Last week, the Joint Finance Committee passed a budget with numerous non-fiscal policy items tucked in amongst the myriad tax increases, fund raids, and increased borrowing. One of the most talked about policy items, the changes made to “joint and several liability” laws, still has yet to resonate with the public. (Perhaps opponents should introduce a mascot, like “Whiskers, the Joint and Several Liability Bunny” so people get the idea.)
In order to clarify what effect the new law may have on the legal climate in the state, the Wisconsin Medical Society (which represents the state’s doctors) has provided us with a handy-dandy example of how it will affect health care:
A patient sues three physicians as a result of an injury. After trial, a jury determines that physician A was 30 percent negligent, physician B was 25 percent negligent and physician C was 45 percent negligent. Under current law, each physician and his or her insurer would be liable to pay based on the percentage of negligence because each physician was less than 51 percent negligent. In this example, none of the three physicians would be required to pay the entire award.
The proposed change in the law, as amended by the Joint Committee on Finance, replaces the 51 percent negligence threshold for joint and several liability to apply to 20 percent. Therefore, under the new proposal any of the physicians could be required to pay the entire award because of joint and several liability. This could be especially problematic depending on where the physicians are employed. If a medical liability case involves physicians who pay into the Injured Patients and Families Compensation Fund and some who do not, this creates the scenario where “deep pockets” become the primary incentive for a suit rather than the amount of negligence involved in a case. For example, if a physician who pays into the IPFCF is found to be 20 percent negligent while a non-paying physician is found to be 80 percent negligent, the plaintiff could recover the entire amount of the liability from the physician who pays into the Fund despite that physician’s low level of negligence.
Wisconsin’s medical liability insurance laws require that the Fund pay for claims that exceed the primarily level of medical liability coverage, which could mean more money coming out of the Fund in cases described in this example. If the Fund has greater liability because of the joint and several liability issue, then Fund fees could increase dramatically. The potential for increased liability for the Fund based on changes to the comparative negligence statute might be something that the actuaries consider in calculating the financial risk to the Fund. Private medical liability insurers might also increase insurance premiums for primary coverage if they believe there is a risk of paying more in claims because of the proposed change.
In short, health care just got more expensive. Higher lawsuit payouts will mean greater costs to doctors and insurance companies, which will need to pass these costs along to consumers. Plus, it could lead to less efficient care as physicians get pushed more toward defensive medicine, ie. overutilization of MRIs when an x-ray would do, etc.
This appears to be the logic of legislative Democrats – they’re going to make your health care more affordable by making it more expensive. Sadly, people looking for cheaper health care don’t generally make campaign contributions. So when two liberal interests collide, you can bet the one that writes the checks out during election season will win.