The Journal of The DuPage County Bar Association

Back Issues > Vol. 24 (2011-12)

Lebron v. Gottlieb Memorial Hospital: Victory for Victims of Medical Malpractice or Setback for Healthcare Reform?
by Shannon Barnaby

The road for tort reform in Illinois has been a long and winding path over the past thirty years. Along every twist and turn the debate has been hotly contested, especially when discussing medical malpractice liability. With the Illinois Supreme Court’s seminal decision in Lebron v. Gottlieb Memorial Hospital[1] many pundits are ringing the death toll for healthcare reform in Illinois[2] but what does that really mean for the citizens of Illinois? Is this fork in the road a green light for abusive plaintiffs’ claims and an increase in doctors practicing defensive medicine or merely an open road ahead for injured plaintiffs to obtain the redress of the courts? In more closely analyzing the facts and decision of the Lebron case, it is clear that the Lebron decision was not only a victory for victims but was also the right decision for Illinois citizens because the empirical evidence has shown that caps on damages do not advance the goals the legislature had intended.

Lebron v. Gottlieb Memorial Hostpital.
In November 2006, Frances Lebron gave birth to Abigaile Lebron by Caesarean section at Gottlieb Memorial Hospital.[3] Allegedly the doctors and nurses who delivered Abigaile made numerous errors causing permanent injuries including: “severe brain injury, cerebral palsy, cognitive mental impairment, inability to feed normally such that she must be fed by a gastronomy tube, and inability to develop normal neurological function.”[4] Abigaile’s mother, individually and on behalf of Abigaile (as a minor), brought a medical malpractice claim against Gottlieb Memorial Hospital, the doctor and nurse who delivered Abigaile.[5]  The complaint sought a declaration that the caps on damages, as applicable to their cause of action, were in violation of the Illinois Constitution.[6]

On November 13, 2007, the Circuit Court of Cook County pronounced that the non-economic damages cap, in the 2004 Act, was unconstitutional both on its face and as it applied to the plaintiffs because it functioned as a legislative remittitur in violation of the separation of powers clause of the Illinois Constitution.[7] The Illinois Supreme Court considered a number of amicus curiae briefs from both sides of the tort reform debate on appeal.[8] 

Ultimately, the Illinois Supreme Court held that the caps on non-economic damages were unconstitutional.[9] In deciding Lebron, the Illinois Supreme Court relied heavily on its previous holding in Best v. Taylor Machine Works that the statutory caps (from a similar 1995 Act) were in effect a “legislative remittitur,” and in both cases it held that the limitations on non-economic damages violated the separation of powers clause of the Illinois Constitution by intruding upon the intrinsic and fundamental power of the judiciary to decide if damages are excessive.[10] The Court rejected the defendants’ argument that Best was not controlling because the General Assembly narrowly tailored the legislation to address the specific issue of the health-care crisis.[11] 

In addition, the Lebron court rejected the assertion that the caps on damages was within the General Assembly’s legitimate civil-procedure lawmaking power because nineteen other states throughout the country had adopted a range of caps on damages, and in the eight states where damage caps had been attacked based on similar separation-of-powers arguments, the legislation had been sustained.[12] The Court scoffed at this assertion declaring, “‘everybody is doing it is hardly a litmus test for the constitutionality of the statute.”[13] After this formidable ruling it seems impossible to imagine a situation in which the General Assembly could pass legislation with caps on damages that could survive judicial scrutiny, absent a constitutional amendment, which is unlikely to happen.[14] Therefore, it is likely any future tort reform, at the state level, at least, will not include a limitation on damages.[15] 

Final Victory for Victims or Setback for Healthcare Reform? In the aftermath of Lebron what does the future hold for the citizens of Illinois? Will there be a shortage of doctors due to the “health-care crisis”? If so, is medical malpractice litigation really to blame? Rhetoric, political jockeying, association participation and bar membership aside, the empirical evidence has consistently shown over the years that – while it is undisputed that doctors’ liability insurance premiums have increased considerably – the connection to the tort system (for the increase) cannot be supported.[16] Further, in states that have enacted caps on non-economic damages, evidence has shown that doctors’ liability insurance premiums have not decreased and in some instances have continued to increase.[17] Lastly, the empirical evidence also does not support the assertion that the State of Illinois, and in particular rural Illinois, is losing doctors.[18] Accordingly, in analyzing the foregoing evidence, it becomes clear that the Lebron decision was a victory for victims of malpractice.

Tort System Not The Cause of Medical Malpractice Insurance Premiums Increases. There is no dispute that medical liability insurance premiums for some Illinois doctors rose considerably as they did elsewhere, over the past three decades.[19] However, the cause is intensely contested. The insurance industry, among others, places the culpability on an increase in medical malpractice litigation and in excessive jury awards.[20] As a panacea response, the legislature in Illinois, as in many other states, has accepted this argument largely from anecdotal evidence, which were in many cases oversimplifications of reality.[21] 

In an exceedingly comprehensive and detailed study of medical malpractice by Duke law professor Neil Vidmar entitled, “Medical Malpractice and the Tort System in Illinois” empirical evidence was collected regarding the degree in which medical malpractice lawsuits may have increased, and whether there were a significant number of large jury verdicts for plaintiffs between the years of 1993 and 2004.[22]

In the executive summary, the study reports the chief conclusions as:

1. For Cook and DuPage counties: the data shows no upward trends in [medical malpractice] filings per 100 treating physicians from 1994 through 2004, when adjusted for population growth…

2. A similar analysis in Madison and St. Clair counties reveals the following: [o]ver a 14-year period from 1992 through the first part of 2005, only 11 jury verdicts favoring the plaintiff in medical malpractice cases were found in Madison and St. Clair county courts. Only two verdicts exceeded $1 million.

Professor Vidmar’s study was based on varied sources including: jury verdict reporters, databases on verdicts, Bureau of Justice Statistics of the U.S. Department of Justice, and the American Medical Association’s annual report, Physician Characteristics and Distribution in the U.S.[23] Unfortunately, he was unable to garner information regarding the regularity and size of settlements of closed medical malpractice litigation claim files because the Illinois Department of Insurance would not release the information.[24]

Ultimately, his analysis of all the data showed that “[t]he Illinois tort system does not appear to be the cause of the undisputed fact that doctors’ liability insurance premiums showed dramatic rises. It is time to consider other causes of the insurance premium increase.”[25] Further, on the subject of caps on non-economic damages, his analysis found that the $500,000 cap would have little consequence on payouts to plaintiffs in general and would likely have no influence on doctors’ liability insurance premiums; however, the cap would result in a substantial reduction in compensation for plaintiffs who were injured most severely by medical negligence.[26]

 Effects on States with Caps on Damages. One study analyzed the differences between the health care costs and accessibility in Indiana, which has a cap on total damages, and in Illinois, which does not now (nor did it at the time of the study), have a cap on damages. That study found that Indiana’s capability to offer health care to rural residents was not noticeably different than Illinois’.[27] Further, expansion in high-risk specialty physician areas such as obstetrical and gynecologists followed parallel patterns in both states.[28] Finally, the article found that Indianans actually spent more on physician service per capita then Illinoisans.  In fact, as a “percentage of household income, health care costs grew twice as fast in Indiana as in Illinois.[29] In short, the study concludes that the caps on damages in Indiana has had no benefit on consumers or healthcare providers.  Instead, Indiana’s medical malpractice insurance companies have retained the savings as profits.[30]

Some experts have argued that the true reason for the increase in physicians’ premiums is related to the insurance market cycle.[31] Insurance companies generally do not base premium prices on claim payouts.[32] Like other insurance companies, medical malpractice liability companies invest the premiums that they receive in bonds and other financial instruments.[33] It is the return from those investments, not premiums paid by physicians, that creates most of the profits for the insurance industry.[34] Therefore, if investment income remains highs, insurance companies can sustain substantial losses and still be profitable without increasing premiums dramatically. Conversely, when investment income is low, insurers may not operate profitably even when malpractice claim payouts remain stable, which leads to increasing premiums to maintain profitability.[35] Some experts have argued that this “pattern occurred prior to each insurance premium ‘crisis’ experienced in this country”[36] Further, bond earnings, which make up 80% of insurers’ investment profits, have steadily declined since 1995.[37] As a result, one can see how caps on damages would limit the amount that the insurance company would payout; however, it would not address the problematic insurance market cycle at the heart of the issue.[38]

Doctors are Not Leaving Illinois Due to Increase in Premiums. One of the chief concerns often touted by proponents of tort reform, and even adopted by the Illinois General Assembly’s findings and purposes of Public Act 89-7[39] had been that doctors are leaving the state of Illinois to practice in neighboring states or leaving the practice altogether.  The data does not bear this out.[40] 

In Professor Vidmar’s study on medical malpractice he researched whether doctors were truly leaving the state of Illinois due to the risk of increase in premiums between the years of 1993 and 2003.[41] What he found was that there was a steady increase in the total number of physicians since 1993, even in the fields of obstetrics-gynecology and neurological surgery, and even when adjusted for Illinois population growth ratio.[42] According to data from the American Medical Association statistics, Professor Vidmar found that doctors were not choosing to retire early or leave the state of Illinois.[43]

Changes in Tort Law: Doctors’ Perspective.
Thus far, legislative attempts to reform tort laws have been dominated by the doctors’ perspective.  From the doctors’ perspective the principal goal of tort reform is to lower insurance premiums. In theory, caps on damages should have helped advance the doctors’ goal but as the empirical evidence has shown that is not the case. Also, the furtherance of the doctors’ objective comes largely at the expense of the injured victim.  Further, the issue of caps on damages is now dead in the water in Illinois. So what can be done to reform tort law to help doctors achieve their main goal and not place the burden of their objectives on patients injured by malpractice?

As was previously discussed, many experts believe the true cause for the dramatic increase in physicians’ liability insurance is due to the insurance
market cycle.[44] Therefore, it would only make sense to have more stringent state regulation on insurance practices in order to bring stability to rate setting practices. In fact the state of California, a state with caps on damages since 1975, did not see a stabilization in physicians liability premiums until it passed Proposition 103, in 1988.[45] Proposition 103 requires insurance companies to get approval from the state insurance department before adjusting any premium rates; this restrains companies from improperly lowering rates to increase their market share and restrains them from increasing rates dramatically.[46]     

In fact, the now void 2004 Act contained beneficial changes to the Illinois Insurance Code that should be promptly reenacted. For example, the 2004 Act reduced the standard of proof needed for finding that premium rates were unreasonable;[47] “required more detailed loss, actuarial and reserve fillings” and required that this information be made available to the general public.[48] Further, the 2004 Act transferred authority over the rates and rating schedule for medical liability insurance from the Director of Insurance to the Secretary of Financial and Professional Regulation, a branch of Illinois government that oversees over one million professionals in 100 different industries, including the state’s financial institutions.[49] 

In the end, if the Illinois legislature wants to reform
tort law to help physicians achieve their main goal of lowering insurance premiums, it should focus less on taking away from the victim and focus more on creating more stringent insurance regulations. 

Changes in Tort Law: Patient’s Perspective. The other side of the tort reform debate that has gotten much less attention from the legislature is that of the injured victim. Tort law has several crucial goals that are important to the discussion of medical malpractice in particular. These goals are deterring negligence, and thus injury, and compensating injured victims once an injury has occurred.[50] Other important tort goals, which are important to preserving a civil society, are corrective justice, administering justice, and providing a means in which victims may air their grievances in a safe manner.[51] 
           
Yet, the current tort system does not seem to be meeting its objectives for the patient either, but not for the reasons commonly thought.  The problem seems to be that evidence shows current tort law is not the most effective way to deter medical injuries.[52] From the patients’ perspective, changes in tort law should be made to improve patient safety. 
           
Although the reasons for this is unclear and are no doubt more complex than this short article can address, there is a very real problem in the United States of preventable medical errors. In 1999, the Institute of Medicine released a study titled “To Err is Human” in which the report found between 44,000 and 98,000 patient deaths per year in United States hospitals were due to preventable medical errors.[53] Since this report, medical schools and teaching hospitals realized that patient safety “requires more than a brief course in an already crowded medical school curriculum.”[54]

More attention should also be placed on the quality and safety of patient care by the Illinois General Assembly to reduce incidents of medical errors.  The healthcare industry should implement a set of “best practices” procedures to offset human frailties that the General Assembly should regulate and control due to the public interest in patient safety.[55] Such measures could include requiring higher staffing ratios, and fewer work hours.[56] In addition, measures should contain procedures to avoid relying on the memory of employees by using checklists and automated protocols, or shortening processes by reducing the number of employees that receive important documents.[57]  In 2007, The World Health Organization introduced the “Safe Surgery Saves Lives” campaign, which featured a two-minute checklist to assist with teamwork and help ensure the use of safety procedures within the operating staff.[58] Studies have shown that when this checklist is used, it can both enhance patient safety and save money for hospitals.[59]

Such measures, albeit taken voluntarily, have been found to be successful in at least one subset of physicians.[60] The American Society of Anesthesiologists, confronted with high mortality rates, created a system which featured: mandated patient monitoring standards, shorter working hours for residents, a revamping of their equipment and procedures to reduce the regularity and severity of errors, and made the operation of their machines standard.[61] In about a decade, these measures decreased the mortality rate from 1 in 10,000 to 20,000 to1 in 200,000.[62] Further, clear industry standards could help shield doctors from liability because the standard of care is a professional standard that an expert witness could testify to what most doctors are doing in a medical malpractice suit. 

 Conclusion. Tort reform, especially medical malpractice reform, has had a long and tumultuous journey. Unfortunately, along the way much of the rhetoric and anecdotal politicized, and jockeying was accepted at face value by the legislature, and knee-jerk legislation was passed that did not properly address the problems with the tort system. Instead of focusing on reducing malpractice, reform in past has focused on reducing liability for malpractice. As this article has shown, the legislature should attempt to create more stringent insurance regulations, and should focus more on patient safety to reduce preventable medical errors, which would benefit both doctors and patients.  However, only time will tell what the General Assembly will decide to do with future tort reform. For the time being, the empirical evidence supports the decision that the holding in Lebron was a victory for victims within Illinois.   

[1] Lebron v. Gottlieb Memorial Hospital, 237 Ill.2d 217, 930 N.E.2d 895 (2010).  
[2] See, e.g., Kevin Sack, Illinois Court Overturns Malpractice Statute, Chi. Trib., Feb. 4, 2010, at A13; David M. Goldhaber & David J. Grycz, Illinois Supreme Court Invalidates Damage Cap: Three Strikes and You’re Out, 24 Chi. Bar Assoc. 30 (2010).
[3] Lebron v. Gottlieb Memorial Hospital, 237 Ill.2d 217, 930 N.E.2d 895, 899 (2010).  
[4] Id. at 900.  
[5]Id.  
[6] Id. Plaintiffs alleged the caps on non-economic damages violated the separation of powers clause of the Illinois Constitution (Ill. Const. art. II, §1) by allowing the General Assembly to replace the judiciary’s authority in deciding if a remittitur is suitable on a case-by-case basis. Id. Further, the plaintiffs argued the caps on non-economic damages equated special legislation in violation of the Illinois Constitution (Ill. Const. art. I, §13), violated Abigaile’s right to a trial by jury (Ill. Const. art. III, §13), due process (Ill. Const. art. I, §2), equal protection (Ill. Const. art. I, §2), and a certain and complete remedy (Ill. Const. art. I, §12). Id.  
[7]Lebron, 930 N.E.2d at 388 (“A statute is facially invalid only if no set of circumstances exists under which the statute would be valid”).  
[8] Lebron, 930 N.E.2d at 387; see also Goldhaber, supra note 2, at 33.  
[9] Lebron, 930 N.E.2d at 400. The Lebron Court did reverse the circuit court’s judgment in regard to the Act being unconstitutional as applied to plaintiffs. The Court stated both that a ruling of facially invalid “negates any notion that statute could be validly applied to theses plaintiffs” so the “as applied” was unnecessary and that because no evidentiary hearings and no hearings or finding of fact were held the constitutional challenge must be facial. Id.  
[10] See Id. at 400; see also Jeffrey A. Parness, Judicial vs. Legislative Authority After Lebron, 98 Ill. B.J. 324 (2010) (discussing the Lebron courts reliance on the Best decision).  
[11] Lebron, 930 N.E.2d at 393; see also Goldhaber, supra note 2, at 33.  
[12] Id. at 399-400.  
[13] Id. at 400.  
[14] See Goldhaber, supra note 2, at 34.  
[15] See Goldhaber, supra note 2, at 34.  
[16] See, e.g., Geoffrey Christopher Rapp, Doctors, Duties, Death and Data: A Critical Review of the Empirical Literature on Medical Malpractice and Tort Reform, 26 niu l. rev. 439 (2006) (discussing numerous empirical studies throughout the nation that indicate there is not a contention between the tort system and an increase in liability premiums.  
[17] See Vasanthakumar N. Bhat, Medical Malpractice 109 (2001) (discussing his findings that caps on non-economic damages do not lower premiums in any significant way); see also Martin D. Weiss, Melissa Gannon & Stephanie Eakins, Medical Malpractice Caps: The Impact of Non-Economic Damage Caps on Physician Premiums, Claims Payout Levels, and Availability of Coverage 7 (2003), available at http://www.thestreetratings.com/MedicalMalpractice.pdf. 
[18] Neil Vidmar & Russell M. Robinson II, Medical Malpractice and the Tort System in Illinois: A Report to the Illinois State Bar Association 73-82 (2005).
[19] Id. at 1 (showing an increase in one Illinois obstetrician-gynecologist malpractice liability insurance from $138,031 in 2003 to $230,428 in 2004). 
[20] Id.  
[21] See, e.g., Frank A. Sloan & Lindsey M. Chepke, Medical Malpractice 52 (2008) 62-65; Vidmar, supra note 18, at 20-2.
[22] Neil Vidmar & Russell M. Robinson II, Medical Malpractice and the Tort System in Illinois: A Report to the Illinois State Bar Association (2005).
[23] Id. at 4.
[24] Id. at 15.  
[25] Id. at i-ii.
[26] Id. at ii.
[27] Ian Barney, Medical Malpractice Reform: A Silver Bullet for the Health Care Crisis?, 15 Pub Int. L. Rep. 1 (2009).
 [28]  Id.
[29]  Id. at 147-48.
[30] Id. at 150-51.
[31] See, e.g., Douglas A. Kysar, Thomas O. McGarity & Karen Sokol, Medical Malpractice Myths and Realities: Why an Insurance Crisis is Not a Lawsuit Crisis, 39 Loy. L.A. L. Rev. 785, 796 (2006).  
[32] Id. at 798.
[33] Id.
[34] Id.
[35] Id
[36] Id.
[37] See Geoffrey Christopher Rapp, Doctors, Duties, Death and Data: A Critical Review of the Empirical Literature on Medical Malpractice and Tort Reform, 26 niu l. rev. 439, 514 (2006).
[38] See id.  
[39] See Tom Baker, The Medical Malpractice Myth 10, 140 (2005) (“doctors have been complaining for over 150 years that malpractice lawsuits are driving them from their practices.); see also 1995 Ill. Laws 89-7 (findings and purposes).
[40] See, e.g., Vidmar, supra note 18, at 84.
[41] Id. at 73-82.
[42] Id. at 77.
[43] Vidmar, supra note 18, at 84; see also Baker, supra note 39, at 141 (“shortages of doctors do exist, but they come from rapid population growth in some parts of the country…In the middle of highly politicized insurance crisis, some doctors place the label … ‘increased malpractice insurance premiums’ on their decisions, … But in the big picture, access to medical care continues much the same regardless of lawsuits or doctors’ insurance premiums.”); Sloan, supra note 21, at 62 (discussing the fact that the supply of physicians in the United States is more than sufficient and in some fields, especially surgery, is in excess).
[44] See Douglas A. Kysar, Thomas O. McGarity & Karen Sokol, Medical Malpractice Myths and Realities: Why an Insurance Crisis is Not a Lawsuit Crisis, 39 Loy. L.A. L. Rev. 785, 796 (2006)
[45]  Id.
[46]  Id.
[47] 215 ill. comp. stat. 5/155.18(c)(5)(West 2005); see also Goldhaber, supra note 2, at 30.  
[48] 215 ill. comp. stat. 5/155.18(c)(5)(West 2005); see also Goldhaber, supra note 2, at 30.
[49] See Ill. Dep’t of Fin. Services, available at http://www.idfpr.com/ (last visited Nov. 15, 2010).
[50] See Dan B. Dobbs, The Law of Torts §§ 8-11 & §13 in Torts and Compensation (Fifth ed. 2005).
[51] Id.
[52] See Sloan, supra note 21, at 23.
[53] Kohn LT et al, To Err is Human: Building a Safer Health System. Wash. Nat’l Acad. Press (2000).
[54] Darrell G. Kirch & Phillip G. Boysen, Changing the Culture in Medical Education to Teach Patient Safety, 29 Health Aff. 1600  (2010).
[55]  Id.
[56]  Id.
[57]  Id.  
[58] Marcus E. Semel et al, Adopting a Surgical Safety Checklist Could Save Money and Improve the Quality of Care in U.S. Hospitals, 29 Health Aff. 1593  (2010);see also Darrell G. Kirch & Phillip G. Boysen, Changing the Culture in Medical Education to Teach Patient Safety, 29 Health Aff. 1600 (2010).
[59] See Marcus E. Semel et al, Adopting a Surgical Safety Checklist Could Save Money and Improve the Quality of Care in U.S. Hospitals, 29 Health Aff. 1593  (2010).
[60]  See Sloan, supra note 21, at 208.
[61] Id.
[62] See id. at 209.

Shannon R. Barnaby is a 2011 graduate of  Northern Illinois University College of Law. She was the 2010-2011 External Publications Editor of the Northern Illinois University Law Review, a Law Clerk at The Collins Law Firm in Naperville, IL, and Graduate Assistant/Law Clerk at Students’ Legal Assistance at Northern Illinois University. She received her undergraduate degree from Northern Illinois University in 2001.

 
 
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