No On 46

A hotly contested ballot initiative in California would raise the limit of non-economic damages to victims of medical malpractice and impose randomized drug testing on physicians.

Proposition 46, if passed, would increase non-economic damages from $250,000, a level that has been stagnant for nearly 40 years, to over $1 million.

The recent spate of cases about spinal hardware counterfeiting in workers' compensation cases could be the dream poster for the measure.

Complaints filed Friday in the Los Angeles Superior Court bring to 32 the number of individual cases filed by patients who allege their surgeons accepted kickbacks to use counterfeit medical devices as part of a widespread conspiracy to exploit the spinal hardware passthrough regulation.

But don't trust ballot measures.

The plaintiff's lawyers say there are hundreds more in the wings.

Billing the full cost allowed for FDA approved spinal hardware, but using counterfeit hardware, the perpetrators were able to make excessive profits while putting patients at huge medical and health risk.

The lawsuits name individual surgeons, hospitals, manufacturers and their owners, and others that were allegedly involved in a complex conspiracy of kickbacks, billing and medical fraud.

Labor Code Section 5318, repealed completely at the start of 2014, required employers and insurers to pay 100% of a hospital's documented cost for hardware, plus $250. Attempts to close that loophole in the past through legislation met with a strong and well funded (if not outright bribery) lobby from those involved.

According to complaints, the defendant hospitals, Tri-City in Hawaiian Gardens and Pacific Hospital of Long Beach and others, used "sham" distributor companies to "fraudulently" inflate their reported actual costs for purchasing hardware and passed these invoices along to carriers. At the same time, doctors accepted kickbacks from hospitals where they scheduled fusions, according to complaints, and the hospitals turned a blind eye towards the counterfeit hardware because surgical revenue was so good.

These complaints are outfall from earlier criminal actions against Michael Drobot and others, which resulted in Drobot's plea agreement with prosecutors to be a witness against others, including the bribed politicians.

Because these complaints allege fraud, an intentional tort, punitive damages may be available outside the medical malpractice cap against the physicians, hospitals and others in the supply chain.

But intention is difficult to prove, and according to plaintiff's lawyer in one of the cases, one of the physicians started noting in charts that he informed patients that the hardware was "experimental" and not FDA approved - this creates a spitting match between patient and physician where credibility to a jury is going to determine whether "intent" was proven.

Bringing this back to Proposition 46 - the simple fact is that the cap on non-economic damages is not inflation adjusted, and in my opinion has become inadequate as a deterrent to bad medicine.

But at the same time, the measure's imposition of random drug testing of physicians does nothing but increase the cost of medicine, and won't do much if anything towards patient safety.

And indeed, there is nothing that would prevent criminals from perpetrating wide spread conspiracies to further their financial gain at the expense of unwitting patients, as alleged in the counterfeit spinal hardware suits.

So while I believe that the cap on non-economic damages in medical malpractice should be examined and elevated, I'm voting "no" on Proposition 46.