BY GARY PERILLOUX

Daily Journal

For a private nonprofit hospital, a $4.9 million insurance bill - nearly double the previous year's bill - hurts.

But the deeper wounds may come later when doctors leave, services dwindle and patients clamor for care they can no longer get.

That's a doomsday scenario. Yet soaring legal and insurance costs coupled with the threat of doctors jumping ship have North Mississippi Health Services crying out for help.

It helps that the Tupelo-based healthcare provider with more than 6,000 employees operates the nation's largest rural hospital. But a national spotlight on Mississippi's penchant for large jury awards is making life difficult for the hospital.

"We're having extreme difficulty in recruiting providers, and having difficulty throughout our system retaining providers," said Jeff Barber, chief executive for NMHS.

"We really are faced with the question of are we going to be able to continue offering quality care to our patients," said Gerald Wages, NMHS chief operating officer.

Claims against healthcare providers, he added, are running 30 percent higher in Mississippi than the nation. "Where we used to get a half-million-dollar claim, now we get a $3 million claim."

The medical community believes the Mississippi Legislature must put restraints on a civil justice system that in recent years has seen judgments of as much as $150 million awarded to plaintiffs who took drugs later deemed risky or who worked in an environment that contained asbestos.

While those judgments have hit out-of-state companies hardest, advocates for civil justice reform - or tort reform - argue that the huge judgments are raising the costs of doing business for everyone in Mississippi and souring businesses on expanding or coming to the state.

Many trial attorneys disagree.

Attorney views

Robert "Chip" Davis, a Tupelo attorney, sees a troublesome trend in the assignment of blame over tort reform.

"One aspect is they set it up as doctors versus lawyers," said Davis, who considers civil lawsuits an important part of his work. "That's not the way it is. There are doctors on the Coast who put signs in their windows saying they won't treat plaintiff lawyers. Well, we don't sit around and make up illnesses. It's not about lawyers, doggone it. It's about injured people, regular hard-working people who think one of their children may have been damaged."

One of the reforms floated - a $500,000 cap on noneconomic damages, for instance - is no more realistic for trials than would be putting the same size shoe on every person's foot, Davis believes.

"That may be far more than too much in some cases," he said, "and it may not scratch the surface in others. The debate should not be about the broad generalities because that's not what the justice system is about. The court system - both criminal and civil - deals with special circumstances and special circumstances one case at a time."

After hearing the argument that big jury awards are creating a dangerous medical malpractice environment in the state, Tupelo attorney Jak McGee Smith researched court jurisdictions statewide.

In the past five years, Smith found 18 verdicts for $35 million in 76 of 82 counties. Research continues for six other counties - Stone, Madison, Jefferson, Hinds, Copiah, and Claiborne - with Jefferson, Hinds and Claiborne notable as jurisdictions where large awards have been given.

While the average medical malpractice verdict in the past five years was just under $2 million, the average verdict in the previous five years was about $340,000, his study showed.

Still, Smith doesn't believe the civil justice system is out of balance. At least 52 counties in his study have never had a medical malpractice verdict, he said. Furthermore, Smith said only one medical malpractice case in the state's history ever included punitive damages for grossly negligent care - and that punitive award was later reversed by the state Supreme Court.

"The hospital here in my judgment is very responsible," Smith said, so it shouldn't have to worry about punitive awards. Additionally, he said, doctors win nearly 90 percent of the cases tried in Mississippi.

But the current civil justice system is needed to deal with the reality of malpractice, Smith said, citing a 1999 National Academy of Sciences study that blamed 98,000 deaths a year on medical malpractice.

"The checks and balance on this are there," Smith said of the Mississippi system. "If you look at trials on these (suits), they have reversed more than they have affirmed. And in fact, they reverse them all the time."

Venue shopping

Another mess medical providers cite is an inconsistent system for locating trials. North Mississippi Health Services currently is defending a case in Natchez which stems from emergency care it gave a Pontotoc patient in Tupelo. A physician no longer being sued in the case owned a house in Natchez, so the plaintiff successfully petitioned the court to move the case where a jury more favorable to the plaintiff might be found.

"Now, it's just us and the plaintiff in Natchez," Wages said. "(Let's go to) either the plaintiff's county or the defendant's county. Let's not go 250 miles away."

Dr. Ken Davis, NMHS chief medical officer, said his regional hospital system has about 60 percent of the national average for physicians per 100,000 people. NMHS would like to increase its physician staff of 560 to 900, or 80 percent of the national average.

But failing tort reform, he fears the trend will go in the opposite direction.

"I think we're going to lose about 100 equivalent doctors over the next year," he said. "We may lose 20 percent of our physician manpower and we are very fragile with our coverage."

Davis, the Tupelo attorney, said doctors' ranks have actually grown in the last three years and they enjoy special protections: They can't be sued for charity work and they enjoy a shorter statute of limitations for cases against them than does the general public.

What's more, he said, the tort reform argument is largely a red herring.

"This is not a civil justice problem; this is an insurance problem," he said. "... But they need to complain to (insurance commissioner) George Dale about that. There are companies that are shutting down their medical malpractice in tons of places. They lost tons of money on Enron and they lost tons of money in 9/11. And to fix the problem, they want to restrict (civil lawsuits)."

A frequent protest from attorneys opposed to capping noneconomic damages is this: How do you place a limit on the value of a person's life?

Doctors have a rejoinder of their own. If the costs of practicing medicine exact too high a toll, there will be fewer physicians to sue and fewer physicians to provide care.

"There were patients we've taken care of and miraculous things have occurred and they have lived," Tupelo surgeon Terry Pinson said. "What's the value of a person's life when there's no one here to take care of them any longer? There is no price."

Uncertain environment

In May alone, 163 physicians covered by the Medical Assurance Company of Mississippi were sued. That's 7 percent of MACM's entire clientele.

Michael Houpt, the company's CEO, said nothing the Legislature does will affect its rates for 2003 because those rates will be set in September based on recent claims experience. Tort reforms could help doctors' insurance costs in 2004, he said.

Houpt declined to speculate on how high medical malpractice rates for the company will go after increases of 21 percent for ob/gyns and 31 percent for general surgeons in 2002. MACM hasn't placed a moratorium on insuring new clients, but it has greatly restricted the writing of new policies, Houpt said.

Dr. Ken Davis said the issue is not one of income. Rather, doctors' whole livelihoods - from retirement plans to college savings for their children to their houses - are threatened by out-of-control jury verdicts.

"It's not that I'm not making enough money," he said. "It's that everything I'm working for is at stake. It's like being in prison."

Smith, the Tupelo attorney, counts a grandfather and nephew as doctors and appreciates the importance of the job physicians do. But he wants them to be reasonable.

"We want to help our doctors here (but) they're not a separate class of citizens," Smith said. "I firmly believe we need to look at the situation, but we need to look at the facts. I don't think the doctors need to knee-jerk blame the lawyers on this."