The Arizona Medical Association (ArMA) has accelerated its campaign to treat the malady of constantly increasing costs of malpractice insurance.

At its annual meeting in May, ArMA’s House of Delegates adopted a resolution supporting change in the Arizona Constitution to reform medical liability law, and the association, which represents 12,000 medical and osteopathic doctors, formed a new corporation, Arizonans for Access to Health Care, to spearhead a fund-raising campaign and “the fight on Arizona tort reform.”

The new corporation also will hire a political campaign firm to convince the public to vote for a ballot initiative that might include an amendment to cap non-economic damage awards in medical liability cases, said Andrea Smiley, association spokesman.

“We hope to have a plan of action by September,” she said.

Ms. Smiley said ArMA has raised close to $500,000 from doctors and hospitals since it announced its campaign last fall, but the effort has been “passive.”

David Landrith, an ArMA lobbyist, said a ballot initiative campaign could cost the association up to $6 million to battle the Arizona Trial Lawyers Association (ATLA) and others who oppose changing the Constitution, which prohibits limits on recovery of damages for personal injury or death.

The ArMA resolution also states that if a Constitutional change cannot be achieved in a timely manner, the association will inform its members and the news media of the reasons why.

The Legislature this year put off the idea of pursuing a medical liability referendum for 2006.

In an April interview, Jon Hinz, director of Fairness and Accountability in Insurance Reform (FAIR), which is funded by ATLA, said the two organizations have not raised any money. Trial lawyers and Governor Napolitano argue that caps on medical malpractice damages will not reduce malpractice insurance rates.

“We’re always ready to go into a fund raising mode,” he said. “I’m a little dismayed that they don’t even have a ballot position. I don’t understand why they’re going forward with this. If we see something begin on this, we will kick it into gear, and they will have the fight of their lives.”

Ballot Measure

Mr. Landrith says a ballot measure could take any number of forms, ranging from a repeal of constitutional prohibitions on caps across the board, or just for medical malpractice, to caps at an established amount, or an initiative that encompasses a package of tort reforms.

Senate Health Committee Chairman Carolyn Allen, R-8, says a cap should be at least $500,000, twice the amount passed in those states that have enacted caps and the cap that was proposed in several federal bills that were defeated over the past two years.

Sen. Robert Cannell, D-24, a Yuma pediatrician, said, “We better have our ducks in a row, and we better have the will because there’s going to be a huge fight.”

On April 25, Governor Napolitano signed, with reservations, the medical malpractice procedures bill (S1036) that says an apology for a medical mistake or unanticipated

“I predict that this simple law change will lead to some patients ultimately choosing not to file malpractice lawsuits in response to an adverse outcome,” she said.

But Ms. Napolitano has maintained that reform of the insurance industry — not caps on damages — is the only solution to the rising costs of malpractice insurance.

Physician Shortage

The cost of malpractice insurance is often given as one reason for the shortage of physicians in Arizona.

“The reasons are complex, but they add up to an unfriendly environment for physicians,” ArMA president Dr. Leonard Ditmanson wrote in a June 21 opinion piece in several Arizona newspapers. He said 90 percent of Arizona physicians have come from other states.

“This staggering weight of rising expenses and falling income is discouraging physicians from staying in or coming to Arizona and is compelling many physicians to retire early, curtail services to cut costs and risk and, for some, seek more practice-friendly environments in other states,” he said.

The Journal of the American Medical Association recently published two studies it says showed states that have passed medical liability reform have seen a 3.3 percent increase over short period of time in their physician population, with a large number of the high-risk specialists returning to practice.

“Contrary to popular belief, the difference in supply came mostly from older doctors putting off retirement in reform states and new physicians entering practice there, not from physicians moving between states to reduce their insurance premiums,” a second study reported.

Other Backers Of Reform

Besides ArMA and chambers of commerce, the Arizona Hospital and Healthcare Association, the Mutual Insurance Company of Arizona (MICA), the Maricopa County Medical Society and various physician organizations are backing medical liability reform. MICA, which insures 6,000 Arizona physicians, raised its malpractice premium rates 12.5 percent last year because of claim losses, its top official said.

Dr. James Carland, president and CEO of the physician-owned insurance company, said in January that since 2002, MICA has paid out $67 million for direct malpractice claims, plus $25 million in fees to defense attorneys. The payments covered 198 settlements and two trials. Over the past three years, he said, defense attorneys have successfully defended physicians against malpractice charges in 73 of 78 trials. —