Rep. Ann Nischke (R-Waukesha) wasted no time this week advancing medical liability reform through the Legislature. On Tuesday (October 18), the Assembly Committee on Insurance, which Nischke chairs, held a public hearing on legislation reinstating a cap on excessive jury awards of pain and suffering (AB 766). By Wednesday (Oct. 19), the legislation had passed out of Committee, with all nine Republicans voting for the passage and all six Democrats voting against. AB 766 is on its way to the full Assembly for an October 25 vote.

AB 766, authored by Rep. Curt Gielow (R-Mequon) and Sen. Scott Fitzgerald (R-Juneau), would reestablish caps on jury awards for pain and suffering at $550,000 for minors and $450,000 for adults. Also passed out of Committee were collateral source reforms (AB 764), and legislation to include all first year residents in the Injured Families and Patients Compensation Fund (AB 765).

"We commend Rep. Nischke for moving so rapidly with this legislation," said WHA’s Eric Borgerding. "We no longer have a cap on pain and suffering awards, and the impact this is already having in Wisconsin is undeniable. We have to address this problem now before it gets completely out of control. On behalf of our 130 member hospitals, I urge members of the Assembly to support this legislation." (See news release below.)

The October 18 hearing was highlighted by the real life impacts the loss of the caps on excessive pain and suffering damages can have on health care in Wisconsin communities.

Among the most poignant testimony of the day came from Dr. Charles Sammis, who moved to Wisconsin after leaving Madison County, Illinois due to the Illinois medical liability crisis. Dr. Sammis explained the devastating effects the Illinois medical liability crisis and the ensuing loss of physicians has had on Madison County patients.

"In a neighboring county a young boy who had a head injury from a bike accident went to the neighboring hospital ER. No neurosurgeons. They wanted to send him to Children’s Hospital in St. Louis. The neurosurgeons there were totally full. The next place you could go was Springfield. On the flight there the boy died. These are the things that happen," Dr. Sammis told the Committee.

"In our hospital area (Madison County, Illinois) we’ve only got 25 percent of OBs left. That accounts for two that serves 50,000 people," explained Dr. Sammis. "One of the OBs called me right before I left and told me he was thinking about coming to Appleton, and he called me back after the caps were struck down and said ‘well I think I’m going to go to St. Louis instead.’"

Dr. Meetul Shah, a young family physician who moved to Wisconsin from Washington state, another liability crisis state, explained how he came to Wisconsin. "We had the choice of moving to Illinois or Wisconsin," said Dr. Shah. "When I was talking about moving to Chicago…all of my friends told me don’t come here. I’m hoping that that won’t happen here." Dr. Shah is concerned, however, that "if [Wisconsin’s premiums] get worse and worse, young physicians won’t be coming to this state."

"We don’t need to speculate, or wait and see what the impact of losing the cap will be, because our members are dealing with it right now," Borgerding told the Committee. "New physicians considering practicing in or relocating to Wisconsin are very concerned about what has happened with the cap and, more importantly, what will be done about it. They simply aren’t buying the notion that without a cap, Wisconsin will be just fine, or that because we have an Injured Patients and Families Compensation Fund there is nothing to worry about. In the real world of 24/7/365 health care, things are quite the opposite."

Claudine Taub, a physician recruiter at Ministry Health Care, echoed these concerns. Ms. Taub explained how physicians are already turning down jobs to practice in Wisconsin communities because of the loss of the cap. "The Supreme Court ruling has already had an affect on our ability to recruit at Ministry Health Care," Taub told the Committee. "I have had several doctors cancel interviews and decide to stay in Illinois and Ohio."

One of the criticisms by the Wisconsin Supreme Court of Wisconsin’s previous non-economic damage cap was that the Legislature picked the cap amount number "out of thin air." Representative Gielow, chair of the Speaker’s Task Force on Medical Liability, and Senator Fitzgerald, opened the hearing by explaining that this new cap amount was the result of thoughtful and well-reasoned deliberation.

"We have looked at every other state in the Union, we’ve looked at what caps exist in other states, what awards occurred in Wisconsin. We believe there is documentation, adequate documentation, and therefore justification to come up with these numbers," explained Representative Gielow. "We believe these bills recognize and reflect the necessary balance between fairness, affordability and availability in the area of medical malpractice insurance coverage."

"We have seen what happens in states without effective caps on non-economic damages for medical malpractice. It’s not a story with a happy ending. These states have fewer doctors, less access to health care and the practice of defensive medicine doubling up. We need to act quickly to restore responsible caps to Wisconsin before we see the same results," added Senator Fitzgerald. "The bill recognizes the need to balance adequate compensation to the victim with the need to maintain affordable and accessible health care benefits."

Several suggestions were raised at the hearing that despite the loss of limits on excessive awards for pain and suffering, Wisconsin’s Injured Patients and Families Compensation Fund (IFPCF) would somehow protect Wisconsin patients from the access crises that have afflicted states across the nation that do not have pain and suffering limits. Rep. Gielow countered that the IFPCF was only a part of what made Wisconsin’s liability system work.

"[The IFPCF] clearly helped stabilize malpractice insurance rates. We were for 10 years the envy of the nation when we had a combination of what was believed to be a reasonable cap and a patients compensation fund," said Gielow, "One of the legs of that stool has now been pulled out. We are simply trying to reinsert that leg…"

One of the most important speakers at the hearing was Rob Walling from Pinnacle Actuarial Resources, Inc. who authored "The Potential Impacts of Caps on Non-Economic Damages in Medical Malpractice Insurance in Wisconsin," an actuarial analysis of the impact of the presence or absence of caps on non-economic damages on medical liability premiums in Wisconsin. Pinnacle, one of the 10 largest property/casualty actuarial consulting firms in the country, was retained by WHA and the Wisconsin Medical Society to conduct the analysis.

Walling’s key point to the Committee was that Wisconsin’s cap on pain and suffering awards has been a crucial element of a balanced liability system that has helped shield Wisconsin from the litigation storm now wreaking havoc on health care systems across the country.

Walling explained why states in high cap and no cap states have very few insurers remaining to insure physicians. "In the high cap and in the no cap states, [insurers] paid out more than a dollar in losses over this five year period compared to the dollar of premium [they] collected. Before [paying] agents, defense attorneys, experts, any underwriting overhead, before [turning on] lights in [the] home office, insurance companies in high cap states lost money before they took care of anything but paying losses during this five year period."

Low and medium size caps clearly create a more stable and attractive environment for physicians according to Walling. "You’ve got situations where not only do health care providers see lower health care premiums, but they can expect to see more stability in those premiums, over the five year period, which gives them some confidence, that not only are premiums affordable this year and can budget for them this year, but I don’t have surprises coming from my medmal insurer next year."

Critics of caps on excessive awards for pain and suffering were not absent from the hearing, as the Committee also heard testimony from injured plaintiffs and personal injury attorneys.

Daniel Rottier, from the law firm Habush Habush & Rottier and representing the Wisconsin Academy of Trial Lawyers suggested that caps have no affect on rural physician supply and that rural communities should expect to have a shortage of specialists "because doctors prefer to be specialists; it’s more intellectually challenging, it’s more financially rewarding, and to do that you need a larger client referral base. You cannot get it in rural areas."

Rottier also noted that under his firm’s screening process, it would only take cases with potential for large awards. "I can tell you that from the screening process I run in my law firm, when the cap was $350,000 before the inflation started to cause it to go upward, if we had what we would call a cap case, in other words no economic harm, we wouldn’t bring a $350 [thousand] case, we would spend $100,000 for experts. We wouldn’t bring it," said Rottier.

At the usual 33 percent contingency fee, a firm would receive over $116,000 in attorney’s fees for a $350,000 award, plus the $100,000 for the cost of employing experts and other costs.

"Based on Mr. Rottier’s testimony, I think it’s safe to say that without a cap, we’ll see the reverse," said Borgerding. "No cap means a better chance for attorneys to recover massive fees and, ultimately, more lawsuits being filed. That’s exactly what we are concerned about."

"We are often asked: ‘When will the loss of the caps have an impact?’ The answer is right now," reveals Wisconsin Hospital Association (WHA) President Steve Brenton. "Physician recruiters are now reporting that new physicians are starting to turn down offers to practice in Wisconsin communities, fearing that Wisconsin will soon turn into one of the medical liability crisis states physicians are either leaving or avoiding."

Kurt Mosely, a vice president with the MHA group, the largest physician recruitment agency in the country, said states with caps have about 16 percent more physicians per capita than those that don’t have caps.

"Wisconsin, along with every other part of the country, is already in the midst of a physician shortage that is only going to get worse as our population ages," Mosely said. "You need every advantage you can get when you are competing with 49 other states for physicians."

Mosely added that for states already in crisis, the only alternative is to hire temporary physicians through staffing agencies. "In crisis states, temporary doctors become a permanent solution because physicians won’t commit to a full-time, permanent practice."

Now, without the stability of the pain and suffering cap, Wisconsin communities are at a competitive disadvantage at the same time that physicians are hard to recruit and in short supply. Wisconsin hospitals are reporting that it is more difficult to recruit physicians to come to their communities. If this trend continues, it will be difficult to access medical care when it is needed.

Baraboo, Wisconsin, is a notable example of how the loss of the cap has placed additional challenges on rural hospitals. Sandy Anderson, president of St. Clare’s in Baraboo, told reporters on August 25, 2005, of the difficulty of recruiting new physicians to Baraboo after the Supreme Court decision. "I have interviewed two orthopedic surgeons and they asked me ’what is going to happen to our malpractice rates?’"

Anderson also told reporters her own personal story of the difficulty she had in finding a physician to deliver her twins when she lived in Ohio. Ohio is one of 20 states identified by the AMA as a medical liability crisis state.

Stevens Point’s Saint Michael’s Hospital, in central Wisconsin, is another example, according to Claudine Taub, RN, physician recruiter for Ministry Health Care – Central Region. "I had been working to recruit several family practice physicians in the state of Illinois to central Wisconsin, but soon after the Supreme Court decision, the physicians declined our invitation, citing the caps as a factor in their withdrawal," she explained.

"The loss of our ability to recruit new physicians to Wisconsin is the first shoe to drop," said Brad Neet, president of Saint Michael’s Hospital-Ministry Health Care in Stevens Point. During his six-year tenure at Saint Anthony’s Hospital in Illinois, Neet saw first-hand the negative impact of practicing in a state without damage caps, as doctors fled the state. "We are concerned that the next effect of the loss of the caps will be the reverse of the trend that brought physicians to Wisconsin - physicians will ‘escape from Wisconsin’ as they seek out a less hostile liability environment."

"The effect of the loss of the cap on excessive pain and suffering awards will continue to impact health care for patients, employers and other health care providers throughout the state," cautioned Brenton. "It is imperative that we find an equitable solution to this impending crisis." Brenton noted that just introduced legislation that is the result of the work of a special legislative Task Force represents such a solution.

This week hospital staff from across Wisconsin has already fired off nearly 200 letters, emails and calls to their State Representatives to urge support for medical liability legislation, Assembly Bill 766. The State Assembly will vote on AB 766 Tuesday, October 25.

Sue Snyder of Columbia St. Mary’s in Milwaukee was just one of those hundreds who personally contacted her legislator to make the case for restoring caps in Wisconsin….

I am a native of Rockford, Illinois. My parents still live there. Medical Liability in Illinois is driving physicians out of the state. The impact this has on the people of Rockford is that younger surgeons are either not choosing to begin practice there or they are leaving and coming to Wisconsin. There was an article in the Rockford Register Star in July stating that the youngest surgeon in Rockford is 47 years old. This does not bode well for that city.

The Rockford Register Star newspaper article referenced in Snyder’s email included even more examples of Illinois doctors fleeing to practice in Wisconsin.

"’I’m looking at the handwriting on the wall in this state,’ said Daly, a 43-year-old general surgeon who has practiced here [Rockford] for 11 years. ‘It will be intolerable for a physician here. General surgeons are bleeding out of the area.’ Daly is departing with thoracic surgeon Dr. William Sacksteder. They are headed to Wisconsin, where lawmakers, unlike their counterparts in Illinois, have passed caps on malpractice damage awards."

The irony of the article is that it was written prior to the Wisconsin Supreme Court decision overturning caps and prior to Illinois’ Democratic Legislature and Democratic Governor enacting caps into law this summer. The article goes on to say:

"’These (doctors) are leaving in the prime of their careers. This will mean the youngest general surgeon at Rockford Memorial will be 47 years old,’ said anesthesiologist John Keith, who worked with Daly and Sacksteder at Rockford Memorial. ‘It eventually will mean decreasing access to the general surgeons. They’re already overworked.’"

Kudos to Sue and the hundreds of you who contacted your legislators to let them know how important it is to make sure Wisconsin does not become like Illinois. Keep it up!

You still have time to make your voice heard before the October 25 vote. Simply log onto www.wha.org/speakUp/stateassembly.aspx to email your State Representative or www.wha.org/speakUp/emailLegislator.aspx for more information.

Contact Jenny Boese at jboese@wha.org with your grassroots stories so we can highlight the grassroots efforts of our hospitals on behalf of their communities and communities statewide.

The WHA Foundation has officially kicked off its first fundraising effort since 2001, announced Foundation Chair John Marnell, and the Foundation’s Board of Directors has set a goal to raise $500,000 over the next three years.

"The WHA Foundation Board is very excited about the opportunity to increase the base of support for the wonderful programs that we fund. The gifts we receive will make a difference in health care worker education and training, nurse leader identification, and support and recognition of community partnerships that improve health care in our state," Marnell said.

"The Foundation Board worked hard over the past four years to refocus its funding priorities on initiatives that have statewide impact on health care in Wisconsin, particularly in the areas of workforce development and quality and safety initiatives," said Foundation Director Jennifer Frank.

"For the first time since 2001, the Foundation is seeking the support of WHA members to help meet the strategic direction of the Foundation and WHA over the next several years."

Rep. Marlin Schneider (D-Wisconsin Rapids) introduced a bill (AB 779) late this week that would increase the cigarette tax by 20 cents with the proceeds going to increase reimbursement to Medicaid providers. For hospitals this would mean a $5 million increase in hospital outpatient reimbursement over the biennium. For the more than one-third of hospitals who operate nursing homes, there would also be a 1.4 percent increase to the nursing home reimbursement rate each year of the biennium. The bill also provides increases to pharmacy reimbursement rates.

Earlier this year, WHA fought for increasing the tobacco tax and using those funds to cover the cost of smoking-related illnesses to the Medicaid program through increases to provider reimbursement. In January, WHA and the Wisconsin Chapter of the American Cancer Society released a poll that revealed that the vast majority of Wisconsinites (77 percent) agree with the need to increase the tobacco tax and earmark it to pay for the state’s Medicaid program.

Despite the broad based support with voters across the political spectrum for increasing the tobacco tax, Governor Doyle and many legislative leaders disagreed. However, the Legislature ultimately agreed that funding Medicaid needed to be a priority and provided increased funding for the program without raising funds through a cigarette tax increase, which included payment increases to hospitals, nursing homes and pharmacists, but Governor Doyle vetoed these increases.

WHA’s Vice President Jodi Bloch explains that the perfect storm may be brewing for increasing the cigarette tax, "With the news this week that the state shifted money out of the statutory reserve calling into question whether the MA Trust Fund is truly balanced, we are left with a mere $13.7 million to cover any unexpected expenses or new programs, which means that Governor Doyle and the Legislature should take a serious look at proposals like Rep. Schneider’s to increase the cigarette tax and earmark it for Medicaid."

For more information about this or any other legislative proposal, contact WHA’s Jodi Bloch at 608-274-1820.

Partisan politics will be a factor in determining the ultimate fate of legislation designed to restore medical malpractice non-economic damage limits. And while expected, that’s unfortunate because it means the much-needed initiative will be debated around soundbites as opposed to rational discussion. And rational discussion is necessary to achieve an endgame that features restoration of a meaningful damage cap.

Significant partisanship erupted earlier this week at a legislative hearing called to take testimony on three bills that are the outcome of a special Assembly Task Force on Medical Malpractice Reform. At that hearing, Democrat lawmakers called the legislative process "a sham" and questioned Republican leadership motives associated with scheduling the hearing. Their theme seemed to be—"what’s the hurry?" and "who’s really in charge?" That latter rhetorical question was focused on the argument that the medical community is calling the shots on legislative timing and strategy.

Other arguments made by Assembly Democrats included the notion that the July Supreme Court decision will not lead to a physician shortage because we already have one. That kind of logic is hard to argue with a straight face, but represents what can be expected over the coming days and weeks. Assembly Democrats also cited the recent Government Accounting Office (GAO) report and tried to make the case that somehow physician prices/charges should be part of the larger discussion. That’s like suggesting that plaintiff’s bar "greed" should be part of the debate. These red herrings may be emotionally satisfying to the partisans generating them but create real impediments to passing needed legislation.

It doesn’t have to be this way. We only need to look south to Illinois where bi-partisan tort reform legislation, including non-economic damage caps, passed the Illinois Legislature earlier this year. And that bill was signed into law by a Democrat governor who made the case that the initiative will improve access to patient care by fostering a more physician-friendly state environment. Right now, we’re a long way from having that kind of wisdom prevail in a bi-partisan manner in Madison. And it very well may get worse over the coming weeks.

So what’s to be done? WHA will continue to advance our strong case for a meaningful non-economic damage cap as a necessary foundation for a favorable Badger State malpractice environment. And as an organization, we should also be prepared to be a moderating influence in achieving that goal.

Steve Brenton
President

The WHA Board of Directors at its October 20 meeting unanimously approved a set of strategic initiatives WHA will pursue in the coming year. The initiatives were developed by the Board at its strategic planning retreat in July. Those include: evolution of CheckPoint^SM; evolution of PricePoint; community benefits reporting; adverse events reporting; information technology investment; and medical liability as the #1 short-term priority. WHA President Steve Brenton said, "These doables become part of WHA’s goals and objectives for the coming year."

Senior VP Eric Borgerding provided Board members with a comprehensive update on both Medicaid and medical liability legislation. Borgerding noted how far Medicaid has jumped up in the priority list of the Legislature. The Legislature showed just how much of a priority Medicaid had become when it attempted to override the Governor’s vetoes on both nursing homes and outpatient reimbursement rates increase.

"What we saw with respect to funding increases was Republicans and Democrats fighting to help the nursing homes," said Borgerding. "The will is there to restore nursing home funding but the question is, where will the money come from?" Steve Brenton noted that over one-third of Wisconsin hospitals own nursing homes. "We are committed to the partnership we’ve developed with the nursing homes and to enhancing that partnership in the future."

In a related issue, the Board unanimously approved revisions to WHA’s Medicaid Task Force charge in order to allow the Task Force to appropriately advance WHA’s overall agenda in the future.

In turning to medical liability legislation, Borgerding provided a chronological review of the issue’s development since the Supreme Court’s July decision to overturn the cap. Since July, Wisconsin has had "Supreme chaos," said Borgerding. "We were seeing the negative impact on physician recruiting two weeks after the decision was handed down."

Borgerding highlighted the work of the Speaker’s Task Force, which included David Olson, CEO of Bay Area Medical Center, and Ralph Topinka, chief legal counsel at Mercy System. He also provided a review of WHA’s initiatives on the issue, including multiple press conferences and aggressive legislative and grassroots advocacy.

Borgerding noted that just this week the Assembly Insurance Committee approved the legislation, Assembly Bill 766, restoring a cap. The full Assembly will vote on the measure Tuesday, October 25.

Senior VP George Quinn provided an overview of the WHA budget. "The budget was developed through a dual process, including input from WHA departments as well as reflecting the overall organizational priorities," said Quinn. Priorities and themes for 2005 have been medical liability, Medicaid payments and continued leadership on transparency issues. For 2006, Quinn noted that both revenues and expenses would increase approximately 7 percent. Of note, Quinn reported that members’ dues would rise by 3 percent.

Dr. Shabino provided an updated on the Wisconsin Hospitals PAC and Conduit campaign, which exceeded the $175,000 goal it had set. "For a frame of reference, in 2001, $60,000 was raised. In 2005 it’s $175,000…This is because of the willingness of members to see the importance of political advocacy," said Dr. Shabino.

VP of Quality Dana Richardson provided the Board updates on both the Council on Medical & Professional Affairs and the Quality Steering Committee. She noted WHA interest in Minnesota’s adverse events system, which was a subject at the recent Quality & Safety Forum held in Appleton. Richardson also provided a brief update on the recent release of the employer toolkit for CheckPoint. "CheckPoint has an outreach committee that is looking at finding pathways into employers and others. The Toolkit is just one example of their work. It was released last week as one way employers can encourage employees to use the CheckPoint initiative," Richardson said.

VP of Education Jennifer Frank updated the Board of the WHA Foundation’s fundraising campaign. The goal is to raise $500,000 by 2008.

WHA has requested that the Wisconsin Department of Health and Family Services Bureau of Quality Assurance (BQA) reconsider its recently issued statewide variance of Chapter 124 concerning the authentication of physician orders.

The new variance as issued by BQA does not provide the flexibility recognized as necessary by the Center for Medicare and Medicaid Services (CMS) in the federal Interpretive Guidelines for 42 CFR §482.23(c)(2). The state variance that "[a]ll verbal and telephone orders shall be authenticated by the prescribing member of the medical staff in writing within 48 hours of receipt," does not take into account those situations in which the prescribing member of the medical staff cannot authenticate a verbal or telephone order within 48 hours. The CMS standard permits a covering physician to authenticate an order and assume full responsibility for his or her colleague’s order, thus providing safeguards for patient safety and flexibility to make the standard workable.

WHA requested that BQA amend the new statewide variance to make the state standard consistent with the federal standard and provide the flexibility recognized as necessary by CMS. A copy of the letter from WHA to BQA is available on the WHA Web site.

Only a year ago, the Fox Valley Health Care Alliance (FVHCA) was created with the goal of ensuring an adequate supply of high quality health care workers in the region by working collaboratively with all stakeholders. On October 19, the Alliance invited those stakeholders to a meeting to hear about the group and its projects. Members of the Alliance reported on initiatives that include:

• A speaker’s bureau for schools or groups on health care careers
• A standardized process for requesting the opportunity to job shadow a health professional in any of the area hospitals
• A grant proposal to create an on-line system for health occupation programs to request and schedule hospital-based clinical experiences for their students
• A survey of health care workers on retirement intentions and employers on expected job openings which will help the area health care education programs plan to meet projected demand
• A web site with information on careers, links to other helpful sites and a place for organizations to post invitations to upcoming health care workforce events

Department of Workforce Development Secretary Roberta Gassman addressed the stakeholder group and congratulated the group and its sponsor, the Fox Valley Workforce Development Board, on its collaborative and proactive strategies for addressing the workforce shortage in health care.

The Wisconsin Hospital Association has been participating in the Alliance. "Two things make this group unique," says Judy Warmuth, vice president, workforce development of WHA, "The collaboration of education and health care providers at a regional level, and the creative solutions." Warmuth notes that projects such as the survey to predict retirements and forecast occupational needs could be a model for the state.

There is still time to register for the November 3 seminar, "Best Practices for HR Departments: Improving the Quality of Your HR Department." WHA and the Wisconsin Society of Healthcare Human Resources Administration (WSHHRA) are co-sponsoring this second annual seminar focused on best practices for health care human resources departments.

This year’s program will be held at the Kalahari Resort in Wisconsin Dells, and the day’s agenda includes an interactive presentation focused on the American Society for Healthcare Human Resource Administration’s (ASHHRA) HR self-assessment tool. Additional sessions will focus on a variety of HR best practices from around the state and will include a look at using online performance appraisal, implementing a talent management program, and using a predictive index process.

A seminar brochure and registration materials are included in this week’s packet, and easy, on-line registration is available at www.wha.org. For more information on registration, contact Sherry Rabuck at srabuck@wha.org or at 608-274-1820.

A Groundbreaking Ceremony for Black River (Falls) Memorial Hospital’s $20 million expansion and remodeling project was held October 17 on the East Lawn of the hospital. Hospital board members and staff, community leaders, medical staff, local legislators and community members celebrated what was described as "the largest expansion and remodeling project in the 37-year history of the hospital. The construction project will affect every hospital department and add approximately 55,000 sq. ft. of new space to the hospital.

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