Road to proportional malpractice reform
Pennsylvania governor Mark Schweiker has indicated that he will sign into law a bill hailed by many as the first step in reforming the state’s out-of-control malpractice liability system.
The law will address the issue of joint and several liability. Under joint and several liability, a company found even 1%, 5%, or 10% liable in a civil suit can be held 100% financially responsible, the legislators said. Liability is "joint" because all of the defendants are liable together, and "several" in that any defendant may be pursued for the entire verdict. Thus, a plaintiff may recover the full amount of the award from any of the defendants. The result is that litigants often go after companies with deep pockets, putting Pennsylvania at an economic disadvantage with regard to attracting, creating, and retaining jobs. If the provisions in the bill are enacted, defendants found to be at fault would only be held liable for their proportionate share of damages. Under the reform measure, defendants who are found by a judge or jury to be less than 60% liable would only pay their fair share of the overall liability.
The effort to amend the reform provisions into Senate Bill 1089 was led by Sen. Jeffrey Piccola (R-Dauphin), Sen. Hal Mowery (R-Cumberland County), and House Majority Leader John Perzel (R-Philadelphia).
Senate Bill 1089 will begin to return fairness to our civil justice system," Piccola says. "It offers hope to Pennsylvania’s business community that reform of joint and several liability and other critical tort reform measures which have been adopted in most states are finally under way in the commonwealth."
Among the hardest hit by joint and several liability are health care facilities because they must obtain insurance above the mandated limits, the legislators noted. "In fact, hospitals may be named in a suit simply because they have insurance coverage," says Piccola. "In the current climate, their insurance premiums continue to escalate while the number of insurance underwriters decreases."
Five commercial carriers that insured more than half of the hospitals and health systems in Pennsylvania have left the market or are not renewing policies during this current annual insurance renewal cycle, Mowery says. Mowery and Piccola cite several cases in which Pennsylvania hospitals have had to reduce services and lay off employees as a result of joint and several liability’s affect on insurance coverage.
Among them is Methodist Hospital in Philadel-phia, which cited the rising costs of malpractice insurance for its decision to cease delivering babies, a service it has been providing for more than a century. As a result, 91 full-time and part-time Methodist employees will lose their jobs. Albert Einstein Healthcare Network was forced to lay off 127 employees, the direct result of rising medical malpractice premiums. Havertown’s Mercy Community Hospital closed its emergency department and all inpatient services earlier this year. Summit Health in Chambersburg has closed its Healthy Beginnings Maternity Clinic after 15 years of serving 200 Medicaid patients annually. Memorial Hospital in York County had to go as far as London in search of affordable excess insurance coverage.
The potential of assuming 100% of a verdict has forced several Pennsylvania hospitals to reduce services and lay off employees so that they could afford the necessary insurance coverage. This has come at a time when five commercial carriers that insured more than half of the hospitals and health systems in the state have left the market or are not renewing policies during the current insurance renewal cycle. The legislation retains four additional circumstances where a defendant could be liable for full payment of an award: intentional misrepresentation, intentional tort, violations of the Hazardous Sites Cleanup Act, and cases where alcoholic beverages are served to a visibly intoxicated patron.
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