel of arbitrators, the possibility of further court action if necessary, and the mechanisms built into the legislation which are designed to deter the pursuit of frivolous claims, appears to be a fair balancing of the respective concerns of all potential participants in the proceeding. I know that he and other attorneys versed in arbitration would be willing to testify to this committee at a later date.
The AMC/NOMA believes that the current system falls far short of its social goals of promoting patient safety and compensating wrongly injured patients. We believe that individuals truly harmed through medical negligence should be compensated through a fair and timely process. However, this process should be one that is equitable to all parties involved - including society as a whole. Unfortunately, our current system does not promote patient safety and in fact adds huge expenditures related to the cost of practicing defensive medicine.
In addition, it is clear that our current system is not very sensitive or specific. The key predictor of payment is the plaintiff’s degree of disability not the presence of negligence. The system is also inefficient with approximately 60 cents of every dollar absorbed by administrative costs, predominately legal fees. Presently we have a clash of two cultures – malpractice law and patient safety. The punitive individualistic adversarial approach of tort law is opposite to the non-punitive systems oriented cooperative strategies promoted by advocates of the patient safety movement.
In a recent study from the Harvard School of Public Health it is estimated that only 2% of negligent injuries resulted in claims and only 17% of claims appear to involve negligent injury.
The study also noted that it is an unfortunate reality that a transparent system with open reporting regarding medical errors with disclosure to patients and public access would probably increase litigation and not decrease it. There is no evidence that the current court system deters medical negligence. A notion that public disclosure would reduce litigation is largely unproved and somewhat implausible. It is easy to see how data regarding medical errors is underreported and impedes ongoing patient safety. The study further outlines the belief that in order to advance patient safety, there needs to be a fundamental change in the system emphasizing alternative dispute resolution. [3]
One final point – I noted
earlier in my statements that arbitration is utilized in other types of
disputes. A recent study regarding
pre-dispute arbitration in other types of arbitration cases (such as businesses
vs. consumers) noted that many independent studies, including those conducted
by the American Bar Association, have confirmed the comparative benefits of
arbitration (versus lawsuits) for both businesses and consumers. [4]
The study demonstrated that in many instances both trial attorneys and
consumers view arbitration favorably in terms of timeliness, cost and
access. Additionally, both lawyers and
consumers found arbitration to be a fair process and 65% of Americans would
choose arbitration over a lawsuit to resolve a dispute.
The AMC/NOMA, the physicians
of Northeastern Ohio, the citizens of Ohio and the civil justice system need
relief, and this legislation would provide a process that could assist in
bringing medical negligence cases to a quicker resolution in a more
cost-effective manner. It is presented
as a neutral and informal suggestion for improving the overall quality of how
alleged medical negligence cases are resolved.
I thank you for allowing me to present my comments today.
[1] “The Impact of Hospitals in NE Ohio on the Economy of the Region” – University of Cincinnati Study commissioned by the Center for Health Affairs, Cleveland, Ohio – 2005.
[2] Ohio Department of Insurance – Ohio Physicians Medical Malpractice Rates – Selected Physicians – by County, November 2005.
[3]
David M. Studdert,
LL.B, Sc.D., M.P.H., Michelle M. Mello, J.D., Ph.D., and Troyen A. Brennan,
M.D., J.D., M.P.H. Medical Malpractice
Health Policy Report, New England Journal of Medicine, January 15, 2004, pgs
283-291
[4] The Case for Pre-Dispute Arbitration Agreements: Effective and Affordable Access to Justice for Consumers – Empirical Studies and Survey Results – National Arbitration Forum, 2004.