California Proposition 46, Medical Malpractice Lawsuits Cap and Drug Testing of Doctors (2014)

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Proposition 46

Type	Initiative
Topic	Healthcare
Status	Defeated d

2014 propositions

June 3
Proposition 41 a
Proposition 42 a
November 4
Proposition 1 a
Proposition 2 a
Proposition 45 d
Proposition 46d
Proposition 47 a
Proposition 48 d
Donations • Vendors
Endorsements • Full text
Ballot titles • Fiscal impact
Local measures

California Proposition 46, the Medical Malpractice Lawsuits Cap and Drug Testing of Doctors Initiative, was on the November 4, 2014 ballot in California as an initiated state statute. The measure was defeated.

The initiative would have:^[1]

Increased the state's cap on non-economic damages that can be assessed in medical negligence lawsuits to over $1 million from the current cap of $250,000.
Required drug and alcohol testing of doctors and reporting of positive tests to the California Medical Board.
Required the California Medical Board to suspend doctors pending investigation of positive tests and take disciplinary action if the doctor was found impaired while on duty.
Required health care practitioners to report any doctor suspected of drug or alcohol impairment or medical negligence.
Required health care practitioners to consult the state prescription drug history database before prescribing certain controlled substances.

Supporters of the initiative refered to it as the Troy and Alana Pack Patient Safety Act of 2014, after two children who were killed by a driver under the influence of alcohol and abused prescription drugs.^[2]

The measure would have created the first law in the United States to require the random drug testing of physicians.^[3]

Supporters of Proposition 46 argued that medical negligence is too common and pain and suffering damage awards are too low. Opponents said the initiative wasn't about protecting patients, but increasing medical lawsuit payouts to trial lawyers.

Election results

California Proposition 46
Result	Votes	Percentage
d No	4,774,364	66.76%
Yes	2,376,817	33.24%

Election results via: California Secretary of State

Text of measure

See also: Ballot titles, summaries and fiscal statements for California's 2014 ballot propositions

Ballot title:^[4]

Drug and Alcohol Testing of Doctors. Medical Negligence Lawsuits. Initiative Statute.

Official summary:

The long-form summary read:^[4]

“

Requires drug and alcohol testing of doctors and reporting of positive test to the California Medical Board.
Requires Board to suspend doctor pending investigation of positive test and take disciplinary action if doctor was impaired while on duty.
Requires doctors to report any other doctor suspected of drug or alcohol impairment or medical negligence.
Requires health care practitioners to consult state prescription drug history database before prescribing certain controlled substances.
Increases $250,000 cap on pain and suffering damages in medical negligence lawsuits to account for inflation.^[5]

”

Fiscal impact statement:^[4]

Note: The fiscal impact statement for a California ballot initiative authorized for circulation is jointly prepared by the state's legislative analyst and its director of finance.

“

Increased state and local government health care costs from raising the cap on medical malpractice damages, likely ranging from the tens of millions of dollars to several hundred million dollars annually.
Uncertain, but potentially significant, state and local government savings from new requirements on health care providers, such as provisions related to prescription drug monitoring and alcohol and drug testing of physicians. These savings would offset to some extent the health care costs noted above.^[5]

”

Controversy

The San Diego Union-Tribune argued that the first sentence of the ballot title - "Drug and alcohol testing of doctors." - was intentionally placed first by Attorney General Kamala Harris (D). The editorial board continued, "That’s right — Attorney General Kamala Harris intentionally deceived ballot signers by highlighting one of the fig leaves that trial lawyers attached to the measure to hide their real intent. It’s in keeping with her long history of using misleading ballot titles and summaries to help measures her allies like and hurt measures they don’t."^[6]

The San Francisco Chronicle’s editorial board also took issue with Harris’ title and summary. The board stated, “Voters should not be fooled by the title and summary put together by Attorney General Kamala Harris’ office that focuses on the testing as if it were the centerpiece of the measure. It is not. (Harris has been a less-than-stellar steward of ballot titles and summaries throughout her term, often skewing them with loaded language for political effect. Her descriptions of everything from pension reforms to tax increases have been so egregiously unfair that they raise the question of whether the responsibility should rest with a less-partisan officeholder. We’ll save elaboration on that issue for another day.)”^[7]

Background

MICRA

The Medical Injury Compensation Reform Act (MICRA) was signed in 1975 by Gov. Jerry Brown (D). MICRA capped noneconomic pain and suffering damages, as a result of medical malpractice, at $250,000. He did so in response to doctors who complained about medical malpractice awards being too high. If MICRA was pegged to inflation, the noneconomic cap would now be set at $1.1 million. The 2014 noneconomic cap of $250,000 would have been $57,600 in 1975.^[2] Under MICRA, there is no cap on economic damages, such as compensation for medical bills or lost wages.^[8]

Support

The organization that led the campaign in support of the measure was known as Yes on 46.^[9]

Political consultant Chris Lehane was hired to advise supporters.^[1] He had previously served as a special assistant counsel to President Bill Clinton (D).^[10]

Supporters

Officials

US Senator Barbara Boxer (D)^[11]

Organizations

Consumer Watchdog
Consumer Federation of California^[12]
Congress of California Seniors^[13]
Consumer Attorneys of California
California Teamsters Public Affairs Council^[14]
California Conference Board–Amalgamated Transit Union

Individuals

Candace Lightner, founder of Mothers Against Drunk Driving^[15]
Erin Brockovich, consumer advocate^[16]

Arguments

Yes on 46 made the following arguments in an FAQ:

“

Will indexing the cap raise health care costs on patients?

Medical malpractice costs (payments and insurance) represent only a very small fraction of health care costs. In fact, California’s medical malpractice cap has not reduced health care costs; indexing the cap will not raise costs because malpractice-related costs are such an infinitesimally small portion of health care costs. The CBO has found that the package of limitations on liability advocated by the AMA cannot possibly reduce healthcare costs by more than ½ of 1%. In contrast, the Affordable Care Act contains several reforms that are already reducing healthcare costs by more than that amount: Accountable Care Organizations, Patient-Centered Medical Homes, pay for performance initiatives, and bundled payments.

Will medical malpractice insurance rates skyrocket if the cap is raised, resulting in doctors fleeing California and a reduction in access to care?

This is simply false; medical malpractice insurers in California have consistently had such high profits that they would continue to make above-average profits even if the MICRA cap were indexed to inflation. The insurance industry earned a 6.5% return on net worth during the last ten years. California medical malpractice insurers, however, earned a 16.7% return – more than 250% of the industry average. Moreover, in each of the last eight years California malpractice insurers had loss ratios of 38% or less – meaning that they always had at least 62 cents of each premium dollar, plus all investment income, left over for expenses and profit.
Proposition 103 gave the California State Insurance Commissioner the power to regulate many types of insurance rates, including medical malpractice insurance. Indeed, in 2012, the Insurance Commissioner found that California’s medical malpractice insurers were charging doctors too much in premiums and he slashed their rates, saving California’s doctors over $52 million in premiums. California already has an effective and successful system to regulate medical malpractice insurance premiums – a system that won’t change because of an adjustment of the cap.

Will raising the cap lead to the closure of community health centers?

Indexing the cap for inflation will NOT increase the malpractice insurance costs of community health centers because health centers and free clinics are both protected by the Federal Tort Claims Act. Under the FTCA, individuals injured by the negligent acts of federal employees may seek and receive compensation from the federal government. Health centers and free clinics are therefore no longer liable for medical malpractice, and have no need to buy medical malpractice insurance.

Isn’t it true that the Pack Act isn’t about patient safety, but profits for attorneys?

A Harvard University study found that medical malpractice causes 300,000 injuries annually in hospitals alone. The deterrent effect of patient protection laws can save the health care system from these human and financial losses.
Medical malpractice litigation deters physicians and hospitals from committing medical errors and encourages them to gather and analyze information about past errors, thereby reducing the future costs associated with such errors. Without strong financial repercussions for malpractice, there is no incentive for doctors and hospitals to fix bad behavior.
MICRA’s original strict attorneys fee structure is left entirely in place by the Pack Act.

Isn’t it true that, since current law allows unlimited economic damages, there’s no need for a higher cap on non-economic “pain and suffering” damages?

Economic damages are limited to wage loss and future medical bills. In cases where the victim doesn’t have wages (children, the disabled, the elderly, stay-at-home moms) or where the victim dies (and therefore there are no future medical bills to pay), there are zero economic damages. This means that the most vulnerable among us can recover at most $250,000, while those with higher incomes have other avenues for financial redress.

^[5]

”

—Yes on 46^[17]

Consumer Watchdog issued a flyer following the group's signature submission on March 24, 2014. The flyer made the following arguments:^[18]

"According to a study published in the Journal of Patient Safety, medical negligence is the third leading cause of death in the country behind only heart disease and cancer. As many as 440,000 people die each year from preventable medical negligence. That’s like a 747 crashing every 10 hours."
"The California Medical Board estimates that almost one-in-five doctors (18%) suffer from drug and/or alcohol abuse at some point during their careers – and leading medical safety experts have called for random drug testing to curb substance abuse and ensure patient safety."
"The Journal of the American Medical Association found that doctors are the biggest suppliers for chronic prescription drug abusers, and called for the mandatory usage of state prescription drug databases... A 2012 Los Angeles Times investigation found that drugs prescribed by doctors caused or contributed to nearly half of recent prescription overdose deaths in Southern California."

Donors

Total campaign cash as of December 31, 2014
Support:	$13,306,775
Opposition:	$59,602,909

Four ballot measure campaign committees were registered in support of the initiative as of December 31, 2014:^[19]

Note: Consumer Watchdog Campaign - Yes on 45 and 46, A Coalition of Consumer Advocates, Attorneys and Nurses supported Proposition 46 and Proposition 45.

Committee	Amount raised	Amount spent
Consumer Watchdog Campaign - Yes on 45 and 46, A Coalition of Consumer Advocates, Attorneys and Nurses	$2,397,542	$2,106,214
Consumer Watchdog Campaign - Yes on 46	$100,108	$94,148
Families for Patient Safety	$38,215	$38,215
Yes on Prop. 46, Your Neighbors for Patient Safety	$10,770,910	$9,921,922
Total	$13,306,775	$12,160,499

The following are the donors who contributed $100,000 or more to the campaign supporting the initiative as of December 31, 2014:^[19]

Note: Some of these donors gave their money to a committee that was simultaneously supporting more than one ballot measure. When that is the case, it is not generally possible to break down how much of that donor's money specifically was spent on the campaign for a particular proposition. Those contributions are listed below with shading; readers should not assume that all or even most of a donation to a multi-purpose committee was used for expenditures related to this particular proposition.

Donor	Amount
Consumer Attorneys Issue PAC	$2,290,000
Consumer Watchdog	$267,148
Robinson, Calcagnie, Robinson, Shapiro, Davis, Inc.	$275,000
Kabateck, Brown, Kellner, LLP	$260,000
Shernoff, Bidart, Echeverria, Bentley, LLP	$205,600
Girardia / Keese	$200,000
Greene Broillet & Wheeler, LLP	$175,000
Law Offices of Walkup, Melodia, Kelly & Schoenberger	$150,000
Bruce G. Fagel, A Law Corporation	$135,000
Bisnar/Chase Personal Injury Attorneys, LLP	$126,000
Panish, Shea & Boyle, LLP	$125,000
Kazan, McClain, Satterley, Lyons, Greenwood & Oberman	$100,000
Lieff, Canraser, Heimann & Berstein, LLP	$100,000

Campaign advertisements

See also: California Proposition 46 (2014) campaign advertisements

All campaign advertisements for campaigns in favor of the measure can be found here.

U.S. Sen. Barbara Boxer: Yes On California Prop 46	Dr. Stephen Loyd: Yes on California Prop 46	Bob Pack: Yes on Prop 46.

Opposition

No on 46 led the campaign in opposition to the initiative.^[20]

Democratic political consultant Gale Kaufman was hired by a coalition of insurers, hospitals and doctors to oppose the measure.^[1] Kaufman served as the primary consultant for No on Proposition 6 and 9 in 2008.^[21]