Senate Bill 88 – Arbitration
Testimony of John A. Bastulli, M.D.
May 23, 2006

I truly appreciated the opportunity to testify before this committee on previous occasions. At the time of my last testimony, I indicated that 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. As part of these ongoing discussions, we at the AMC/NOMA have assembled a series of recommended changes to SB 88. The substitute bill that you have before you includes these recommended changes. These recommended changes are as follows:

• SB 88 - legislation sponsored by Senator Kevin Coughlin (R-Cuyahoga Falls) provides for a pilot project in Northeastern Ohio to require alternative dispute resolution of medical malpractice claims. Specifically, pursuant to a pilot program administered by the Ohio Department of Insurance and Ohio Supreme Court, the Bill now requires all medical malpractice claims in Cuyahoga, Geauga, Summit and Lake counties to be submitted to Arbitration. This shall be done before a lawsuit if filed and the Bill provides for a tolling of the Statute of Limitations of the Claim. 

Significant changes in the Substitute Bill include:

• The arbitrators chosen by the parties must be a medical expert in the same area of specialty that is the subject of the claim,
• The third arbitrator, chosen by the parties arbitrators, serves as a chair of the panel and must have practiced law for at least eight (8) years, and be a member of the American Health Lawyers Association, the American Arbitration Association or similar dispute resolution service. 
• The arbitrators do not make findings regarding damages. The arbitrators rule on the applicable standard of care, if the defendant deviated from that standard and if that deviation was the proximate cause of the claimant's injuries, 
• Any party may reject the ruling of the panel and proceed to Court but they become liable for opposing attorney fees if they then do not prevail at trial, 
• The parties, by mutual consent, may at any time agree to mediate their dispute. If the dispute is not successfully mediated, the dispute shall be arbitrated before being eligible for court proceedings. 
• In addition, the bill requires that the plaintiff submit an Affidavit of Merit with the filing. 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.

Other 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. A provision has been 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. The new bill also requires 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. 

Data has shown that Ohio physicians experience higher liability insurance premiums than in many other states. In previous testimony I provided the committee with data from the Ohio Department of Insurance that clearly showed that physicians in the Northeastern Ohio counties continue to experience the highest rates in this state. In fact, according to a recent report from the Medical Liability Monitor, Ohio doctors still pay some of the highest rates in the nation. So while you may hear that tort reform in Ohio is causing a downward trend in rates, the reality is that physicians still pay incredibly high premiums and this impacts on their ability to practice. A recent editorial in the Plain Dealer by Senator Bill Frist stated that “while liability premium increases have leveled off over the past year, many doctors still have to pay six-figure sums just to stay in business…not surprisingly many leave the state altogether. This seriously endangers the quality of medical care for everyone in Ohio.” Senator Frist wrote this editorial due to the fact that the U.S. Senate once again failed to pass medical liability reform at the federal level. Clearly, the battle remains within our state - 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. 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. 

Compared to a traditional trial, arbitration can usually be completed quickly and less formally. The New England Journal of Medicine recently published two studies from the Harvard School of Public Health , detailing that the current system is inefficient, lacks sensitivity and specificity and does not promote patient safety. The authors believe that in order to improve the system and advance patient safety there needs to be a fundamental change in the current system with an emphasis on alternative dispute resolution. Some of the key points from the two studies are as follows:

• Only 2% of negligent injuries resulted in claims and only 17% of claims appear to involve negligent injury. Compensation was paid for 28% of the claims where there was no medical error and 16% of the claims where there was no discernable medical injury whatsoever. 
• The average payment for a claim that did not involve a medical error was approximately $313,000.
• For every dollar spent on compensation, 54 cents went to administrative expenses (including those involved – lawyers, experts and courts).
• The current court system does not deter medical negligence and the notion that public disclosure would reduce litigation is largely unproven and somewhat implausible. 
• Defending a medical liability claim is expensive and long, taking an average of five years to resolve.

The authors believe that data regarding medical errors is underreported and impedes ongoing patient safety. The AMC/NOMA believes that the arbitration detailed in SB 88 provides an equitable alternative to the current court system and is fair to society as a whole. It will promote efficiency within the system and provide an opportunity to improve the quality of healthcare services that our patients receive.

Thank you once again for allowing me the opportunity to present here today.