Vested Interest - News and Notes - November 2004 Issue

Lead Levels in Water Misrepresented Across U.S.

Cities across the country are manipulating the results of tests used to detect lead in water, violating federal law and putting millions of Americans at risk of drinking more of the contaminant than their suppliers are reporting. Some cities, including Philadelphia and Boston, have thrown out tests that show high readings or have avoided testing homes most likely to have lead, records show. In New York City, the nation’s largest water provider has for the past three years assured its 9.3 million customers that its water was safe because the lead content fell below federal limits. But the city has withheld from regulators hundreds of test results that would have raised lead levels above the safety standard in two of those years, according to records. The result is that communities large and small may have a false sense of security about the quality of their water and that utilities can avoid spending money to correct the problem. In some cases, state regulators have helped the utilities avoid costly fixes. The U.S. EPA, which is supposed to ensure that states are monitoring utilities, has also let communities ignore requirements to reduce lead. In 2003, records show, the EPA ordered utilities to remedy violations in just 14 cases, less than one-tenth of the number ordered in 1997. (ATLA Law News Digest – October 7, 2004)

Business Insurance Premiums Drop; Good News For Everyone But Insurers

Business insurers are learning a hard math lesson: Four hurricanes plus three years of rate increases do not add up to more rate increases. Insurance brokers are asking for premium cuts - and getting them. In the second quarter of this year, 81 percent of commercial property policies renewed for less, and 31 percent of commercial auto policies dropped, according to the Insurance Information Institute, a trade group. Rate increases peaked in mid-2003, and now many insurers are actually cutting rates to keep business. Premiums for commercial property dropped 8.8 percent in the last quarter of 2003, and have dropped slightly during the first two quarters of this year, too, according to Advisen Ltd., which polls insurance purchasers. (ATLA Law News Digest – October 7, 2004)

Colorado Doctors Seeing Higher Malpractice Rates

The biggest medical malpractice insurer in Colorado said it is preparing for its largest rate increase in 16 years: a 15.9 percent rate hike. Physicians will pay an average $15,500 next year. The company blamed steeper jury awards, settlements and legal costs. It also cited legislation that raised the cap on "pain and suffering" awards to $300,000 from $250,000 in 2003. The rate increase comes despite efforts by the Legislature to cap damage awards. The Health Care Availability Act of 1988 limited total awards to $1 million per patient. (Insurance Journal – October 8, 2004)

Insurers Continue to Price-Gouge Doctors

Americans for Insurance Reform announced the release of a comprehensive new study of medical malpractice insurance around the country, based on the insurance industry’s own data. Contrary to what the insurance and medical lobbies have alleged, the years 2002 and 2003 saw no "explosion" in medical malpractice insurer payouts to justify skyrocketing rate hikes. In fact, rather than exploding, inflation-adjusted payouts per doctor have dropped for the last two years. Payouts (in constant dollars) have been essentially flat or dropping since the mid-1980s. Second, medical malpractice insurance premiums rose much faster in 2002 and 2003 than was justified by insurance payouts. These price hikes were not connected to actual payouts, jury verdicts or the legal system. Rather, they reflect dropping interest rates and losses experienced by the insurance industry’s market investments. (AIR press release – October 12, 2004)

Madison County Finds Windfall From Bond Interest

This year’s final payment to Madison County from the Philip Morris case arrived with good news: a slightly higher interest rate bumped the fourth quarter amount to $831,441, $131,000 more than expected. At a county finance committee meeting, officials were told that the county’s take since the account was established last year totals $1.7 million. The county gets 20 percent of the interest earned on a $6 billion bond that Philip Morris had to put up while it appeals a $10.1 billion verdict against it in a class action lawsuit. Even if the courts side with Philip Morris on appeal, Madison County will be allowed to keep the interest money it has collected to that date. (Edwardsville Intelligencer – October 19, 2004)

American Family Voices to Air New Medical Malpractice Ad

American Family Voices, a national advocacy and education group that fights on behalf of middle class and low income families, released a new television spot demonstrating that preventable medical errors - not lawyers - are the real issue in the debate over medical malpractice. The group also warned that backers of the lawyer attack ads are pushing for limits on medical malpractice awards that will hurt those who are most vulnerable in America, such as low-income women, stay-at-home moms, the elderly and children who have been hurt by medical malpractice. The new ad features Linda McDougal, a Wisconsin woman who underwent a double mastectomy and only later learned that the slide showing cancerous tissue belonged to another woman. The ad can be viewed at: http://www.americanfamilyvoices.org. (ATLA Law News Digest – October 21, 2004)

Drug for Rheumatoid Arthritis May Increase Risk for Blood Cancer

Johnson & Johnson is warning doctors that patients taking its rheumatoid arthritis drug Remicade may have a higher risk of lymphoma, a blood cancer. The warning will be added to the drug’s package insert and means the drug’s safety profile will more closely match that of rival drugs in the same class, Amgen Inc.’s Enbrel and Abbott Laboratories Inc.’s Humira. The label will warn of a threefold increase in the risk for rheumatoid arthritis patients taking the drug compared with the normal population. (ATLA Law News Digest – October 14, 2004)

Shorter Rehab Stays May Put Patients in Danger

In the latest suggestion that cutting healthcare costs can be hazardous to one’s health, discharging patients quicker from rehabilitation hospitals may put them at greater risk of dying earlier, according to local researchers. The study found that from 1994 to 2001 the average in-hospital stay of patients rehabilitating from strokes, broken bones and other disabling conditions dropped 40 percent while the death rate rose nearly 4 percent. (ATLA Law News Digest - October 14, 2004)

Steroids for Head Injuries May Be Risky

Giving steroids to head-injury patients not only fails to improve their chances of survival but actually appears to increase their risk of dying, a large international study has found. Based on the findings, the researchers who conducted the study and other experts urged doctors against routinely using steroids for victims of head trauma. "There are guidelines that say people shouldn’t use steroids, but in practice a lot of people use steroids," said Ian Roberts of the London School of Hygiene & Tropical Medicine, who led the study being published in the Lancet. "This is a widely used treatment of uncertain effectiveness, and a large trial has shown it to be ineffective and possibly harmful." (ATLA Law News Digest – October 14, 2004)

Nation’s Largest Med Mal Insurer Declares Caps on Damages Don’t Work

The nation’s largest medical malpractice insurer, GE Medical Protective, has admitted that medical malpractice caps on damage awards and other limitations on recoveries for injured patients will not lower physicians’ premiums. The insurers’ revelation was made to the Texas Department of Insurance in a regulatory filing obtained by FTCR. The revelation was contained in a document submitted by GE Medical Protective to explain why the insurer planned to raise physicians’ premiums 19 percent a mere six months after Texas enacted caps on medical malpractice awards. According to the Medical Protective filing: "Non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1.0 percent." The company also notes that a provision in the Texas law allowing for periodic payments of awards would provide a savings of only 1.1 percent. (FTCR press release – October 26, 2004)

Sleep Deprived Interns Make More Errors

A new Harvard study has found that sleep-deprived doctors-in-training made one-third more serious mistakes during typically long shifts than they did during "short" 16-hour ones. First year interns were wired up with electrodes to measure how often their sleepy eyes rolled, and they ended up nodding off more than five times a night during long shifts. The findings were the first to measure the real-life toll that sleep deprivation takes on interns’ medical judgment. The findings suggest that recently imposed limits on how many hours new doctors can work do not go far enough. The results were reported in the New England Journal of Medicine. (USA Today – October 28, 2004)