| In an effort to thwart a perceived "crisis" and | | | | legislative interest. This time, in addition to the |
| based on fear concocted by media campaigns | | | | causes previously discussed, the Commission |
| designed to shift the focus from the real problem, | | | | stated, "the insurance industry is at least partially |
| the citizens of the State of Nevada passed a | | | | responsible." |
| ballot initiative capping noneconomic damages in | | | | C. The Historical Solutions |
| medical malpractice actions. See NRS 41A.035. | | | | As far back as the 1976 Commission study, |
| This cap is unconstitutional under both the | | | | solutions to the alleged crisis were being proposed. |
| provisions of the United States and Nevada | | | | One of the proposed solutions included "tort |
| Constitutions. The courts should declare the | | | | reform." These reforms included limitation on jury |
| noneconomic damage cap unconstitutional. | | | | verdicts. Id. However, as early as this report, the |
| A. The Problem | | | | evidence suggested that statistical probability of |
| NRS 41A.035 and related provisions, collectively | | | | Plaintiff success was so low that any such |
| sometimes referred to as "tort reform" were | | | | limitation would have almost no real impact on |
| enacted to address the perceived problem of | | | | insurance rates and availability. The 1976 bulletin |
| skyrocketing medical malpractice insurance rates | | | | states, "only 8 percent of all claims ever go to |
| coupled with the belief that such rates were | | | | trial. Only 6 of that 8 percent go all the way to |
| either driving physician's out of practice, limiting | | | | verdict." Of those, only 17 percent were in favor |
| their practices, or completely leaving the State of | | | | of Plaintiffs." |
| Nevada. The urgency of the need for action and | | | | D. The Twenty First Century Problem |
| the perception presented was that in some way | | | | With an historical perspective and understanding, |
| this problem was immediate and causally | | | | we are brought to the instant crisis which lead to |
| connected to recent unreasonably high jury | | | | the ultimate initiative enactment of NRS |
| verdicts creating losses for insurers which justified | | | | §41A.035, limiting noneconomic damages to |
| unreasonable rate increases for medical | | | | $350,00.00. The clear purposes behind this tort |
| malpractice insurance. | | | | reform movement included: (a) reducing medical |
| The "problem" is not a creature of the twenty | | | | malpractice insurance rates; (b) stabilizing the |
| first century that has recently morphed from a | | | | insurance market and availability of that insurance; |
| single cell into a full blown tumor. Rather, the | | | | and (c) insuring the availability of medical care for |
| "problem" has existed for decades. For instance, in | | | | the citizens of Nevada. |
| September 1976, the Legislative Commission of | | | | NRS §41A.035 was introduced in 2003 as |
| the Legislative Counsel Bureau, State of Nevada | | | | Senate Bill 97, which tracked the initiative petition |
| published Bulletin No. 71-1, entitled "The Problem of | | | | and potential ballot submission to the voters. The |
| Medical Malpractice Insurance." This bulletin grew | | | | legislative history is replete with references to the |
| out of Senate Concurrent Resolution No. 21 | | | | fact that the Senate Bill 97 and the ballot initiative |
| (1975), wherein the study was commissioned. The | | | | language were identical. Thus, while the legislature |
| Resolution states, | | | | itself did not enact NRS §41A.035, the |
| WHEREAS, There is a nationwide problem of | | | | discussions before the legislature are informative |
| doctors and health care providers obtaining | | | | and relevant. On March 23, 2003, Dr. Manthei, an |
| malpractice insurance with many of the insurance | | | | individual whose name was synonymous with the |
| carriers getting out of malpractice coverage and | | | | initiative petition, testified before the Senate |
| others increasing premiums by several hundred | | | | Judiciary Commission stating, "All we are saying is |
| percent; and... | | | | presently the number of cases and the amount |
| WHEREAS, The malpractice problem in Nevada is | | | | of the awards is making health care unaffordable." |
| presently in a state of transition with the exact | | | | On March 5, 2003, Ms. Alice Molasky-Arman, |
| dimensions of a number of problems unclear;...The | | | | Commissioner for the Division of Insurance for |
| bulletin found that the "so-called malpractice crisis" | | | | the State of Nevada addressed the Senate |
| began in the early 1970's, with the twin problem | | | | Judiciary Committee. She testified that between |
| of high costs of premiums and decreasing | | | | 1999 and 2001, 296 of 552 claims filed closed with |
| availability of insurance. | | | | no indemnity payment. She further testified that |
| B. The Historical Causes | | | | in July 2002, there was a huge spike in the |
| It is important to have a general understanding of | | | | number of claims filed. Id. Ms. Molasky-Arman |
| the "causes" of the alleged crisis in order to | | | | stated that the 2002 tort reforms did not cause |
| evaluate whether the proposed "solution" is | | | | insurance rates to decrease. Both Lawrence |
| rationally related to the interest sought to be | | | | Matheis and Assemblywoman Buckley stated that |
| protected. In the 1976 Bulletin, the Commission | | | | the reforms would not cause insurance premiums |
| identified a number of potential causes. First, the | | | | to decline. At best, there was some hope that |
| Commission found that there was no one single | | | | the reforms would result in stabilization. Id. |
| "cause." Among the causes, the Commission | | | | In discussing the causes of insurance premium |
| included: (a) malpractice itself; (b) the media; (c) | | | | increases in Nevada, Ms. Molasky-Arman including |
| national litigiousness; (d) contingency fees; (e) the | | | | in those causes: (a) reinsurance; (b) the lack of |
| imposition of no fault insurance; (f) Stock market | | | | competition among insurers; and (c) stock market |
| losses; (g) Inadequate underwriting; and (h) jury | | | | losses. She did not include in her statement |
| verdicts. | | | | relating to causes jury verdicts and their impact |
| While these are not all of the causes, they | | | | on rates. |
| represent the most frequently discussed. | | | | With the foregoing background of the alleged |
| However, the Commission did conclude that the | | | | "crisis", the citizens of the State of Nevada were |
| leading cause of the medical malpractice crisis was | | | | subjected to a media blitz from both proponents |
| medical malpractice itself. A decade later, the | | | | and opponents of the ballot initiative. With the fear |
| Legislative Commission revisited the crisis, | | | | of unavailability of medical care driving their votes, |
| publishing a "Study of Insurance Against Medical | | | | the citizenry passed the legislation which embodied |
| Malpractice," Bulletin No. 87-18, Legislative | | | | NRS §41A.035. It is now a confusing |
| Commission of the Legislative Counsel Bureau, | | | | contradictory mess to say the least. We will delve |
| State of Nevada, August 1986. (Addendum IV). | | | | into this problem in finer detail in our next EZINE |
| This bulletin recognized that between the years | | | | article, or you can write or email us and we will |
| 1976 and 1983, nationally medical malpractice | | | | provide you with a list of possible solutions which |
| insurance rates rose only 51%. However, once | | | | we are currently taking on behalf of our medical |
| again the cycle flowed resulting in dramatic | | | | malpractice clients. |
| increases in 1984 and 1985. Id. This again piqued | | | | |