Hawai'i should place tighter limits on medical malpractice lawsuits to keep doctors from leaving high-risk fields or abandoning the state, according to a proposal advanced by Gov. Linda Lingle.

But trial lawyers, and even some doctors, say the Lingle administration has overstated the link between malpractice reform and reducing doctor shortages.

The difficulty of finding specialists to practice in rural areas and doctors willing to volunteer for on-call trauma shifts is linked to a complex set of factors that go beyond high malpractice premiums and the threat of lawsuits.

Lingle believes it would help if Hawai'i followed states such as California and Texas and set a $250,000 cap on noneconomic damages in medical malpractice lawsuits. The state already has a $375,000 cap on pain and suffering, but the new limit would cap damage awards for emotional distress and the loss of companionship.

Patients who are mistreated by doctors would still be able to recover unlimited financial damages, such as the loss of wages, but Lingle and many healthcare professionals predict that a cap on noneconomic damages would stabilize medical malpractice premiums and create a climate in which doctors would return to the emergency room.

State Insurance Commissioner J.P. Schmidt said high premiums and the threat of lawsuits are among the leading factors keeping many specialists out of emergency rooms and rural areas of the Islands. "It's No. 1," he said. "Absolutely no question about it."

National studies have found that damage caps may lower the growth rate in malpractice premiums and increase doctor supply, but might come at the expense of patients who have been severely injured by negligent doctors.

SEVERAL FACTORS

Doctors say a combination of factors — not just medical malpractice — is driving their decision to give up on-call shifts or, in some cases, leave Hawai'i for other states.

Dr. Jeffery "Kimo" Harpstrite, an orthopedic surgeon at The Queen's Medical Center, stopped volunteering for on-call shifts two years ago. The high-risk nature of the work invited malpractice lawsuits. State, federal and private reimbursements for patient care were too low. And the odd hours took him away from his three children.

"I'd say they're all about even," Harpstrite said. "I can't say medical malpractice was the one issue, but it was definitely one of the issues."

State House Democrats are reviewing a bill, as an alternative to Lingle's proposal, that would place a $500,000 cap on noneconomic damages but also set limits on malpractice premium rate increases. The bill would sunset in July 2015 — or before, if premiums increase over the limits — giving lawmakers and healthcare policy analysts time to study whether it works.

"I've got to do my homework. My question is whether a cap is going to cut off patient access to remedies through the courts?" said state Rep. Tommy Waters, D-51st (Lanikai, Waimanalo), the chairman of the House Judiciary Committee, which will soon hear the bill.

SHOW THE PROOF

The House is more willing than in years past to hear malpractice reform after several startling reports about medical coverage gaps in the Islands and the financial problems at Kahuku Hospital on the North Shore, which are at least partly blamed on surging malpractice premiums.

But several lawmakers want to see a better connection between damage caps and lower premiums before they agree with Lingle.

In the state Senate, the Health Committee deferred a malpractice reform bill last week after failing to see a proven link with premium rates. "The question is are we really addressing the cost drivers," asked Sen. David Ige, D-16th (Pearl City, 'Aiea), the chairman of the committee. "We want to see real savings, not phantom savings."

Doctors are required to have medical malpractice insurance, with policies that typically cover $1 million in liability for one case and $3 million in liability for a year. Premiums vary widely by specialty, with higher-risk specialists in orthopedics, obstetrics/gynecology and neurology paying the largest premiums. Premiums also vary by geographic location and are often driven by market forces and lawsuit patterns.

Private insurance companies no longer offer malpractice insurance in Hawai'i, but doctors can choose from three nonprofit doctor-owned insurers or insurance trusts. The Medical Insurance Exchange of California, based in Oakland, Calif., is the largest malpractice insurer in Hawai'i with more than 1,100 doctors.

For Hawai'i doctors insured by MIEC, premiums increased by 5 percent in 2003, 25 percent in 2004 and 15 percent in 2005 before stabilizing in 2006 and 2007, according to Brian Taylorson, the supervisor in MIEC's Hawai'i claims office.

Annual reports by the state insurance commissioner show insurer losses from malpractice court awards, settlement payments and expenses spiked in 2004 and 2005 — with losses higher than the premiums collected.

Trial lawyers and some healthcare policy analysts say the higher losses are from a few large malpractice awards in those years.

LAWSUIT SCREENS

After previous concern about high malpractice costs in the 1970s, the Legislature required patients who want to bring claims against doctors to go before the Medical Claims Conciliation Panel for an advisory decision. Four years ago, as an additional screen against frivolous lawsuits, the Legislature also required patients to consult with a doctor with the same specialty as the doctor involved in the potential claim before coming to the panel.

The number of malpractice claims in Hawai'i bumped up slightly in the past year — to 115 — but the total has declined over the past decade. Over the past three years, the panel has found only one claim to be frivolous.

Most malpractice claims are settled out of court, and a lack of complete national data on the number of claims and the amount of awards makes it problematic to determine where Hawai'i stands. The Kaiser Family Foundation, in an analysis based on information from the National Practitioner Data Bank, found that Hawai'i had the second highest average claim payment in the nation in 2005 at $572,829. But the foundation placed Hawai'i 43rd among states in total dollars paid in claims.

Schmidt, using data from MIEC, has told lawmakers that the average claim payment in Hawai'i ranged from $137,104 to $528,952 between 1995 and 2004.

The American Medical Association does not list Hawai'i among the states it believes are in medical malpractice crisis, but the Islands are among the association's caution states.

PREMIUMS VARY

Bob Toyofuku, an attorney who is a lobbyist for the Consumer Lawyers of Hawai'i, said the Lingle administration has not answered the threshold question of whether damage caps will solve the premium, access or on-call problems.

Toyofuku said that MIEC's own data shows that while Hawai'i doctors pay higher premiums than doctors in Northern California, they pay less than doctors in Southern California, even though California has had its cap on noneconomic damages for three decades.

The annual MIEC premium for obstetrics and gynecology, for example, was $61,684 for Hawai'i doctors, $50,792 for Northern California doctors and $86,348 for Los Angeles doctors.

"The focus behind the so-called medical malpractice reform has always been and still is to reduce potential recovery for the injured patient, reduce the attorney's fees for the attorneys who represent these injured patients, and generally make it harder for the injured person to recover just compensation," Toyofuku has told lawmakers.

Toyofuku also said that while there are shortages in some specialists in rural areas — a problem nationally — the total number of doctors living in Hawai'i has increased over the past five years, puncturing the dire picture among some in the healthcare industry that doctors are fleeing the state.

NO OVERALL SHORTAGE

Paula Arcena, the executive director of the Hawai'i Medical Association, acknowledges that the Islands do not have a shortage of doctors overall. She said the shortages are in high-risk specialties in rural and underserved areas and in doctors willing to volunteer for on-call duty.

"The lack of liability reform in Hawai'i is one piece of the puzzle," Arcena said. "We do not believe that the passage of liability reform will be the silver bullet to cure all healthcare ills. However, it is one solution that the Hawai'i Legislature can implement that will make a positive difference in recruiting and retaining physicians.

State Rep. Josh Green, D-6th (N. Kona, Keauhou, Kailua-Kona), an emergency room doctor and the chairman of the state House Health Committee, said he believes the Lingle administration has exaggerated the malpractice threat. But he also thinks the state should put some cap on noneconomic damages, even if it is large and symbolic, such as $3 million instead of $250,000.

Green said the healthcare industry has seized on malpractice reform this session because, given the alarming reports about a healthcare crisis, lawmakers appear more inclined to listen than in years past. He also said there may be a better chance of getting a malpractice reform bill than to quickly raise state, federal and private reimbursement rates for doctors' services.

"The biggest issue is reimbursement," Green said. "If we solved that, you wouldn't be hearing as much about malpractice reform. But we do need the cap. We don't need it because it's the most important part of the healthcare crisis. But it's in the top five."

DAMAGE CAP PRAISED

Several doctors say higher malpractice premiums can hurt in Hawai'i because doctors here generally earn less money than they would on the Mainland.

Harpstrite, the orthopedic surgeon at Queen's, did trauma fellowships at the University of Texas Southwestern program at Parkland Memorial Hospital in Dallas and the University of Washington's Harborview Medical Center in Seattle. He said he still has doctor friends in Texas and they are praising the impact of a damage cap passed in 2003.

Premium rates are down, according to the Texas insurance commissioner, and more insurance companies have entered the market.

Harpstrite, whose practice involves joint reconstruction, sports medicine and fracture surgery, said he might consider going back to on-call duty if Hawai'i adopts a similar damage cap. But he said he did not want to leave people with the wrong impression.

"I want to be honest with you," he said. "I could really make the story by saying 'That's the thing.' But it's not. It's a combination of things."

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.