*1 Litem, Matthew his ad Guardian Ferdon, Vincent R. Petrucelli,
Cynthia Ferdon and Dennis Ferdon, Plaintiffs-Appellants-Petitioners,
v. Fund, Medical Compensation Wisconsin Patients Company, Protective Michael M.D., J. Brockman, Bay and Aurora Health Care, Inc., West d/b/a Gynecology & Obstetrics, Ltd.,
Defendants-Respondents, Connecticut Life Company, General Insurance Cigna Insurance, Healthsource
a/k/a f/k/a Provident Administrators, Inc., a/k/a County Provident, Healthsource of Oconto, Nominal-Defendants.
Supreme Court argument April No. 2003AP988. Oral July Decided
An amicus curiae brief filed was B. Michael Foley VanSicklen, Lardner, Roberta F. Howell & Physicians LLP, Madison, on behalf of Insurance Com- pany Casualty Property of Wisconsin and the Insurers *10 by Englund, America; Association of Madison, and Eric on behalf of the Wisconsin Insurance Alliance. by Timothy
An amicus curiae brief filed was J. Muldowney, L. Peterson and LaFollette God- Jennifer frey Kahn, Cohen, & Madison, Madison, and Melanie Society behalf of the Wisconsin Medical and the Ameri- can Medical Association. by
An Weis, amicus curiae brief was filed D. James Robert L. Rottier, S.C., Jaskulski Habush andHabush & Academy Milwaukee, on behalf of the Wisconsin of Trial Lawyers. by
An amicus curiae brief was filed Colleen D. Ball Appellate Counsel, and S.C., Wauwatosa, on behalf for Wisconsin Coalition Civil Justice and Wisconsin Manufacturers and Commerce. by Pyper,
An amicus curiae brief was filed Thomas M. Cynthia Whyte S.C., L. and Buchko Hirschboeck Dudek Hospital Madison, on behalf of The Wisconsin Associa- Hospital tion, Inc. and The American Association. ¶ 1. S. ABRAHAMSON, SHIRLEY C.J. is a This summary appeals review of a order1 of the court of affirming judgment of the circuit court for Brown County, Judge. judgment Naze, Peter J. The in this malpractice medical action was in favor the Wisconsin (Fund)2 Compensation against Patients Fund Mat- thew Ferdon. Fund, Comp. Ferdon v. Wis. Patients 2003AP988, No. (Wis. 2004).
unpublished App. order Ct. Feb. recently The changed name of Fund was "Injured Patients and Fund." See Compensation Families Act Wis. 111. as a action arose 2. This medical injured negligence Matthew of a doctor's
result surgeries, par- during Despite he has a birth. Ferdon right tially paralyzed arm. and deformed jury $700,000 in A Matthew Ferdon awarded injuries damages medical caused noneconomic expenses. $403,000 for future expect- jury life Ferdon had a heard that Matthew jury's years. ancy Therefore, noneconomic of 69 slightly damage more than an award of award reflects necessary year amount $10,000 a as the reasonable day having every compensate to live Ferdon for Matthew right functioning, partially deformed of his life with arm. Fund to have After the verdict the moved pursuant to the limita- reduced 893.55(4)(d) §§ 655.017 and in Wis. Stat.
tion established *11 (sometimes (2001-02).3 statutory called limitation jury cap) Ferdon means that Matthew award a year approximately as $5,900 a have an award will necessary compensate him to amount the reasonable right functioning, living partially deformed a for with arm. portion of to have that
¶ The Fund also moved 5. exceeding expenses for future the award pur- deposited fund into state-administered $100,000 § Stat. 655.015. suant to Wis. granted Fund's both of the
¶ court The circuit 6. summarily appeals affirmed The court of motions. granted judgment court court, and this the circuit review. 2001-02 are to the Statutes All references to Wisconsin noted. unless otherwise
version Three are in questions 7. presented instant
case: First, is the statutory limitation on noneconomic damages resulting from a medical malprac- 893.55(4)(d) tice in §§ Wis. Stat. injury 655.017 and constitutional? 9. Matthew Ferdon challenges statutory
limitation on noneconomic in medical mal- practice actions on grounds. several He asserts that the (1) mandatory statutory limitation violates the equal protection guarantees of the Constitution;4 Wisconsin (2) violates to trial right by jury provided as (3) I, Article Section 5 of the Wisconsin Constitution;5 right I, violates the to a as remedy provided Article (4) Constitution;6 Section 9 of the Wisconsin violates the due clause of the process Wisconsin Constitution;7 I, Article Section 1 as reads follows:
Equality; rights. people equally inherent 1. All Section are born independent, rights; among free and and have certain inherent life, liberty pursuit happiness; these are and the to secure these instituted, rights, governments deriving just powers are their from governed. the consent I, Article Section 5 reads as follows: by jury; right Trial verdict in civil cases. Section 5. The of trial by jury inviolate, remain shall shall extend all cases at law regard controversy.... without to the amount I, Article Section 9 as reads follows: Remedy wrongs. Every person Section is entitled to a remedy injuries, wrongs may certain in the laws for all or which he person, property, character; ought his receive in or he to obtain justice freely, being obliged it, purchase completely and without *12 denial, promptly delay,conformably and without and without to the laws. process, protection, Due like equal guaranteed by is Ar I, ticle 1 of Section the "All people Wisconsin Constitution: are (5) powers by separation of doctrine the violates and contrary judicial power, infringing a core remittitur, Constitution.8 VII, 2 of the Wisconsin Article Section statutory limitation was circuit court held The agreed. appeals constitutional; the court of (adjusted for $350,000 hold that the 10. We inflation) medical on noneconomic (d) 893.55(4) §§ vio- 655.017 forth in Wis. Stat. set guarantees protection equal of the Wisconsin lates the not, and do address not, need Wetherefore Constitution. challenges to the other constitutional Matthew Ferdon's cap. for further to the circuit court remand the cause We opinion. proceedings this not inconsistent with statutory uncon- limitation is Second, if the 11. payment Fund liable stitutional, is the statutory jury in excess of of the award amount argues pay the it need not excess The Fund limitation? question. not brief this Ferdon does amount. Matthew appeals did not answer court of circuit court and The question question. to the remand this therefore this We may parties on it. be heard that the circuit court so § 655.015, re- which Third, Wis. Stat. jury's portion quires for future of the award deposited exceeding into an expenses to be control, constitu- Fund has over which account inherent and have certain independent, equally free born happi life, liberty pursuit and the are rights; among these instituted, deriv governments are rights, these ness; to secure governed." of the from the consent just powers ing their VII, as follows: 2 reads Article Section judicial power this state shall he System. Section 2. Court court, consisting supreme system of one unified court in a vested court, general uniform appeals, trial courts of a circuit such court of law, by may and a jurisdiction legislature create as statewide legislature under section municipal if authorized court *13 parties argue constitutionality tional? The the § implementing and the 655.015 administrative rule it, § parties Wis. Admin. Code Ins 17.26. The have not procedure § adhered the set forth in to Wis. Stat. 227.40 challenging constitutionality before the the rule and have not considered whether rule exceeds the au- delegated § thority Accordingly, under 655.015. we re- question parties mand this to the circuit court for to § comply validity with 227.40 and address the of the rule, constitutionality as well as be heard on the of the statute and rule. continuing, important high-
¶ 13. Before it is light caps, that this case is not about whether all or even caps damages, constitutionally all on noneconomic are permissible. question The before this court is narrow cap (adjusted one: Is the for inflation and cap) hereinafter referred the $350,000 to as on noneco- malpractice nomic in medical cases set forth in 893.55(4)(d) §§ Wis. Stat. 655.017 and constitutional? malpractice litigation highly 14. Medical is a charged only area of the law with ramifications not injured party provider and health care involved, malpractice, but for all victims of medical all health providers, public. injured, patient care and the After a severely permanently, sometimes a medical mal- practice pits patient lawsuit the unfortunate and the patient's family against provider the health care patient family previously placed whom had Physicians their trust. have contended that since early- Century to mid-Nineteenth there has been a pitting physicians against medical crisis injured patients attorneys.9 and their Doctors, Struve, generally See T. Adversary Catherine System, Liability and Procedural in Medical Litigation, Reform only at Emotion is not the force work Money is at stake for actions. medical public. including everyone In the involved, case groups representing malpractice, interest ev- heavily aspect delivery ery health are of the care *14 sampling lobbying legislature. in the A of the involved hospital groups associations, insur- interest includes patient companies, associations, doctor and nurse ance lawyer Despite advocates, cir- and associations. these medical mal- cumstances, task of the court in a any practice as in other case: action is same of a fair and neutral evaluation of merits conduct arguments light parties' in of the state's laws and constitution. argument, in his and oral 16. Both briefs at all asks court to strike down
Matthew Ferdon
this
damages
statutory caps
in medical
on noneconomic
chapter
malpractice
This court has
actions under
damages
per
statutory limitations on
are
not held that
recently
Indeed, this
has
court
se unconstitutional.10
wrongful
damages
upheld
on noneconomic
(2004) ("
943,
physician conse
'[T]he
Fordham L. Rev.
952
72
chains, being
exposed to
perpetually
art in
quently practices his
reputation
his
may
a
ruin his
as well as
risk of
suit which
Jurisprudence
Medi
Ordronaux,
(quoting John
fortune."
of
Torts,
Evidence,
Contracts,
cine,
and
its
to the Law
in Relations
Drugs 58
Supplement
on
Liabilities
Vendors
with
(1869)).
10
Hall,
28,
WI 100,
208,
2d
682
Maurin v.
2004
274 Wis.
(Abrahamson, C.J.,
Crooks, J., concurring).
866
N.W.2d
damages
tort suits
upheld
has
limitations
This court
City Brookfield,
See Sambs v.
governmental
against
entities.
denied,
(1980),
cert.
U.S.
356,
449
2d
12Some state courts have reached the conclusion that caps See, Olson, are e.g., 125, unconstitutional. v. Arneson N.W.2d (N.D. 1978) (holding statutory cap of on all medical malpractice damages equal protection); as a violation of Moore v. (Ala. Ass'n, 1992) Infirmary Mobile So. 2d 165-71 (holding cap on noneconomic equal
action violated the protection right jury trial guarantees Constitution); Usitalo, of the Brannigan Alabama v. (N.H. Maurer, 1991), 587 A.2d aff'g 1234-36 v. Carson (N.H. 1980) (holding *15 A.2d 825 damages a noneconomic cap in malpractice medical actions unconstitutional as violation of the Constitution). equal protection Hampshire clause the New Other states have caps damages found on noneconomic constitutional, See, oftentimes strong e.g., over dissents. Judd v. (Utah 2004) 135, Drezga, 103 P.3d 141 (examining articles and determining studies and that the cap reasonably was related to making malpractice and health insurance rates afford able and damage caps help that noneconomic did that achieve if goal, only Judd, even in small part), but 103 at see P.3d 145 C.J., (Durham, Zdrojewski dissenting); v. Murphy, 657 N.W.2d (Mich. 2003) 721, App. 737-38 Ct. on (cap damages noneconomic upheld among against, challenges, equal other protection an challenge), Zdrojewski, but see (Fitzgerald, RJ., 657 N.W.2dat 739 Wiley dissenting), Henry v. Cottage Hasp., Ford 668 N.W.2d (Mich. 2003) 402, App. (holding Zdrojewski's 416 Ct. deci regarding constitutionality sion caps of the was incorrect and should be overruled but that the court was bound to follow Zdrojewski's Echarte, precedent); Univ. Miami v. So. 618 2d
590 is as follows: to this roadmap opinion 18. The ¶ 23) (¶ 19 to I. The facts 28) (¶ 24 to malpractice
II. statutes The medical 56) (¶ III. Decisis 29 to ¶ Stare Equal
IV Protection (¶ 80) scrutiny to ¶
A. The level of 59 84) (¶ 81 to ¶ B. The classifications 96) (¶ legislative objectives The 85 to ¶ C. 176) (¶ The 97 to ¶
D. rational basis 183) (¶ 177 to V Other Statutes 188) (¶ 184 to ¶ VI. Conclusion 1993) (Fla. 189, 191 constitutionality of noneconomic (upholding Echarte, actions), 618 damages but see cap medical (Barkett, C.J., Fein Permanente Med. dissenting); 2d v. So. at 198 (Cal. 1985) cap noneco- (upholding on Group, P.2d 684 due against in medical actions nomic Fein, but 695 P.2d at equal challenges), see process protection Edmonds, (Bird, C.J., dissenting); Murphy A.2d v. (Md. 1992) Maryland's (upholding 114-16 against equal protection damage personal injury awards cap on (Chasanow, J., at 120 challenge), Murphy, but 601 A.2d see dissenting). 2-2 in Evans ex rel. Supreme divided The Alaska Court (Alaska Alaska, 2002), justices P.3d with two
Kutch v. damage on all tort claims consti finding the noneconomic finding caps unconstitutional. and two tutional rulings Kevin J. caps, see For of state court discussions Gfell, Note, Implications and Economic Constitutional Malprac- Damages in Medical Cap on Non-Economic National *16 Crocca, Actions, (2004); Carol A. 37 Ind. L. Rev. 810-14 tice Construction, State Annotation, Validity, Application and of Recovery in Medical Limiting Amount Statutory Provisions of (1995). Claims, 5th 245 26 A.L.R. Malpractice
I. FACTS According produced ¶ 19. to evidence at trial that jury apparently accepted, the ing as the doctor was deliver- pulled Ferdon,
Matthew the doctor on Matthew pulled The Ferdon’s head. manner in which doctor injury plexus palsy. an caused called obstetric brachial injury, right As a result of this Matthew Ferdon's arm is partially paralyzed and deformed. Matthew Ferdon surgeries occupational therapy; underwent and aas injury, surgery therapy result more and more will required. right be Matthew Ferdon's arm will never normally. function Through guardian
¶ 20. litem, his ad Vincent brought negligence Petrucelli, Matthew Ferdon claims against hospital. the doctor and the Fund, The as required, was named as a defendant.13 Matthew parents, Cynthia Ferdon's and Ferdon, Dennis also brought negligence seeking claim, to for recover loss society companionship. jury delivery A found the negligent injuries doctor for the Matthew Ferdon sus- during tained the birth. jury following 21. The awarded the to (1) hospital
Matthew Ferdon: Future medical and ex- (2) penses: personal $403,000; Past and future (noneconomic injuries damages): jury $700,000. The made no award Matthew for Ferdon loss future earning capacity. jury Cynthia $87,600 awarded compensation personal and Dennis Ferdon as for the they age care render will until Matthew of 18. Strykowski Wilkie, State 491, 500, ex rel. v. 81 Wis. 2d (1978) ("Malpractice N.W.2d 434 seeking claimants damages in defendant, excess must name the as a fund and the action."). may appear against fund and defend *17 verdict, cir- 22. After the the Fund moved the $700,000 the award injury cuit court to reduce personal $410,322, $350,000 cap amount of the (adjusted to the inflation) in a on noneconomic recoverable damages §§ action Stat. 655.017 medical under Wis. 893.55(4)(d). to Further, the Fund moved have the and and exceed- expenses for future medical hospital award control $100,000 placed pursuant under Fund's ing § Stat. 655.015. to Wis. mo- 23. The court the Fund's granted circuit award to the
tions, reducing damage the noneconomic and $410,322 ordering amount of statutorily limited $168,667.67 hospital that of the future medical Mat- be into the reimbursement fund.14 paid expenses summarily Ferdon the court of appeals thew appealed; $168,667.67 portion of the The amount of reflects $100,000 attorney left fees are taken over that is after award jury's expenses. future The overall out of the award for medical necessary to jury amount the felt was of is the award to expenses, future medical reduced pay Matthew Ferdon's present determine the jury value. The was asked to present Stat. expenses required future Wis. as value 893.55(4)(e). present their value be § are reduced to Awards today may worth more than the lump sum received be cause years. Section spread period out over a amount same 893.55(4)(e) provides: bodily injury damages under 655 for or Economic recovered ch. death, including proceeding any contribution or action or based on indemnification, period during be determined for the which shall accrue, taking expected into to account are person, present expectancy life of the then reduced estimated value, taking inflation. into account effects of years that Ferdon was six jury was informed Matthew award old, expectancy years, of 69 that he had life and the effect take into account economic conditions should value, jury was instructed present respect inflation. With reading affirmed the circuit court its based on State Strykowski rel. ex v. Wilkie15and Guzman v. St. Francis Hospital, Inc..'16
II. MEDICAL MALPRACTICE STATUTES *18 injury resulting ¶ Wisconsin, In a claim for malpractice by provider from medical a health care is subject provisions chapter Chapter to the of 655.17 655 provides procedures "prosecution the exclusive for the against provider."18 of claims a health care Among damages available to a claimant are noneco- their that award should be present reduced to value "because a today sum received can money be invested and earn at current interest rates."
From expenses, award for future medical it appears $134,333.33 (amounting the amount of to one- third) was earmarked as "an amount pay sufficient to the cost of collection, including attorney present fees reduced to value" as by 655.015, § required leaving $268,666.67. a balance of Section requires $268,666.67, $100,000 655.015 that of the go is to Ferdon, Matthew with the remainder deposited into an account payment with Fund for expenses future medical consis- § tent with § 655.015 and Wis. Admin. Code Ins 17.26. 15 Wilkie, Strykowski 491, State ex rel. v. 81 Wis. 2d 261 (1978).
N.W.2d434
16 Inc., Guzman v. St. Hosp., 21, Francis 2001 AppWI 240 559, 2dWis. 623 N.W.2d776. 17 ("On § July 1975, Wis. Stat. 655.007 and any after patient or patient's representative having any claim or spouse, parent, sibling minor patient or child having for injury derivative claim or death on account of malpractice is subject chapter."). Strykowski Wilkie, to this See v. 81 Wis. 2d (1978). 491, 499, N.W.2d (internal Maurin, 274 Wis. 2d quotations ¶ omit ted). including damages compensate damages, for nomic enjoyment suffering, pain distress, loss of and mental activity, society companionship.19 and normal loss pay created to medical mal- 25. The Fund was primary practice insurance that exceed thresh- claims primary malpractice statute. olds established coverage $1,000,000 for each occurrence and providers per policyyear.20 care must $3,000,000 Health Although participate dam- in the noneconomic Fund. liability provides ages capped, the unlimited are Fund damages exceeding primary coverage economic limits.21 a claimant recover Should malpractice injury,
damages a medical as a result of statutorily pursuant capped to Wis. are those 893.55(4) §§ $350,000, at a sum to be 655.017 Stat. adjusted annually to reflect inflation. reads as follows: 27. Section 655.017 *19 damages. The amount on noneconomic
Limitation by a or damages recoverable claimant of noneconomic or omissions of a chapter this for acts plaintiff under or provider if the act or omission occurs health care damages defined in Wis. Stat. are "Noneconomic" 893.55(4)(a). That reads: § subsection (4)(a) moneys damages" subsection, "noneconomic means In this humiliation; suffering; em- compensate pain and
intended to for distress; dis- barrassment; worry; effects of noneconomic mental activities, ben- ability including enjoyment normal of the loss of health, physical pleasures loss of mental or of life and efits and functions; consortium, society bodily well-being loss and of or companionship; and affection. or loss of love 655.23(4)(b)(2). § Wis. Stat. Committee, Audit, An Audit Legislative Joint 2003-2004 (Office Fund Compensation Injured Patients and Families 2004) Insurance) (Oct. 3, at Commissioner May 25, 1995,
after and for acts or omissions of an employee provider, acting of a health care within the employment of his scope providing or her and health services, care for acts or occurring omissions on or after 25, May 1995, subject to the limits under s. 893.55(4)(d) (f).22 and § The financial limits which 655.017 re- are 893.55(4)(d), § fers contained Wis. Stat. which reads as follows: (d) The limit on total damages for each (b) par. May
occurrence under on or after adjusted shall be by shall be the director of state courts reflect changes price the consumer consumers, city index all average, urban U.S. as by labor, determined U.S. department at least thereafter, annually adjustment with the to apply limit subsequent adjustments. to awards to such do parties dispute not the instant case the inflation-adjusted authorized Wis. Stat. 893.55(4)(d) § $410,322. was
III. STARE DECISIS that, 29. The Fund's first assertion is under decisis, doctrine stare prior cases of both this court and the court of this appeals bind court in the present case. 893.55(4)(f) § wrongful Wisconsin Stat. deals with death
actions. This subsection reads as follows: (0 Notwithstanding the limits on noneconomic under this subsection, damages against providers recoverable health care employee provider, acting scope an of a health care within the of his *20 employment providing services, wrongful or her health care 895.04(4). subject are damages death the to limit under s. If 895.04(4) found, of the excess limit under s. are shall court make
any required reduction under s. and shall 895.045 award lesser 895.04(4). of the reduced amount or the limit under s.
596 ¶ decisis, or doctrine "stand 30. The of stare things normally compels a to decided,"23 court follow its prior "Fidelity precedent ensures that decisions. existing lightly."24 law not be abandoned We have will applica- decisis not mechanical that stare stated inexorably tion, nor is it a rule to be followed.25 inapplicable doctrine decisis is 31. The of stare Although appellate decisions here. have Wisconsin constitutionality of the treaded close to recovery malprac- in medical of noneconomic cases, has central to the tice none reached issue including prior cases, Nevertheless, case. instant provisions equal protection challenges to various chapter 655, inform our decision. begin Strykowski, with the earliest case 32. We challenge addressing chapter 655.26
from this court group petition- chapter enacted, a after 655 was Soon challenged grounds, chapter includ- 655 on several ers ing equal challenged
protection.
petitioners
a sub-
panel
that made a formal review
available
classification
request
party
of either
to medical
at the
made a
$10,000,
if the
exceeded
but
review
action
claim
only upon
panel
for a claim under
available
parties.27
stipulation
This court reasoned that
of both
legislature could conclude that because claims over
23
Co.,
23,
n.13,
Brewing
Miller
2001 WI
16¶
Mackenzie v.
700,
241
2d
$10,000 more a formal be review may appropriate be a more initial forum. This court was recognize legislative findings28 careful to that the 1975 problems special that medical raised differ- binding actions, ent from in other those tort "while not great carr[ied] weight."29 court, Strykowski aspect 33. addressed a different chapter in 655 than that involved the instant case. Strykowski equal protection challenge an involved panels. the formal review This case concerns implemented cap $350,000 constitutionality 1995, in not the overall chapter equal Therefore, protection challenge Strykowski in was to different that in classification than at issue the instant case. equal protection Strykowski Thus, the discussion of in helpful, controlling, resolving is not much in less facing present in issue us case. Although chapter
¶ 34.
as
655
enacted contained
cap
damages,
cap
go
on noneconomic
that
did not
into
contingency.
effect until
and even
1979
then was a
cap adopted
provided
in 1979
be
awards would
per
limited to
incident if the
fell
Fund's assets
below certain levels.30Because the
was not
effect
Strykowski
being
at the time
was
decided and therefore
petitioners'
had not
recoveries,
affected
the court
constitutionality
declined to address the
of the
equal protection challenge.31
the face of an
¶ 35.
recent
Hall,
Our
decision in Maurin v.
2004
similarly
100, WI
2d 28,
866,
Wis.
N.W.2d
does
present
not
Maurin,
control the
case. In
this court
28 §
ch.
Laws of 29Strykowski,
30Id. at 500.
31Id. at 511. protection challenge rejected equal to the noneco- an damages cap wrongful death actions.32 nomic challenge provi- involved a to the 36. Maurin specifically chapters that are sions wrongful death medical concerned with *22 (Wis. 893.55(4)©). § case, a common This actions Stat. equal malpractice case, raises different law medical legislative objectives challenges. protection Different wrongful play in death action because are at a noted victim is dead. As damages cap majority in Maurin, in the noneconomic assuage "implemented wrongful to death cases was wrongdoer high passion run where the fears 'that would damage huge awards would be death and that causes "33 wrongdoer.' heightened passion imposed on the surrounding malpractice victim is not at a dead medical And while in Matthew Ferdon survived. issue this case. tragic, they pale injuries are indeed Matthew Ferdon's five-year-old Shay comparison Maurin's death and in likely passion in the same therefore not as to arouse are jury. equal protection away ¶ turned an 37. This court Hospital, Czapinski challenge Inc.34 v. St. Francis wrongful caps Czapinski Maurin, dealt with Like The court held that actions. death medical "[section] wrongful actions, death in the context of 893.55(4)© protection equal clause not violate the does Constitution."35 of the Wisconsin 32Maurin, 28, 105-09. 274 Wis. 2d ¶¶ 33 Id., 106. Inc., 2000 WI Hosp., v. St. Francis Czapinski 26-32, 236 Wis. 2d N.W.2d ¶¶ 35Id., 2.¶ petitioners Czapinski challenged 38. The classification not at issue this case. The classifica- challenged tion was the distinction between how adult claimants were treated and how minor claimants were society companionship treated for loss of of a parent malpractice.36 who died as a result of medical recovery; Adult children were denied minor children recovery. were entitled to discussing In the classification the court
explained that "the distinction between adult children degree and minor children could be the different dependency presumed which each would be to have on parents their for their continued financial and emo- "[fjaced support."37 Notably, tional when with the need society draw the line on who can collect for loss of companionship, availability . . . the . claims . . should be limited to those who would suffer most severely family from the loss of an intimate relation- ship; adult children cannot be included in this classifi- *23 cation."38
¶ cap 40. The damages $350,000 on noneconomic exactly opposite at issue here has the effect as the Czapinski. cap classification in $350,000 limits the claims of those who can least it; is, afford that the including those, claims of children such as Matthew greatest injuries. Ferdon, who have suffered the ¶ appeals 41. A recent court of decision, Guzman Hospital, App v. Inc., St. Francis 2001 21, WI 240 Wis. strong precedent. 559, 2d 776, 623 N.W.2d is not While 36 ¶ Id., 30. omitted). (quoted Id,.,¶ 31 source 38Id. case, the same as the instant the court of
the issue is controlling appeals' opinion particularly nor is neither compelling.
¶ Guzman, In the circuit court held that the damages cap on noneconomic was unconsti- violating tutional as right both the Wisconsin constitutional by jury powers separation trial and the to granted petition bypass doctrine. We appeals.39 the court of supreme equally, 3-3, in 43. The court divided participating. Guzman, with Justice David not Prosser bypass majority no The order to was vacated40 because justices agree affirm or could on whether to reverse holding statutory cap in the circuit court order the Wis. 893.55(4)(d) §§ 655.017 and unconstitutional. The Stat. appeals, to the court of which declared case returned cap constitutional. judges ¶ 44. Each of the three on the court of separate opinion. Only appeals panel authored a one of judges appeals supported the con- the three court of stitutionality damages cap. judge, opinion, lead concluded 45. One on noneconomic Wis. Stat. 893.55(4)(d)
§§
He
655.017 and
was constitutional.
justified
a health-care crisis
declared that whether
legislature's responses
an
to be made
was
assessment
by
legislature,
He further con-
not the courts.41
right
a trial
that the
did not violate the
cluded
(Wis. Const,
5),42
right
remedy
§
jury
I,
art.
to a
§
Wis. Stat.
809.60.
Inc.,
3, Hosp.,
v. St. Francis
2000 WI
Guzman
2d
42Id, 7-12. ¶¶
601 Const, (Wis. 9),43 § wrongs I, art. substantive due separation powers.45 process,44 doctrine of the concurring judge "reluctantly" joined ¶ 46. The concluding majority opinion, that "the statute barely passes constitutional muster" that she could legal supports precedent not overturn legislature's action.46 dissenting judge
¶ would struck 47. The have cap I, 5, as a violation of Article Section down right jury to a trial. opinions
¶ Guzman, 48. None of the three cap however, on non- addresses whether economic equal violates the state constitutional guarantees. protection equal protection challenge, ¶ 49. In their the Guz- argued that the mans classifications created scrutiny. They using should be reviewed strict did not address whether the survived review under the appeals' opinion The rational basis test. court of lead appropriate ruled that the rational basis test was the "[t]he level of review and concluded that Guzmans' silence on the rational-basis test is a concession that the cap passes that test."47 agree reasoning.
¶ "A 50. We do not with this party's concession of not law does bind court."48 43 Id.,
44 Id.,
22-25.
¶¶
45 Id.,
13-17.
¶¶
46 Id.,
47
Inc.,
v.
Hosp.,
Guzman
St. Francis
21,
App
2001 WI
240 Wis. 2d
lead further stated that because the Guzmans argue caps did not that the lacked a rational basis, the judge would not address that issue.49 Thus the lead opinion, only opinion equal protection to address directly, cap passed did not decide whether the rational basis test.
¶ provides 51. opinion Guzman therefore no equal protection challenge accordingly has no precedential vitality equal protection. as to Further- separate opinions, only more, with three one of which supports constitutionality cap, of the Guzman is not strong precedent any proposition.
¶ 52. In Martin Richards,50 v. the court deter- application mined whether a retroactive of the cap $1,000,000 on noneconomic process; directly
cases could violate due it did not constitutionality determine the of the noneconomic damages cap.51 53. The court's discussion of the in Martin is
relevant to the instant case. The court concluded that
application
negli-
retroactive
of the
would have a
49 Guzman,
2dWis.
Richards,
Martin v.
192 Wis. 2d
51 Id. at 212.
Martin involved a
process challenge
substantive due
to the
application
cap.
retroactive
of a
Equal protection analysis and
process
substantive due
have much in common. Under substan
process analysis
tive due
the statute must bear a rational
relationship
legislative
to a reasonable
goal. Under equal pro
analysis
tection
there must be a rational
relationship between
disparity
in treatment
resulting under a statute
and a
legitimate
governmental
objective. Estate Makos v. Wis.
Fund,
Masons Health Care
41, 75,
211 Wis. 2d
gible of health care the state.52 effect on the cost although the claim is that noneco- court observed implemented prevent damages caps nomic increasing were costs associated with supported by actions, "in court these assertions are this paucity of evidence."53 In v. this court held that Rineck Johnson,54 *26 damages cap on noneconomic then-$l,000,000 cap superseded the lower medical actions wrongful the death resulted death statute where malpractice.55 court did not address from medical This constitutionality malpractice cap. the medical Casualty ¶ Paul Fire & Insur- In Jelinek v. St. expiration Co.,56 court held that after the ance this recovery cap in of noneconomic $1,000,000 1991, involving damages in actions death did not determine the was unlimited.57 This court constitutionality cap. of a examination 56. Each of these cases informs our controlling. case,
in the instant but none is EQUAL PROTECTION IV next examine Matthew Ferdon's asser- 57. We damage that the on noneconomic awards vio- tion 52Martin, 2d at 192 Wis. 203-04.
53Id. at 203.
54
Johnson,
2d
Rineck v.
155 Wis.
N.W.2d
(1991).
denied,
(1990),
55Rineck, 155
2d at 666-68.
Wis.
Co.,
2d
Jelinek v. St. Paul Fire & Cas. Ins.
182 Wis.
(1994), superseded by
Czapin
statute as stated in
N.W.2d 764
ski,
57Jelinek, 182 2d at 12. Wis. equal protection guarantees lates the of the Wisconsin Constitution. interpretation
¶ 58. The of the Wisconsin Consti- constitutionality tution and a determination of the ordinarily questions a statute are of law that this court independently determines of the circuit court and appeals, benefiting analyses. court of but from their Scrutiny A. Level of deciding challenge In Matthew Ferdon's equal on noneconomic
protection grounds, our first task is to determine the appropriate judicial scrutiny applied level of to be determining constitutionality. parties disagree
¶ 60. The about which level of judicial scrutiny apply should in this case. Matthew scrutiny Ferdon invites this court to use the strict *27 reviewing statutory cap. standard argues the $350,000 He damages cap implicates that the noneconomic the right by jury right fundamental to a trial and the a to remedy protected by the state constitution. The Fund argues scrutiny that strict is unwarranted and that the proper level of review is rational basis review. scrutiny applies challenged 61. Strict if a statute equal protection grounds "impermissibly interferes right operates
with the exercise of a fundamental
or
to
peculiar disadvantage
suspect
the
of a
If
class."58 strict
58
Annala,
State v.
453, 468,
168 Wis. 2d
605 case, the Fund the instant scrutiny applied were $350,000 showing have the of that would burden medical mal- on noneconomic caused cap governmen- a compelling tortfeasors practice promotes is the least interest and that tal Fund is, means so. That would doing restrictive to precisely that is tailored serve have to show a interest. state compelling strict al- scrutiny sparingly, 62. Courts apply at least one state court has used strict
though
level of review medical
cases.59
scrutiny
an
courts have
inter-
applied
63. Several state
level of
in medical
scrutiny
caps
mediate
the classification
Under intermediate
scrutiny,
cases.60
and
important
governmental
objectives
"must serve
of
related to achievement
those
substantially
must be
(Ariz. 1984)
Hammer,
Kenyon
688 P.2d
973-74
See
v.
(the
remedy
importance
a
a matter
since the
right to
was
of
early days
scrutiny
state's
statehood
therefore strict
was
appropriate).
(N.H.
See,
Mauer,
e.g.,
830-31
Carson v.
A.2d
1980) (holding
right
remedy
to a
an "important
right"
scrutiny);
an
level of
requiring
substantive
intermediate
1978)
(N.D.
Olson,
125, 132-33
(applying
Arneson v.
270 N.W.2d
scrutiny
a
heightened
capping
level
statute
economic and
require
correspondence
a
damages to
"close
be
statutory
legislative goals");
v.
tween
classification
Judd
2004)
(Utah
(holding
challenge
that a
Drezga,
606
objectives."61
applied an
This court has
intermediate
scrutiny
prior
level of
on at least one
occasion.62
party
present
argued
¶
Neither
in
case has
apply
that we should
the intermediate level of review.
agree
¶
We
basis,
with
Fund that rational
scrutiny,
scrutiny
appropriate
not strict
is the
level of
in
present
case.63This court has
that
Stat.
stated
Wis.
chapter
deny any
right
655 does not
fundamental
suspect
involve a
does not
classification.64 In the con-
wrongful
malpractice actions,
text of
death medical
this
previously
"Mapping
court has
held that
wrongful
any
death
does not violate
funda-
,"65
right.
Similarly,
examining
.
mental
.
in
whether
appointment
compensation panels
of six-member
effectively
suing patients
denied
courts,
access
thereby violating
rights
jury
preserved
their
to a
trial as
I,
Constitution,
Article
Section
of the
5
Wisconsin
chapter
this
held
court
655 did not involve funda-
61
Boren,
(1976)
Craig v.
190,
U.S.
(applying
429
197
inter
classification).
scrutiny
gender-based
mediate
a 62
Arreola,
See Brandmiller
v.
528,
2d
199 Wis.
544 N.W.2d
(1996)
(applying
scrutiny
intermediate
level of
to determine
cruising
whether
restrictions
ordinance on
in cars were
interests).
narrowly
significant government
tailored to serve
63 Maurin,
C.J.,
28,
(Abrahamson,
274 Wis. 2d
Crooks, J., concurring)
(constitutionality
on noneconomic
case).
damage
wrongful death
award
Czapinski,
Strykowski,
316,
28;
236 Wis. 2d
81 Wis. 2d
(1978).
491, 507,
mental
right
"[t]his
never
the
9,
court has
construed
I, Section
remedy provision]
[to
to be fundamental."67
a
¶
not
minimize
66. This
is meant to
the
discussion
jury
right
importance
right
of
to a
and the
to a
the
rights.
remedy;
important
Nevertheless, in
both are
the
equal
challenges
protection
to medical mal-
context of
provisions,
practice
has
these
this court
not viewed
two
guarantees
belonging
the class
as
to
of
constitutional
scrutiny.
rights warranting
basis
strict
The rational
level
scrutiny
applied
present
case.
therefore
the
person challenging
equal
¶
A
a statute
grounds
protection
level of
under
rational basis
overcoming
pre-
scrutiny
heavy
bears
burden
constitutionality
sumption of
afforded statutes.68 Stat-
constitutionality
presumption
utes are afforded the
"[bjecause
embody
social,
economic,
and
statutes
legislature
political
. . . ."69
decisions entrusted
longstanding
¶ 68. The
rule
this
set forth
court
legislative
presumed constitutional,
"all
are
is that
acts
heavy
placed
party challenging
on the
burden is
66
491, 506-07,
Strykowski,
2d
68
Fund,
LaBarge
Comp.
Aicher ex
v. Wis.
rel.
Patients
2000
98,
18-19,
99,
2d
613
WI
237 Wis.
N.W.2d 849.
¶¶
69 Maurin,
Aicher,
93. See
also
2d
2d
Wis.
Wis.
("[T]he
positioned
economic,
judiciary
is not
to make the
social,
political
province
that fall
decisions
within
Sambs,
legislature.");
(legislature
Wis. 2d at 377
evaluates the
competing
exposure
liability
and balances
risks
interests
injury).
the need to
individuals
compensate
constitutionality,
any
if
and that
doubt exists it must be
constitutionality
resolved
favor of the
of a statute."70A
challenger must demonstrate that a statute is uncon-
beyond
stitutional
a reasonable doubt.71
legislative
Nevertheless,
when a
act unrea-
sonably
rights guaranteed by
invades
the state constitu-
*30
only
power
duty
tion, a court has not
but also the
Although
strike down the act.
we do not address Ferdon's
challenges
(right
constitutional
under
I,
Article Section 5
trial)
jury
(right
remedy),
ato
and Section 9
to a
damages may implicate
on noneconomic
rights.
respect
these constitutional
short,
In
"neither our
legislature
presumption
for the
nor the
of constitution-
ality
judicial acquiescence
allows for absolute
to the
legislature's statutory enactments."72The court has em-
phasized
Marbury
"[s]ince
Madison,
that
v.
it has been
70 Sambs, (citing Stanhope,
2d
Wis.
at 370
The constitutionality
law,
of a statute is an issue of
not fact.
"beyond
The
proof'
is,
reasonable doubt burden of
language
however,
evidentiary
proof
reminiscent
an
burden
crimi
beyond
nal cases. The
a reasonable
proof
doubt burden of
in a
challenge
constitutional
case
gives great
means that a court
legislature,
deference
degree
to the
and a
certainty
court's
unconstitutionality
about the
persuasive
results from the
force of
Grover,
See
legal argument.
Davis v.
501,
13,
166 Wis. 2d
564 n.
(1992) (Abrahamson, J.,
recognized peculiarly province say constitution what judiciary interpret law is."73 court, in other state decisions this
courts, and in the United States Court have Supreme on the basis of judicial equal protec- review expressed tion in a of iterations.74 Cases within a variety single views on the jurisdiction expressed divergent have must be stated clarity legislative purpose with which and on the of deference afforded the degree legislature in suiting means to ends.75 court often the United quoted 71. This has Court's articulation of the rational Supreme States basis test set forth in McGowan v. as follows: Maryland76 Equal permits Protection the States a
[The
Clause]
scope
enacting
of discretion in
affect
wide
laws which
groups
differently
some
of citizens
than others. The
safeguard
only
constitutional
is offended
if the classifi-
grounds wholly
cation rests on
irrelevant
to the
objective.
legislatures
achievement of the State's
State
*31
presumed
are
to have acted
their
within
constitutional
despite
that,
practice,
power
the fact
their laws
inequality.
statutory
result in some
A
discrimination
any
reasonably may
not be
if
will
set aside
state of facts
justify
be conceived to
it77
73
429,
Thompson,
State ex rel. Wis. Senate v.
144 Wis. 2d
(1988) (citation omitted).
436, 424 N.W.2d385
74
466,
County Portage Steinpreis,
See
v.
104
2d
487
Wis.
(1981)
n.4,
(Abrahamson, J., dissenting).
312 N.W.2d731
75
(Abrahamson, J., dissenting);
Id. at 487 n.4
Schweiker v.
(1981)
Wilson,
221,
(Powell, J., dissenting).
U.S.
450
243
76
(1961).
Maryland,
McGowan v.
77McGowan,
610
¶
that the rational basis
72. The court has written
protection
equal
in the
context does not
standard
identically,
require
all individuals be treated
but
purpose
any
moti-
distinctions must be relevant to the
Similarly
vating
individu-
the classification.78
situated
similarly.79 essence,
treated
In
the rational
als should be
any
are
real differ-
standard asks "whether there
basis
distinguish the favored class. .. from other
ences to
ignored
...
."80
. . . who are
the statute
classes
against
equal
upheld
¶
A
an
statute will be
challenge
plausible policy
protection
if a
reason exists
is not arbi-
for the classification and the classification
legislative goal.81
trary
A statute will
in relation to the
to be
if the statute is shown
be held unconstitutional
arbitrary"
relationship
"patently
"no rational
with
See,
State,
6, 19,
(1987).
omitted).
Doering, 193 Wis.
(quoted
2d
131 n.11
source
at
81 Maurin,
106; Doering,
611 challeng- legitimate government party interest."82 The demonstrating ing the classification has the burden of arbitrary irrationally and dis- that the classification is criminatory. evaluating legislative
¶ In a 74. whether classifi- rationally legislative objective,83 advances the cation obligated inor, alternative, "we are to locate con- might legis- influenced the struct a rationale that have lative determination."84
¶
Qnce
75.
the court identifies
rational basis for
legislature passed
statute,
the court must assume the
"[a]ll
necessary
basis,85
the act on that
facts
conclusively
sustain the act must be taken as
found
legislature,
any
may
reasonably
if
such facts
be
in the mind of the court."86
conceived
require
¶
The rational
not
76.
basis test does
legislature to choose the best or wisest means to achieve
goals.87
if
its
Deference to the means chosen is due even
(citations omitted).
82 Maurin,
28,
274 Wis. 2d
106
¶
83
Knoll,
58, 65,
2d
Treiber v.
135 Wis.
lature acquiesce require a court to the constitu- utes do not every tionality not, A court need and should statute. legislature. blindly accept For not, the claims of meaning, any judicial rational to have review under basis scrutiny, thought- meaningful be a level of there must only legislative purpose, of not but ful examination legislation relationship and the between also "probe purpose. The court beneath the claims must government if the constitutional 're- to determine rationality quirement in the nature of the class of some singled has been met."89 out' "not a toothless The rational basis test is teeth," sometimes referred
one."90"Rational basis with legislative bite," with focuses on to as "rational basis 88 Aicher, 99, 2d 237 Wis. 89 Strange, v. Doering, James (quoting 193 2d at 132 Wis. (1972)). 128, 407 U.S. 140
90
("the rational basis test is 'not
Doering,
with [Rational teeth] basis with does not take issue with heightened scrutiny tiers of "strict" and "intermediate" Instead, solely appropriate it is addressed to the review. tier, intensity of review to be exercised when the lowest review, rationality appropriate.... that of is deemed asks is that [rational model] What the basis with teeth put scrutiny, into that level of some teeth be lowest bite," applied focusing it "with on means without be legislative (Evaluating impor- second-guessing ends. higher tance of the ends is characteristic of all levels of short, scrutiny.) [rational raises] In basis with teeth tier under the two- or slightly the lowest of review models; the "mere three-tier but it does not seek to raise run-of-the-mill eco- rationality" appropriate level way up to the level of regulation cases all the nomic scrutiny.95 "intermediate" or of "strict" called ratio- scrutiny the level of 80. Whether ratio- teeth, meaningful basis with or basis, nal rational *35 now in this case. basis, apply nal it is this standard we Note, Lynn Pettinga, Basis With Bite: Gayle Rational Name, 779, Scrutiny By Any Other 62 Ind. L.J. Intermediate (1987). (11th Law, Gunther, 605 n.5 ed. Gerald Constitutional added). 1985) Tribe, American Consti (emphasis See Lawrence (2d 1988) Law, 16-3, (suggesting open § at 1445-46 ed.
tutional only quasi-suspect classifi rational basis with bite when use of issue, may there be noting "[w]hile also cations are at but categories new proliferate the reluctance to grounds triggering scrutiny, its covert use overtly closer classifications dangers of its rationality presents label under the minimum own.").
B. The Classifications 81. The task of drawing lines, that is the
¶ task of classifications, is a creating legislative one in which neither possible "is nor perfection necessary."96 The determine goal is to court's whether the classification rationally scheme advances the legislative objective. In limiting noneconomic damages in medical malprac- tice actions, 893.55(4)(d) §§ Wis. Stat. 655.017 and together create a number of classifications and sub- classifications.97 One main classification is relevant the present case, and one sub-classification is impli- cated: 82. The main classification is the distinction
between medical malpractice victims who suffer over
$350,000 in noneconomic damages, and medical mal-
96Estate
v.
Fund,
Wis. Masons Health Care
of Makos
(1997)
41, 75,
Wis. 2d
practice $350,000 than who suffer less non- victims damages. cap is, That economic divides universe injured into a of victims class severely severely injured injured vic- victims and less Severely injured $350,000 victims with more than tims. damages only part of in noneconomic receive their severely damages; injured $350,000 victims with or less damages their full dam- less noneconomic receive statutory ages. cap words, a In other creates class compensated partially compensated fully victims cap's greatest impact falls Thus, the on the victims. severely injured victims.98 most part ¶ 83. A main sub-classification is created as damages. single cap A $350,000 noneconomic applies to all victims a medical occurrence regardless Because of the number of victims/claimants. bodily damages recoverable the total noneconomic may injury limit for or death not exceed patient's occurrence, the total for a claim for each award (such suffering pain, as and dis patient's spouse, ability) claims minor and the of the companion society parents children, for loss of or ship of victims $350,000.99Thus, cannot exceed classes patient depending has a created on whether the are injured patient parent. spouse, children, An minor or a single may $350,000, entire recover the while who injured patient his her with or married shares injured patient spouse; children with non-married Report Compensation Patients Fund to Joint Wisconsin Special Committee Legislative (prepared Committee Audit (June 13, Governors), Summary, Executive at 14 of the Board of 1994). 893.55(5). 655.007, §§ See Wis. Stat.
shares the $350,000 with the children; a married in jured patient with children shares the cap with the and spouse children. 84. With these classifications in mind, we turn to
the legislature's objectives for enacting on noneconomic damages in medical malpractice actions. C. Legislative Objectives. Identifying the legislative objectives will al-
low us to determine whether the legislatively created classifications are rationally related to achieving appro- priate legislative objectives.100 86. Although the legislature did not explicitly state objectives such, its as it made a number of findings when it enacted 655.101 chapter These findings give a strong indication of the legislature's objectives. The findings can be summarized as follows:
100Doering,
101Maurin, 28, 274 Wis. 2d Appendix. Section ch. Laws of 1975 reads: (1) Legislative findings. legislature
Section 1. The finds that: (a) The damages arising number of suits and claims for from professional patient tremendously care past has increased in the years judgments several and the size of and settlements in connection substantially; therewith has increased even more Ob) judgments settlements, The effect of such frequently and based newly emerging legal precedents, has been to cause the insur- industry uniformly substantially ance to and increase the cost and availability professional liability limit the coverage; insurance (c) being passed These increased patients insurance costs are on to higher charges in the form of facilities; for health care services and (d) providing services, increased costs of health care against increased incidents of provid- claims and suits health care judgments ers and the many size of such claims and has caused liability companies completely insurance to withdraw from the insuring providers; of health care increased, Judgments and settlements have availability increasing limiting and thereby cost liability coverage;102 insurance professional malpractice pre- of medical 2. The increased costs form of passed patients are on to the miums care;103 higher charges for health provid- health care 3. Individual and institutional defensively, being practice ers are forced patient, detriment provider of the health care *38 (e) forcing rising number of suits and claims is both practice providers to and institutional health care individual provider defensively, and the to the detriment of the health care patient; (f) claims, impact health of such suits and As a result of the current protection, providers required, are often for their own care thereby diagnostic procedures patients, employ for their extensive care; patient increasing the cost of (g) and claims and effect of the increase of such suits As another may thereof, providers and care are reluctant to the costs health might provide which he certain health care services decline to injury; patient helpful, risk of but in themselves entail some (h) difficulty obtaining for health and the insurance The cost young physicians discourages discouraged providers and care has state; entering practice in this into the of medicine from (i) obtain, obtaining, high Inability cost of such and likely affect medical and and is to further insurance has affected pa- hospital the detriment of available in this state to services tients, public providers; and health care ceased, may providers (j) curtailed or or health care have Some cease, practices the nonavail- their because of further curtail or liability insurance; high professional ability or cost of (k) appears effect of such suits and [sic] It therefor that the entire provider, the working the health care to the detriment of claims is general. patient public in and the (l)(a), (b), ch.37, § 1 Laws of 1975. (l)(c), § of 1975. ch. Laws
may decline to provide certain might services that be helpful may but entail some patient;104 risk to the
4. The difficulty cost and obtaining medical discourages insurance young physicians entering from practice into the of medicine in this state may encourage health care providers to curtail or practices cease their Malpractice Wisconsin.105 in- may surers marketplace, leave the making it harder for providers health care to obtain insurance.106 "[T]he entire effect of such suits and claims is
working to the detriment of the health care provider, patient and the public general."107 In sum, the legislature found that malprac- tice lawsuits raise the cost of medical malpractice insurance for providers. to the According legislature, higher medical malpractice insurance costs, in turn, harm the public because they result in increased medi- cal costs for the public and because health care provid- ers might leave Wisconsin. The legislature also found that health care providers were practicing defensive medicine because of the rising number of claims and they might refuse to enter the Wisconsin health *39 care market. These legislative findings are not binding on the court but carry great weight.108 88. From the findings set forth when chapter 655 was 1975, enacted in we can deduce a primary, overall legislative objective and five interconnected 104 (l)(e), (f), § 1 (g), 37, ch. of Laws 1975.
105
(l)(h),
§
(i),
37,
1
(j), ch.
Laws of 1975.
106
(d),
§ 1
37,
ch.
Laws of 1975.
107
(l)(k),
37,
§ 1
ch.
Laws of 108 Strykowski,
620 adoption legislative objectives of led to damage cap on noneconomic awards. legislative objective primary, 89. The overall people quality of health care for the of ensure the to obviously legislature did not intend The Wisconsin.109 objective by shielding negligent health reach this to negligent responsibility providers for from their care major "[i]t all, is a contradiction to After actions. legislate quality hand, health care on one while on for negligent hand, statute, in the to reward the other same providers."110 capA on noneconomic dam- health care liability providers ages for health care diminishes tort of the deterrent effect tort law.111 and diminishes 109Id at 509.
110 (Kan. 1987). 1058, Engelken, P.2d Farley v. one of Accounting Office concluded that General ways problem increasing of insurance to "deal with the surest amount- that result in acts costs" is eliminate the conditions Office, Accounting malpractice. U.S. General ing to medical Action, Malpractice: Medical A Framework GAO/HRD- 1987). 87-73, (May at 12-19 (1) may disciplining removing accomplish include or Efforts to this quality providing acceptable practice physicians not an those from (2) care; physicians protecting patients from who lose their of (3) another; developing have them in hcenses in one state but programs providers management expanding risk educate acceptable quality ways dehvering concerning an of better care, minimizing possibility of future suits. health Id. at (W § 4, Page Torts at & Keeton on Law Prosser 1984) ("The prevent 'prophylactic' factor ed., ed.
Keeton 5th torts.”); in the field of quite important has ing future harm been Malpractice 'Crisis': Recent Thorpe, The Medical Kenneth E. Reforms, Health Affairs Impact State Tort Trends and the (Jan. 2004), http://content. W4-20, W4-25, at W4-24 *40 all-encompassing legislative objective ¶ 90. The is according legislative reasoning, by reached, to the ac- complishing objectives. following Legislative Objective adequate #1: Ensure compensation malpractice for victims of medical with injury legislature meritorious claims. The retained the system identifying tort as a means of health care providers practicing required who are below due deterring care standards and as a means of them and providers negligent practices. other health care from legislature obviously inju- The considers noneconomic injuries plaintiffs ries to be real compensated for which should be appropriate cases. Legislative Objective ¶ 92. #2: Enable health care charge premi- insurers to lower insurance by reducing ums size medical awards. Legislative Objective Keep #3: the Fund's providers
annual assessment health care at a low protect rate and the Fund's financial status. fewer pay, and smaller the claims the Fund must the more likely the Fund will have a flow, sound cash and the likely more the Fund will be able to lower its annual providers. assessments to health care With lower insur- premiums charged by primary ance insurers lower annual Fund, assessments health care will be more affordable to Wisconsin's citizens. Legislative Objective
¶ 94. #4: Reduce overall (by lowering malpractice health care costs insurance premiums) for consumers of health care. healthaffairs.org/cgi/reprint/hlthaff.w4.20vl ("[D]eterring sub standard care a major using rationale for a tort- liability system Also, for medical malpractice." "[r]ising claims may costs reflect a underlying negligence."). rise in *41 Encourage Objective Legislative #5: health ¶ 95. practice providers in Health care to Wisconsin. care people quality providers care for the of health ensure premiums malpractice will Lower insurance Wisconsin. leaving providers prevent from Wisconsin. health care avoiding practice goals defen- the of the of Related are retaining malpractice insurance ven- medicine and sive dors Wisconsin. designed by chapter the was sum, 96. In increasing
legislature help cost of health care limit the to "diminishing availability possible of health ... care and objective legislature's immediate The Wisconsin."112 enacting cap apparently $350,000 to ensure was liability availability insurance at a of sufficient "Taming patients. cover claims of reasonable cost to ensuring malpractice to access of medical costs legitimate legislative objec- health care are affordable cap legislative of the classification tives."113 express legis- appear malpractice to victims medical objectives: quality balancing ensure health lative of injured compensate victims of state; in the care provid- protect malpractice; health care and to medical malpractice medical insur- costs of ers from excessive ance. Basis
D. The Rational explore a rational relation- whether 97. We now legislative objective compen- ship exists between Crosse, Inc., Hosp.-La Lutheran Comp. Fund v. Patients 1997). (Ct. 49, 53, App. 2d 573 N.W.2d Wis. 113 Aicher, 2d 237 Wis.
sating fairly victims and the classification medical groups victims into two who suffer —those damages under and those who $350,000. suffer noneconomic over re-With gard Equal victims, to the classification of "the Pro- 'imposes requirement tection Clause nality of some ratio- "114 singled in the nature the class out.' disputes apply ¶ 98. No one does not equally to all Indeed, victims. entirely seriously burden falls on the most *42 injured malpractice. victims of medical Those who injuries fully compen- suffer the most severe will not be damages, sated for their noneconomic while those who relatively injuries suffer minor with lower noneconomic damages fully compensated.115 greater will be the injury, the smaller the fraction of noneconomic the victim will receive. According by report a 1992 the Wisconsin the
Office of Commissioner Insurance, of children from ages malpractice injuries comprise 2 0 to medical with yet less of claims, than 10% their claims large comprise portion paid a of the claims and ex- penses "[pjlaintiffs is, of insurers and the Fund.116That injuries appear highest with the most severe to be at the 114 Strange, James v. (1972) 407 U.S. (quoting Yeager, Rinaldi v. (1966)). 384 U.S. 308-09 cap, larger The lower the the number people of higher cap, affected. The the smaller people number of affected. Insurance, Wisconsin Health Office of Commissioner (WHCLIP): Liability Care Preliminary Insurance Plan Report on Wisconsin, Medical Malpractice In 16, 30, Special Report (1992). compensation. inadequate Hence, the worst-off risk may jeopardy' caps."117 a under kind of 'double suffer Young people by the are most affected damages, only cap not be- $350,000 noneconomic on they disproportionate a share serious suffer cause injuries malpractice, also because
from medical but injuries many expect a to be affected their over can 70-year expectancy. perfect a case is or life This 60- example. expectancy a of 69 Ferdon has life
Matthew person years; injured at An older a he was birth. with injury similarly will have serious period. injury for Yet both the a shorter live with subject cap young are to the and the old damages. in- Furthermore, because an family jured patient members, with shares patients disparate with families. effect on has legislature enjoys in eco- wide latitude 101. The legislature regulation. shifts the But when the nomic malpractice from insur- of medical economic burden providers companies negligent to a health care ance legisla- injured patients, group vulnerable, small Limiting appear not rational. tive action does many youth patient's recovery or how on the basis appear family not to be he or she has does members *43 germane objective any to of the law. objective legislature's to was ensure If the people injured of medical as a result
that Wisconsin fairly, compensated no rational basis are seriously injured patients treating of for most exists favorably than those seri- less less medical Damages Regressive ? A al., Caps David et Are Studdert California, 23 Health Jury Study Malpractice Verdicts ("Decisions (2004) implement [damage caps] to Affairs likely they are to an that made with awareness should be compensation."). fairness in existing problems of exacerbate ously injured. No rational basis for forcing exists severely injured most to patients provide monetary relief to health care and their insurers.118 providers At least as to the legislative objective of fair ensuring compensation, classifica- legislative tion created cap on noneconomic dam- is an ages arbitrary and creates undue hardship on a small unfortunate group plaintiffs. Limitations on regressive. noneconomic are damages 104. This very court made these same observa- 1995 Martin v. Richards. Martin involved a tions in process successful due challenge to the retroactivity of on noneconomic $1,000,000 cap damage awards. court This concluded that the cap unfairly sought the tort repair system at the expense those more seriously injured: yet
There is one more measure unfairness that the extracts, just not to the Martins people but all damages whose noneconomic cap]. [the exceed defendants, underlying assertion of the and of all who impose seek to a cap, is that the tort system is "broke" badly at repair. or least in need of Assuming the truth of that argument, assertion for the sake of 118A rationale sometimes offered limiting recovery for for damages that place is it is difficult to monetary loss, value on such a money that is an imperfect compensation intangible injuries, sympathetic juries may award damages. excessive sums for noneconomic Yet no one contends legislature that the determined injured that when someone is through malpractice, medical the maximum reasonable com pensation $350,000. for noneconomic Apparently, $350,000 was selected not necessarily in relation to what compensation constitutes reasonable victim, for the but rather was arrived at as a result of its relation legislative to the other objectives lowering such as malpractice premiums health care costs. *44 system at sole here to fix that
imposed seeks seriously injured. That strikes us expense those most person A whose noneco- equitable. fair nor as neither damages cap] or recovers [at nomic is below his her noneconomic loss. Those whose percent of or fraction.119 injuries cap receive but a exceed the conclude that rational rela- 105. We therefore tionship the classifications of does not exist between on noneconomic victims in the objective legislative compensating victims of fairly. malpractice medical
2. reasonably Providing priced medical mal- providers practice one of for health care insurance necessary legislature objectives believed people quality state. care for the health achieve reasonably priced legitimate has a interest The State premiums if the insurance cost for medical by escalating delivery threatened of health care is or apparently legislature premiums. concluded reducing awards would medical the size of premiums. malpractice insurance reduce providers Wis- As of health care coverage carry primary insurance must consin aggregate per $3,000,000 occurrence $1,000,000 year.120 carrier, per an excess The Fund then acts as covering any Therefore, that amount. above losses per "[s]ince $1,000,000 in the threshold the increase 119Martin, 2d at 210. 192 Wis. 11; Analysis 655.23(4)(b)(2); § Act 1997 Wis. Wis. Stat. Bill Assembly Bureau for 1997 Legislative Reference
by the at (available for 1997 Wis. Act Drafting Records WI). Madison, Bureau, Legislative Reference Wisconsin *45 aggregate, primary incident and $3,000,000 the malpractice [medical insurance] subject carriers are to impact more of an from the enactment of Wisconsin Act 10."121 relationship
¶ 108. We the discuss first between cap premiums charged by primary medical malpractice carriers, and then we discuss the relation- ship cap by between the and the assessments the Fund. cap damages A $350,000 on noneconomic intuitively appears in medical actions to be rationally legislative objective lowering related to the of quality medical insurance to costs ensure people health care for the malpractice of the If state. by large judg- insurance are costs fueled legislature settlements, ments and as the declared in cap payouts by compa- 1975, a would limit insurance payouts compa- nies; the lower would enable insurance premiums providers; cap nies to reduce to health care greater pre- would enable insurance carriers to have dictability payouts greater about size of ease in calculating premiums setting and in more accurate premiums rates; lower and lower assessments Fund would decrease overall health care costs con- sumers. legislature
¶ 110. The Wisconsin $350,000 chose a cap damages achieving on noneconomic as the means of objective. question its We not do of the wisdom that legislative hypoth- choice, but we must test whether the cap damages that a esis on bears relationship malpractice premi- a rational insurance reality. ums has a basis in
121Wisconsin Office of the Insurance, Commissioner Report Impact on the 2005). Wisconsin 10Act (May begin testing hypothesis, we In with recognition, legislature, to the that to in deference any specific monetary extent selection some arbitrary, is on noneconomic limitation imponderables.122 any limitation is based sense legislature specific after decides the numerical The balancing justice equal considerations.123 and fiscal fixing legislature's must a numerical be decision very any say accepted it can wide unless we *46 statutory limit said that a mark.124We have reasonable guaran- may equal protection violate on tort recoveries unreasonable, is, and that if the limitation is harsh tees low in relation is too when considered if the limitation the sustained.125 pro- equal Nevertheless, of 112. considerations figure require and the some rationale for the tection chosen. below, we For the reasons we shall set forth 113. adopted by ceiling the that the
conclude arbitrary legislature it is because is unreasonable 122 Stanhope, Wis. 90 2d at 843.
123 Sambs, 366-67; Stanhope, at 2d 90 Wis. 2d See Wis. at 97 843. 124 Sambs, n.11; 2d at Stanhope, 90 Wis. 2d 97 Wis. at 843 legislative principle that a adopted has the court if limitation is process recovery violates due limitation on damages. alleged to the compared and unreasonable harsh Sambs, Cargill City v. Estate 368, citing 97 2d Wis. at of of (N.H. 1979). Rochester, 708, 704, 406 A.2d 709 125 Sambs, Cargill, 406 A.2d at (quoting 2d at 97 Wis. 368 Maurin, 708). 843; 2d Stanhope, 90 Wis. 2d at 274 Wis. See also C.J., Crooks, J., concurring). (Abrahamson, 28, 97¶ rationally not related to the legislative objective lowering insurance premiums. A statute be may constitutionally valid when enacted but become may constitutionally invalid changes because of in the conditions to which statute A does not applies.126 past crisis render a forever law valid.127 Co., 49, 58-59, Republic Bldg. See Hanauer v. 216 Wis. (1934) (quoting with approval N.W. 136 Chastleton v. Corp.
Sinclair, 543, (1924), stating 264 U.S. 547-48 law "[a] upon depending of an emergency existence or other certain uphold may state of if operate facts it cease to the emergency change though passed." ceases or the facts even when valid See Carr, (1962) Chastleton). (citing also Baker v. 369 U.S. Co., In v. United States Carolene Products 304 U.S. (1938), Court stated: legislation Where the existence of a rational basis for whose constitutionality depends beyond upon sphere is attacked facts judicial notice, may properly subject such facts be made
judicial inquiry,
Baldwin,
Borden's Farm Products Co. v.
293 U.S.
..,
constitutionality
predicated upon
194 .
and the
of a statute
particular
may
challenged
of a
existence
state
facts
be
showing to the court that
those facts
ceased to
have
exist.
(1924).
Corp. Sinclair,
Chastleton
v.
render
statute
.
a
obsolete... Where
conditions have
unconstitutional,
abrogation by
a statute
rendered
the
its
basis for
court action is clear. It
settled
is well
that the continued existence
upon
constitutionality
legislation depends
which
facts
the
open
judicial inquiry.
all
remains at
times
Construction,
See
J. Singer,
Statutory
also Norman
1 Sutherland
(6th
2000) ("Where
2:6,
§
legislation
at 41
ed.
validity
depends
justification,
pertinent
on factual
if the
are of such
facts
nature
may
they
change
times,
that
the
regulation
with
a statute or
caps
previously
This
discussed
on
115.
court
impact
damages and
on medical
their
noneconomic
practice
Richards,
In Martin v.
this court
costs
1995.
process
chal-
with a due
constitutional
was confronted
lenge
application
$1,000,000
of the
retroactive
the
constitutionality
favoring
cap.
argument
The
the
the
cap
application
cap
a
of the
was that
retroactive
high
damages prevents
and there-
awards
premiums
malpractice
keeps medical
insurance
fore
acknowledged having
rising. The
"seen these
from
court
arguments
and
media"128
raised in other forums
the
generic
being
the
reasons which are
and
"familiar with
damages."129
caps
cited for
on noneconomic
often
however,
conclude,
The
on to
court went
application
$1,000,000
was
a retroactive
of the
that
negli-
a
would have
unconstitutional because
malpractice
gible
in the state and would
effect on
costs
purposes
not further the
asserted.130
time,
may
at
later
at one time
become invalid
a
which
valid
Sinclair,
Corp.
Chastleton
v.
(citing
129 Id. at 205.
130Id. at 203-05. con Supreme reached similar Dakota Court North record, caps, on a review of the effect of based clusion about subsequent events "misinformed or legislature was is, substantially," that that there was situation changed have justify "crisis." Without crisis to medical no medical recovery, cap on North Dakota's restriction on equal violated and noneconomic malpractice economic Arneson, N.W.2d at 136. guarantees. protection conclusions about reached different Other courts have (Utah See, 135, 141 e.g., Drezga, Judd v. 103 P.3d caps. effect of 2004) determining that (examining and studies and articles making reasonably related to cap was *48 117. The Martin court referred several stud- ies in making this point. showed the $1,000,000 studies that if insignificant, had an effect on any, costs, of express this purpose legisla-
tion. The Martin court summarized the evidence as follows:
First,
indicates that few
evidence
individuals receive
damages
$1,000,000.
noneconomic
in excess
fact,
of
In
Department
Policy
the U.S.
of Justice
Working
Tort
only
percent
found
Group
that
2.7
of all medical mal-
practice claimants
damages
receive noneconomic
$100,000.
Report
Policy
excess of
See
the Tort
Work-
of
Causes,
Group
ing
on the
Extent
Policy Implica-
and
tions
Availability
Current Crisis
Insurance
Affordability,
Justice,
66,
Dept,
U.S.
February
at
Further, in
those medical
going
cases
damages
$100,000
verdict where noneconomic
above
awarded,
are
damages
noneconomic
award aver-
health insurance rates
caps
help
affordable
that
did
achieve
goal,
only
if
part);
even
in small
v.
Robinson Charleston
Ctr.,
(W 1992)
877,
Area
Med.
S.E.2d
Va.
(upholding
cap on
damages;
legislative
$1 million
noneconomic
classi
upheld
reasonably
fication
be
it
will
"if
related to the
legitimate
achievement
state purpose."); Zdrojewski v.
(Mich.
2003)
Murphy,
721,
N.W.2d
App.
737-38
(cap
Ct.
on
alia,
against,
upheld
equal
noneconomic
protec
inter
challenge);
tion
Etheridge
525,
v. Med. Ctr. Hosps., 376 S.E.2d
(Va. 1989) (upholding Virginia's $750,000
533-34
cap on total
recovery, including
loss, against equal
economic
protection
Edmonds,
(Md.
challenge); Murphy
v.
601 A.2d
114-16
1992) (upholding Maryland's $350,000
noneconomic
damages against equal protection challenge); Adams v.
(Mo. 1992)
Mercy Hosp.,
Children's
832 S.W.2d
903-05
(upholding a reduction of a
million
damage
$13
capped
equal
award to the
against
protec
amount
victims).
challenge
tion
for each of the two
*49
ages
$428,000 $728,000.
between
Gary
Id. See also
J.
—
Highland,
Injury
Medical
Compensation
California's
An Equal
Act:
Challenge,
Protection
52 S. Cal.
Reform
829,
L. Rev.
(recognizing
951 n.745
nationally,
that
1 percent
fewer than
all
awards in 1970 exceeded
$100,000);
Maurer,
925,
Carson v.
120 N.H.
424 A.2d
(1980)
825,
(noting
significant
as
the fact that" 'few
damages
individuals suffer non-economic
in excess of
(ci-
$250,000'
legislative
[the
cap
Hampshire]"
in New
omitted)). Acknowledging
tation
that few individuals
damages
receive
in
$1,000,000,
excess of
safely
we can
assume that
persons
number of
retroactively af-
by
jury
fected
the law whose
awarded noneconomic
$1,000,000
insignificant
exceed
is too
to have
an affect
malpractice
[sic]
future
costs.131
119. The Martin court concluded then
that
"these
[of
assertions
the effect of the
on medical
insurance
malpractice
costs] are
supported by paucity
of evidence."132 Subsequent
reports and commentary133
Martin,134
support
this court's
conclusions
120. The Wisconsin Commissioner of
Insurance
is charged
law to
report every
years
two
on the
(which
of 1995
impact
Wisconsin Act 10
adopted the
131Martin,
132Id. at 203.
133Gfell, supra 12, (citing note at 804 U.S. General Account ing Office, Malpractice: Medical Varying Laws in the Effects of (1999)). Columbia, Maryland District Virginia ("If Gfell, supra note at premiums any effect, insurance have had most sources indicate relatively small."); Poisson, it has been Elizabeth Stewart Com ment, Addressing Impropriety Statutory Caps On Pain Suffering Liability Awards in System, the Medical 82 N.C. (2004) L. Rev. (discussing variety 767-70 of other factors may impact well be more of an on medical rates). premium measures).135 The Commissioner and other on the of 1995 Wis. Act report impact
Insurance's 2005 10 draws similar conclusions the Commissioner's 2003, 2001, 1999 and 1997. The 2005 issued reports line conclusion is that "the dis- only bottom Report's [a] cernable effect on these areas has been reduction determined assessment levels actuarially [of the last years."136 Fund] over seven to the on medical impact malprac- As Act's indicates tice insurance Commissioner premiums, that a number of factors affect malpractice premium *50 rates, insurance and that "it would be difficult to draw from numbers based on any premium solely conclusions the enactment of Act 10."137This is confir- Wisconsin 2003, mation of the Commissioner's conclusions 2001, and 1997.138The Commissioner also asserts $350,000 adopted cap Act 10 the on noneconomic dam ages requirements damages and the that for future medical $100,000 expenses paid periodically excess of be out and that payments evidence of collateral source be admissible. 601.427(9), requiring See Wis. Stat. report § to evaluate (a) following: the effects that the Act has had on the (b) Wisconsin; providers practicing number of health care (c) Fund; providers pay fees that health care to the premiums providers pay that health care for health care liabil- ity report impact insurance. The Commissioner's on of the damages. Act focuses on the on noneconomic Insurance, of the Wisconsin Office Commissioner of 2005). Report Impact on the 1995 Wisconsin Act 10 (May 137 Id. 138 Id.; Insurance, Office Wisconsin Commissioner of 2003) Impact on Report 1995 Wisconsin Act 10 (May 12, ("Therefore, any it would be difficult to draw conclusions from premium solely numbers based the enactment of Wisconsin 10."); Insurance, Act Wisconsin Office of the Commissioner of 2001) Report Impact on the Act 10 Wisconsin (July "[n]o direct correlation can be drawn between the caps changes taking enacted in 1995 and current rate place primary today."139 in the market Nevertheless, the Commissioner does men- stability dramatically impacted tion that "rate could be primary caps both the Fund and carriers should the be removed insurers face unlimited non-economic damages."140 private pos- But insurers do not face the sibility damages of "unlimited" noneconomic because private liability, insurer's even without a on non- damages, per economic $1,000,000 occurrence and per year. $3,000,000 support 123. Other studies the Commissioner's
finding premiums that medical insurance by caps damages. are not affected on noneconomic For example, Accounting studies the U.S. General Office, non-partisan government entity federal that is the investigative Congress, audit, evaluation, and arm of go have concluded that a number of factors into malpractice premiums whether medical increase or decrease and that there is no definitive correlation caps between on and lower medi- ("Therefore, it would be difficult any to draw conclusions from premium numbers solely based on the enactment of Wisconsin 10."); Act Wisconsin Insurance, Office of the Commissioner of *51 1999) Report Impact on the (May 6, 1995 Wisconsin Act 10 of ("Therefore, it would be any difficult to draw conclusions from premium soley numbers based [sic] on the enactment of Wis 10."); consin Act Wisconsin Office of Commissioner of Insurance, Report Impact on the (May 1995 Wisconsin Act 10 of 1997) ("Therefore, it any would be difficult to draw conclu premium sions from solely numbers based on the enactment of 10."). Wisconsin Act Insurance, Wisconsin Office of Commissioner of 2005). Report Impact on the (May 12, 1995 Wisconsin Act 10 of 140Id. premium conclusion was rates.141 This
cal recognition despite that losses on medical reached large may part of insur- constitute a claims ers' losses.142 Office, Malpractice In Accounting Medical U.S. General to Increased Pre Multiple Factors Have Contributed
surance: (June 2003) Rates, (indicating that while mium GAO-03-702 leading for insur malpractice suits are one of the costs determined; carriers, premium effect rates cannot be ance on go providers' premium health care a number of factors into rates); Gregory, Capping Noneconomic see also Melissa C. Note: Not the Panacea Damages Malpractice in Medical Suits is of Crisis", 1031,104L-45 Mitchell L. Rev. Liability "Medical 31 Wm. (2005) study); (same, citing Accounting Office Health General America, Why Issue Do Health Insurance Association of Brief: 2002) (indicating rising that (Sept. Premiums Rise Insurance in premiums are due to increases consumer health insurance of health care and that "claimsand consumer service" overall cost care). only every spend on health account for 0.12 cents of dollar Academy Lawyers provided study Trial The Wisconsin damage caps premiums, on discussing the effects of availability coverage. Martin D. payouts and the of insurance See al., Malpractice Caps: Impact et Medical The Non- Weiss Premiums, Payout Damages Caps Physician Claims Economic (June 2003) (Amicus Levels, Availability Coverage Brief E-l). Academy Lawyers, App. problem Trial of Wisconsin however, Report, only that it uses "median" with the Weiss providing the reader figures drawing in its conclusions without underlying data, averages, range gave with the or even Therefore, figures the median used. a state that shows rise to may actually average in have had an premiums median decrease any premiums, impossible or vice versa. It is to draw increase figures contained in the Weiss conclusions from the data and malprac- Report. reports a median decrease medical Weiss 5% from 1991-2002. premiums tice Wisconsin Office, Accounting Malpractice Medical U.S. General to Increased Multiple Insurance: Factors Have Contributed (June 2003). Rates, Premium GAO-03-702 *52 Accounting study ¶ 124. One General Office con- payments against cluded that claims all physicians between 1996 and 2002 tended to be lower grew rapidly and in less states with noneconomic dam- age caps.143The Office's ultimate conclusion was that averages these obscured wide variation between states year year.144 study's and within state from The payments cap non-cap in claims states provide therefore do not a rational basis for the connec- premiums. tion between the and lower according Accounting Indeed, to a General report, premiums in Office differences both and claims payments by multiple are affected factors addition to damage caps, including premium regulation, state rate competition among insurers, level and interest rates and income returns that affect insurers' investment Accounting Thus, returns.145 the General Office con- cluded that it could not determine the extent to which Medical Mal 03-836, Accounting U.S. General Office practice: Implications Rising Premiums on Access to Health (also Care available at (Aug. 2003), http://www.gao.gov Supplemental Appendix). available Matthew Ferdon's 144Id 145 Id. at 7. report
Another multiple also reached the conclusion that malpractice premiums. affect medical report factors The stated "[p]remiums states with a on awards were 17.1% caps." than in E. Thorpe, lower states without such Kenneth Malpractice And Im- The Medical 'Crisis': Recent Trends The (Jan. 21, 2004), pact State Tort available at W4-26 Of Reforms http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.20vl. report "cap including defined a on awards" as states with damages caps on all caps on noneconomic states with damages impos- and economic. It is therefore —noneconomic any report cap's from effect sible to draw conclusions this on premiums only capped. if are *53 in rates and claims among premium
differences states to or to addi- damage caps were attributed payments Minnesota, has no factors.146 For which example, tional in low damages, relatively growth premium on has caps rates and claims payments.147 reason that does not have 126. One medical insurance pre- expected impact of claims are very be that a small number may miums of any filed for medical and even fewer injuries,148 ever are for an amount above the cap.149 eventual awards significant that incur may Another reason be insurers 146 03-836, Accounting Office Medical Mal U.S. General to Health practice: Implications Rising Premiums on Access of 30, 29, 2003), (Aug. http://www.gao.gov at 37 available at Care (also Supplemental Appendix). in Ferdon's available Matthew Note, Following Berger, Mitchell S. the Doctor's Orders See also Damages Malpractice in Medical —Caps on Non-Economic ("Data Cases, 173, Rutgers L.J. 187-88 of the National caps of Insurance Commissioners indicates that Association greatly."). likely malpractice premiums are not to affect 03-836, Accounting U.S. General Office Medical Mal Rising Premiums on Access to Health practice: Implications of (also 29, 2003), (Aug. http://www.gao.gov Care 37 available at Supplemental Appendix). Ferdon's available Matthew Servs., Dep't Addressing Health & Human U.S. of Reforming Litigation Care Crisis: the Medical New Health (Mar. Care, 3, System Improve Quality to Health at 15 of 2003) ("Most only victims of medical error do not file a claim .. . injured by negligence of those even 1.53% who were claim."); Committee, Joint The Per filed see also Economic (March 2005) System Liability verse Nature the Medical (noting only injured patients actually against file suit that 3% of provider). their health care Insurance, Wisconsin Office of the Commissioner of 2001)
Report Impact (July on the 1995 Wisconsin Act 10 ("Over years the Fund has claims that couple the last seen by] cap, [are affected Act 10 and the noneconomic non-meritorious claims.150 The defending expense large to eliminate number of nothing does or ultimately claims are dismissed meritless to the It is any payments plaintiffs.151 without dropped mer- defending a reasonable inference that the cost in- contributes to significantly itless suits surance premiums.152 studies, including 127. Articles and General study, Office indicated that 57%
Accounting all claims resulted in no to the payment pa- 70% of are According tient.153 Wisconsin statistics similar. from the Office of Medical Media- information derived *54 Panels,154 from 1989 2004 a little more through tion however, experience significant."); this has not been U.S. Gen Office, Characteristics Accounting Malpractice: eral Medical of 1987) (4% 1984, all (Apr. in of Claims Closed GAO/HRD-87-55 included, $250,000. claims, damages over Id. at 2. with all were 50.). $200,000. Id. at noneconomic were over 2.1% of 150 Servs., Confronting the Dep't U.S. of Health & Human Quality Improving Health Care New Health Care Crisis: (July Liability System Lowering by Fixing Costs Our Medical 25, 2002), http://aspe.hhs.gov/daltcp/reports/li- available at Office, trefm.htm, Accounting Medical (citing U.S. General 1984, Closed in General Malpractice: Characteristics Claims of 1987) (cited Office/HRD-87-55,18 Gregory, in Accounting (Apr. 1046). 141, at supra note
151Gfell, 12, supra note at 779.
152 141, note at 1046. Gregory, supra 153 Office, Malpractice: Accounting Medical U.S. General 1984, Closed in Characteristics Claims GAO/HRD-87-55 of 141, 1987); Gregory, supra note at 1046. (April mediation with the Litigants request must file a for simultaneously System prior Panel to or Medical Mediation Mediation informa Office of Medical filing a court action. with Appendix & of the in Amicus Curiae Brief reprinted the tion is Lawyers, at B-l. Academy of Trial Wisconsin verdicts, claims filed resulted in with than 10% the In only about 30% of those favorable to the plaintiffs. 2004, out of the 23 medical verdicts in malpractice Wisconsin, only plaintiffs. four were favor of the 128. Victims of medical with valid malpractice do substantial claims not seem to be source of insurance, increased for medical premiums on noneconomic yet damages requires they being bear the burden of full tort deprived one federal Executive Branch compensation.155 While Services, of Health Human agency, Department & indicated that number of "[t]he of million payments $1 or more all medical malpractice damages, just [for not . . . in the damages, exploded past has] years Wisconsin],"156 [in number of states other than the same has not been true in Wisconsin. Director Berger, supra note at 185-86. Dep't Servs., U.S. Addressing of Health & Human New Health Care Reforming Litigation Sys Crisis: the Medical (Mar. 2003). Care, Improve Quality tem to Health at 12 conjunction In years, recent an with Executive Branch reform, push for federal medical Department Health and Secretary Human Sevices' Office of the Assistant for Planning produced and Evaluation has a number policy essence, papers saying, litigation system "The responsible report crisis." Id. The also notes that in two recent *55 Texas, reports damages on Florida and comprised noneconomic 70%, respectively, specific percentages 77% of awards. No given caps, discussing are for other states without but in "mega-awards" non-cap report in states the draws the conclu- sion, apparently jury "mega-awards" from 17 across 10 states spanning six-year period, damages may a that noneconomic comprise or 50% more of total awards.
A recent article concluded that malpractice pay- medical any ments have malprac- leveled off since 2000 and that rise in payments proportionate changes tice in is with overall health
640 Wisconsin Patients Fund has Compensation written that Wisconsin has "not seen the huge jury- .1,157 verdicts that have been in . reported other states . . 129. Based on the available evidence from nearly years with on noneconomic experience caps in medical damages cases Wisconsin and malpractice states, other it is not to that reasonable conclude $350,000 has its intended effect of medical cap reducing insurance We therefore con- premiums.158 $350,000 clude that the on noneconomic damages cases not related to rationally al., spending. Physi- care Amitabh Chandra et The Growth of Payments: Malpractice cian Medical Evidence the National from Bank, W5-243, 31, 2005), (May Practitioner Data W5-247 Furthermore, http://www.healthaffairs.org. available at the few large growing pace awards are not at the same as awards that by cap damages. would not be affected on Id. Wedekind, Compensation Expe Theresa Patients Claims (Wis.
rience, Fund), 2004, Comp. Spring WiscRisk Patients at 2. awards, they infrequent. There are million dollar but are example, jury For in a recent case a awarded of $17.4 who, "16, Hegarty age million on at behalf of deceased Sarah years died 1998 after two of medical treatment and 89 operations [trip hospital that her followed where she negligent Nunnally, Judge treatment.]" received Derrick Re- Award, Sentinel, 9, 2004, Malpractice duces Milwaukee J. Dec. award, apparently probably at B3. The circuit court reduced the powers. under its remittitur
158Gfell, supra (citing note at 804 Account U.S. General Office, ing Malpractice: Varying Medical Laws in the Effects of Columbia, (1999)); Maryland Virginia District see also Sheward, Lawyers State ex rel. Ohio Acad. Trial v. 715 N.E.2d 1999) (Ohio ("[A] study by Insurance rate-setting Organization, Service arm of the insurance reforms, industry, savings tort includ found from various ing damages, 'marginal were omitted)). (quoted nonexistent.'" source *56 legislative objective lowering of premiums. insurance 130. We next examine whether the rationally
on noneconomic is related to the legislative objectives keeping of the Fund's annual as- providers sessments to health care at a low rate and enabling operate the Fund to on a sound financial basis. objectives ultimately primary These objective should relate to the lowering health care costs for Wisconsin consumers. provide 131. The Fund was created to excess
liability coverage providers.159 for health care The Fund managed by a Board of Governors160and adminis- by tered the Office of the Commissioner of Insurance.161 [Fund] through 132. "The is funded annual as- paid by providers through sessments investment income."162Assessments are determined and collected provider's specialty. example, based on a health care For Legislative Wisconsin Audit Summary, Bureau Audit (Dec. 1994). Report 94-29
160The Fund's Board consists of three industry insurance representatives, by member named Academy the Wisconsin Lawyers, Trial by a member Association, named the State Bar by two members named Society, Wisconsin Medical member named Association, the Wisconsin Hospital four public appointed by Governor, members and the Commis Insurance, who serves as the Chair. See Wis. Stat. sioner of 619.04(3). § 161Wisconsin Office Insurance, of the Commissioner Report Impact on the Act 2003). Wisconsin (May 162Legislative Bureau, Injured Patients and Families Fiscal (Insurance Compensation Fund Family and Health and Ser *57 of in a category are placed nurse anesthetists certified in the fees; those is assessed lower that providers and obstet- like neurosurgeons highest,-risk specialties, of category providers are surgeons, placed ric providers Health care annual fees.163 higher is assessed they in the Fund unless to participate are required exemption.164 for an qualify the assessments how much To determine analyzes consultant an actuarial given year, be for a
will and financial position and experience Fund's loss a committee that to a fee level recommendation submits for use recommendation makes the turn Board.165 (May 17, 2
vices), on Finance #450 to Joint Committee Paper #450). 2005) (hereinafter Paper Fiscal Bureau Legislative Fund Bureau, Compensation Patients Legislative Fiscal Services), #458 to (Insurance Family Paper and and Health (hereinafter 2003) (Apr. on Finance Joint Committee #458). Paper Bureau Legislative Fiscal types Among the Paper #450. Legislative Fiscal Bureau are, exemptions for for qualifying providers health care of year; in a 241 hours less than providers practicing example: provid state-, county- municipal-employed or providers; retired Wisconsin practiced have never ers; providers who date. Insurance, of of the Commissioner Office Wisconsin 2003). (May Act 10 Impact 1995 Wisconsin
Report on the of recommended from the actuaries' often differ rates The Board's nine In #450. five Paper Bureau Legislative Fiscal rates. below levels were 1,1985-86, the final fee July years since fiscal The result by the actuaries. estimated fee levels the break-even impeded. deficits is ability to reduce the the Board's is that Farrow, the Commis Executive Assistant Testimony Peter Insurance, Malpractice Relating to Medical sioner Reform Securities, Insurance, Assembly Committee before Insurance, the Commissioner by the Policy Corporate Officeof ¶ 134. The Fund estimates its Toss liabilities . .. [the Fund] may required based on estimates of what be pay malpractice to may incidents that have occurred but yet reported."166
not have been settled or even That say, liability equals is to total loss the amount the Fund pay every possible malpractice would have to if incident given year eventually in a resulted in a lawsuit that produced a settlement or trial verdict and award in injured patient. favor of the ¶ 135. The Fund has assets. The assets include cash and investment balances. Investment income ac- growth, counts for 33% of the Fund's balance $410.8 million since the Fund was created in 1975.167
¶ 136. When the Fund's "estimated loss liabilities exceedQ . . . cash and investments," the Fund runs an "accounting accounting deficit."168The balance as of 30, June 2003 was million and $7.9 was estimated to be approximately million as of $21.0 June 2004.169 Conversely, greater if cash and investments are than positive estimated loss liabilities, the Fund runs a accounting balance. (available 19, 1995,
Jan. at 4 in the Amicus Curiae Brief and Appendix I). of the Academy Wisconsin Lawyers Trial at App. eight
For the policy years from 2001-02, 1994-95 until actuaries' recommendation was average an assessment in- crease, but the approved Board average an assessment decrease. Legislative #450; Fiscal Bureau Paper Legislative Fiscal Bu- Paper reau #458 at 5. policy year 2004-05, For the the Board decreased Legislative assessments 20%. Paper Fiscal Bureau #450 at 4. An Injured Legislative Audit: Wisconsin Bureau, Audit Fund,
Patients and Compensation Families (Oct. 2004). 4at 167 Id. at 13.
168 Id. at 4.
169 Id. at 5. accounting an accrual Fund uses 137. The providers care are that health That means method.170 of what all claims on "estimates fees based assessed any occurred in for incidents that total over time would payout year, given amount was rather than on what accounting helps year."171 method accrual The for that pay assets to Fund have sufficient that the will ensure including reported, outstanding those not liabilities, all also 1990s to be discontinued.172 if the Fund were to further increase reserves the Fund's Board saw outstanding any pay if the claims it could ensure that 2003, the Fund's As of June eliminated.173 Fund was grown to balances have $658.9 and investment cash million.174 always the accrual used The Fund has not years
accounting of the Fund's For the first five method. operated starting on a cash ba- 1975, it existence charged providers were is, health care That sis.175 payout for the actual based on assessments given year.176 in a claims 3; Legislative at Paper Bureau #450 Legislative Fiscal Paper #458 at
Fiscal Bureau 3; Legislative Paper #450 at Fiscal Bureau Legislative at 4. Paper #458
Fiscal Bureau 3; Legislative at Paper #450 Fiscal Bureau Legislative *59 4. Paper #458 at Fiscal Bureau 173 3; Legislative at Paper #450 Legislative Fiscal Bureau 4. Paper #458 at Bureau Fiscal 174 Bureau, Injured An Audit: Legislative Audit Wisconsin (Oct. 2004). 4 Compensation Fund Families Patients and 175 3; Legislative at Paper #450 Fiscal Bureau Legislative at 4. Paper #458 Fiscal Bureau
176 3; Legislative #450 at Paper Bureau Legislative Fiscal at 4. Paper Bureau #458 Fiscal
645 Switching ¶ 139. from the cash basis to accrual accounting attempt improve integrity anwas accounting brings Fund. The accrual method with it degree uncertainty predicting because what claims might eventually payment by be filed result "highly uncertain," Fund and the result has been that expenditures pro- been "actual have much lower than jected expenditures."177 result, As a has Fund his- torically paid projected expendi- out much less than its tures.178 year liability 1984-85, 140. Since fiscal the loss years reduced,
estimates for the Fund have been both years in which there was a and in in which there cap.179 original no The was actuarial losses for the last years by 20 been have reduced over time a net amount representing original million, 13.9% the $217.3 years.180 total losses estimated for those jeopardy 141. Predictions about of the Fund's by financial status as evidenced oft-indicated deficits is actually years surpluses unfounded, as Fund ran cap. both with and without a Simply put, consistently the actuaries have overestimated the amount of losses Fund would any given year. incur in loss, overestimates of nearly given year, sometimes million in a $200 fiscal are following illustrated chart: 177Legislative Fiscal Paper 5; Legislative Bureau #450 at Paper Fiscal Bureau #458 at 5. 178Legislative Paper 5; Legislative Fiscal Bureau #450 at Paper Fiscal Bureau #458 at Injured An Audit: Legislative Bureau, Wisconsin Audit (Oct. 2004). Patients and Families Compensation Fund An Injured Audit: Bureau, Legislative Wisconsin Audit (Oct. 2004). Patients and Families Compensation Fund *61 $28,724,959 $165,777,386 2001 $4,888,065 2002 $127,606,855 $7,932,348 $82,655,325 2003 $24,616,324 2004181 n/a182 143. According to the Legislative Fiscal Bureau's 17, 2005 to the May Joint report Finance, Committee on the Fund's sheet through balance fiscal 2003-04 year as appears follows:
181The come from numbers the Fund's and actuary. audits See Legislative An Audit Bureau, Compensa Patients Audit of: 30, 1981, tion Fund Fiscal Ended Years June 1982 and 83-20 16 (June 1983); Legislative Bureau, 1986 Functional and Audit - Progress Report Fund, (Mar. Patients Compensation 1987) 23, (Exhibit 3); Legislative An Audit Bureau, Audit Patients of: Fund, Compensation 93-18 9, (July 1993); 10 Legislative Audit Bureau, Fund, An Audit Patients Compensation 94-29 17, 18 of: (Dec. 1994); Legislative An Audit: Patients Com Bureau, Audit Fund, (June pensation 98-7 11, 1998); 12 Legislative Audit Bureau, An Fund, Audit: Patients Compensation 01-11 24 (June 2001); (re Robertson, Inc., & Milliman Memorandum in printed part appendix the brief and of the Wisconsin J-l). Academy Lawyers of Trial at Appendix The actuarial for bases the Fund's reports fiscal have been challenged. light challenges, In these the Legislative Audit Bureau, nonpartisan legislative agency responsible service conducting program financial and evaluation audits of state agencies, recommended Office of the Commis- sioner Insurance contract for an audit of actuarial methods assumptions used estimating Fund's loss liabilities. See An Legislative Bureau, Wisconsin Injured Audit: Audit (Oct. 2004). Compensation Patients Families Fund In February 2005 the Commissioner of Insurance contracted for an audit, report no Legislative but has been received. Fiscal Bureau Paper 9; #450 at Legislative Paper Fiscal Bureau #458 at 9. 182Hindsight surplus, means the actual deficit or not a forward-looking projected amount surplus. deficit or Hindsight Restatement
Fund Based Financial Statement Actuarial Studies 9/30/04 As Published Milliman Aon 741,283,000 741,283,000 741,283,000 1. Total Fund Assets 2. Fund Undiscounted 880,445,000 786,030,000 493,625,000185
Unpaid Claim Liabilities 3. Offset for Investment -213,948,000 -165,427,000 -105,638,000
Income 4. Fund Discounted
Unpaid Claim Liabilities 3)
(2 387,987,000 666,497,000 620,603,000 + *62 438,157,000 716,667,000 670,773,000 Total Fund Liabilities 5. -(1 5) 70,510,000 303,126,000 24,616,000 Surplus Fund 6. that the Fund has The data illustrate above fiscally operated no there were and been sound when damages, caps there was when on noneconomic damages, cap and since 1995 on noneconomic $1,000,000 cap $350,000 on noneconomic there has been when likely damages. the fiscal The to continue for trend actuary projected ending year has in 2004: one exceeding year surplus 2003-04 as $303 Fund's for fiscal million.186 cap if that were The actuaries estimate May undiscounted, 1995, the Fund's
vitiated effective by might unpaid much as increase as claim liabilities 183 actuary for the Fund. Long-time 184 independent actuarial actuary provide retained to New opinion of the Fund. represent estimates as of Unpaid claim liabilities 9/30/04 percentile. an confidence
at 85% at Paper #450 10-11. Legislative Fiscal Bureau million as of June 2003.187But the $144 Wisconsin Legislative up Bureau Fiscal concluded that if to $300 were million transferred out of the and if Fund, (the year per assessment remained static at million $31 level) years, 2003-04 next ten the Fund would still left with be assets of million in not $134.2 including potential liquidation penalties.188 financial The Fiscal Bureau concluded that total assets in ten years pay could be sufficient to all claims, even with a year static assessment million a and a $31 $300 million withdrawal.189 though chapter
¶ 146. Even as enacted in 1975, initially 655 did not contain a on noneconomic in medical actions,190the Fund's position fiscal awas consideration in the 1975 enact- Chapter originally provided ment. if the jeopardy, cash Fund's flow were there would be a damages.191 $500,000cash- on certain flow-dependent cap apparently triggered. was never Legislative Bureau, Wisconsin Injured Audit An Audit: (Oct. 2004). Compensation Patients Families Fund 49 According to the Legislative Bureau, Fiscal the retroactive may amount of liability increase million to $150 $200 Legislative million. Paper Fiscal Bureau #450 at 8. 188"The years total in ten assets could be pay sufficient to all Legislative claims ...." Fiscal Paper Bureau #458 at 10. *63 189Legislative Bureau Paper Fiscal #458 at 10. 190 Maurin, 2d 274 Wis. 51. ¶
191 655.27(6) (1975) § read, Wisconsin Stat. in part, relevant as follows: If, any July 1,
AWARD at LIMITATION. time after money commissioner finds that amount of the fund has fallen $2,500,000 any year $6,000,000 a below level one or below a level any years, 2 for an consecutive automatic limitation on awards of again position a con- was fiscal The Fund's 147. imple- during early about discussions 1980s in the cern menting malpractice damages cap ac- in medical a on sent of Insurance 1983, the Commissioner In tions. expressing the Fund concern that to the Governor letter The may experience in the future.192 deficit an accrual running danger The deficit. a cash Fund was not legislation drafting that indicate the 1986 records for "severity" 1981, claims, and the to from 1978 responded increasing. that The Governor claims, were financial steps Fund's to ensure the be taken should position.193 Study Special Legislative Council's grappled Malpractice with the Medical
Committee on May malpractice. In in medical issues various legislature adopted Assembly, 4,Bill Special Session damages This capped $1,000,000. at which legislation provision, is, a "sunset" contained damages to cap set was on noneconomic $1,000,000 expire legislature it. The renewed in 1991 unless legislature on noneco- $1,000,000 renew the did not damages, 1994, non- 1991 to therefore, from nomic malpractice damages claims were for economic capped. not noneco- until 1995 that It was not again malpractice actions in medical
nomic injury any on account of or death one injury apply or death not does effect. This subsection shall take prior to occurred resulting which from an incident This takes effect. an award limitation such the date on which expenses. apply any payments for medical not does subsection Insurance, Fox, O. Commissioner from Thomas Letter 1983). (Oct. 25, Anthony Earl to Governor Fox, O. Anthony to Thomas Earl Letter from Governor 1983). (Dec. 22, of Insurance Commissioner *64 drafted,
came into effect. As the originally bill set the cap on noneconomic in damages medical at $250,000, a consistent with 1994 recommendation by the Committee created the Special Fund's Board Gov- ernors. 150. The Special Committee's 1994 report194
analyzed the and advantages disadvantages of a $250,000 on noneconomic cap damages medical mal- practice According actions. to report, the advan- tages were as follows:
(cid:127) If cap were retroactive it would reduce collecting
deficit without fees in excess of the actu- arially level;195 determined break-even 194The Special Committee the Fund's Board of Gover prepared nors and a Report Legislative submitted to the Joint 13, Audit Committee dated June In Special contrast recommendation, with Committee's the Fund's Board Governors recommended that a noneco- damage cap nomic be a set at level $1 not exceed million. Insurance, Commissioner of Progress Functional and (Feb. 1995). Fund, Report Compensation 4at —Patients Legislative The Study Wisconsin Council Committee's bill file irom contains letters various individuals and groups suggest- ing alternatives, a number ranging a cap from no to return to $1,000,000 cap. Predictably, aligned groups doctors, with companies, hospitals $250,000 insurance favored the cap. lawyers Patients' suggested advocates there no cap. be why $350,000 No documents indicate was chosen over $250,000. inference, course, The adopting cases, on noneconomic as $250,000, opposed to legislature sought patients' to balance injuries compensation potential with reductions of the Fund's assessments. 30,1994, The Fund had a as of deficit June on an audited
basis of supra, however, $67.9 million. See showing hindsight surplus. million $120.3 (cid:127) anticipated payments of the future reduces *65 Fund; and
the (cid:127) to settled more may The allow for claims be cap
expeditiously.196 $250,000 of a The disadvantages imposing the were, according to damages on non-economic cap as follows: report,
(cid:127) recovery right to cap The limits claimant's
damages pain suffering, as and loss consor- such tium, etc.; projection are a of the unfunded liabili-
The Fund's deficits if the ceased collect outstanding Fund to ties that would remain long-term represents The deficit short- further assessments. eventually that will be age in the cash and investments balance payments. The deficit was projected Fund's needed to make the years Had the operation. in its 10 primarily incurred first applied the retroac- proposal cap Committee's that be Special helped the Fund's tively cap would have adopted, been Richards, 2d 156 Martin 192 Wis. at position. See v. deficit $1,000,000 cap of the (declaring application the retroactive damage process grounds). Because on due unconstitutional prior not claims incurred to enactment of cap apply does $350,000 impact has on the Fund's deficit cap no cap, Sanders, L. Milliman & from Robert Memorandum position. Bubolz, Chief, Robertson, Inc., Compen- Patients to Danford C. (available 1995) (Jan. 18, Bill File at the Fund sation Madison, Wisconsin); Council, Commis- Legislative Wisconsin Insurance, Progress Report— 1994 Functional sioner of (Feb. 1995); 3, 22, Patients Wis. Compensation Fund Patients Fund, Legislative The Audit Committee Report To Joint Comp. Directors) by of the Board Special Committee (prepared (June 1994). 13, 3, Summary Executive Fund, Report Joint Compensation Wisconsin Patients Special Committee (prepared Committee Legislative Audit (June 13, Governors), Summary at 14 Board of Executive of the 1994).
(cid:127) cap greatest impact The has the on the most se- injured
verely patients; (cid:127) subject challenges.197 is to constitutional prediction ¶ 152. The that a was would reduce charged by the assessments the Fund. To use the Special Committee's and Commissioner of Insurance's terminology, funding the Fund's break-even level would cap. be reduced with a The break-even fund- ing charges level an estimate assessment that would be needed to cover estimated losses for the year.198 five-year period beginning aOver on June capped if were at $250,000, it was estimated Fund would have to *66 approximately take in million less in assessments $67.8 providers on health in care order to break even.199 contention that assessments would be cap adopted if reduced the reports were with consistent other legislature. example, to the For a memorandum from Peter Farrow, the executive assistant to the Com- Representative Sheryl missioner to Insurance, Al- Assembly bers, Chair of the Committee on Insurance, Corporate Policy, Securities, and $350,000 indicated a cap would mean the Fund would have to take in $46 197 Report to Joint Fund, Wisconsin Compensation Patients Legislative Audit Committee (prepared by Special Commit (June Governors), tee of the Board Executive Summary at 14 1994). 13, 198 An Injured Bureau, Audit: Legislative Wisconsin Audit Patients and Compensation (Oct. 2004). Families Fund 20 199 Sanders, Memorandum from Robert L. Milliman & Inc., Robertson, Chief, Bubolz, Compen Danford C. Patients (Jan. (available 18,1995) sation Fund 4 in Bill File for 1995 Wis. Act at Legislative Council, Madison, 10 the Wisconsin Wiscon sin).
654 health care provid- from million less assessments the Fund would have $1,000,000, If the were cap ers.200 over that million less in assessments take $32.3 five-year period.201 decreasing have been Fund assessments In from the Commis- years.202 reports five
over the 2005, 2003, 2001, 1999, and Insurance, sioner only that "the dis- indicated the Commissioner care $350,000 "on health of the impact" cernible a reduction" Fund assessments has been providers a below, as we reduc- event, explain In any collected.203 200 Representative from Peter Farrow to Memorandum (available (Jan. File 24,1994) in Bill for 1995 Wis. Sheryl Albers WI). Council, Madison, Legislative Act 10 at Wisconsin Sanders, & from Robert L. Milliman Memorandum Chief, Inc., Bubolz, Compen Robertson, Patients to Danford C. (available (Jan. 18,1995) in Bill File for 1995 Wis. sation Fund WI). Council, Madison, Legislative Act 10 at the Wisconsin providers in from health care fee assessments taken Total million if there was be five-period $335.2 for the relevant would damages; million with $267.4 on noneconomic no $1,000,000 cap. Memo- cap; and million with $302.9 Robertson, Inc., to Sanders, L. Milliman & from Robert randum (Jan. Bubolz, Chief, Compensation Fund Patients Danford C. 1995) (available 1995 Wis. Act at in Bill File for WI). Madison, Council, Legislative Wisconsin #450 at 4. Legislative Paper Fiscal Bureau *67 Insurance, of Office of the Commissioner Wisconsin 2005) 12, (May Act 10 Impact 1995 Wisconsin Report on the of only discernable determined the ("Analysis of these statistics the million ... reduction in $89 has been an estimated effect... over the last seven levels ... actuarially determined assessment Insurance, of the Commissioner years."); Office of Wisconsin 12, (May Act at Impact 1995 Wisconsin Report on the of 2003) ("[T]he Act 10 on of only impact Wisconsin discernable . .. in fees collected providers has been reduction health care tion in the assessments is not necessarily germane to the objectives of legislative health to lowering costs consum- ensuring ers or the of availability doctors in the state. 155. The of goal lowering health care provider assessments the raising motivated minimum of amount insurance health care re- providers are from quired carry $400,000 per occurrence $1,000,000 year $1,000,000 per per occurrence and $3,000,000 per year.204 Testimony Peter by Farrow of of Office the Commissioner of Insurance to the over the last seven years."); Wisconsin Office of the Commis Insurance, of Report sioner on Impact 1995 Wisconsin of 2001) ("[T]he (July 25, Act 10 only impact discernable of Wisconsin Act 10 on health providers care has been reduc years. However, tion in fees collected . . . over the last five experience loss to date is too immature to validate the reduc tion."); Insurance, Wisconsin Office of Commissioner of 1999) Report Impact on the (May 6, 1995 Wisconsin Act 10 of ("Analysis of these statistics determined only discernable reductionQ effect these areas has been . [a] . . of fees years. However, collected . . . over the last five it was further experience noted that loss to date is too immature to validate reduction."); Wisconsin Office of the Commissioner of Insurance, Report Impact on the (May Wisconsin Act 10 of1995 1997) ("While analysis of these statistics determined that enough elapsed not time has since the enactment Act 10 to analysis for a impact, allow conclusive its it should be emphasized explicit recognition that been has made setting process the annual fee for the Fund. Specifically, a paid in . . reduction . fees providers Wisconsin health care 1997-1998."). years through fiscal 1995-1996 may Another factor may that or not have contributed to providers lower assessments health care required were carry in 1997 to primary increased levels of Insurance, insurance. Wisconsin Office of the Commissioner of 2005). Report Impact (May 12, on the 1995 Wisconsin Act 10 2041997 Wis. Act 11. *68 Judiciary following Assembly the on offered Committee regarding raising the minimum amount of observation providers malpractice care would have health insurance carry: the Fund and the Plan have estimated The actuaries for $l,000,000/$3,000,000] increasing [to the threshold that providers pay in fees result in a reduction will policyhold- 21 increase to Plan percent, Fund of an on percent, depending pro- 19 to ranging ers from 32 vider class.205 saying effect, the Commissioner is
In Office may providers health Fund on care while assessments go corresponding down, be increase there will a malpractice providers in their insurance health care providers premiums. fact, for health care In some may premiums be insurance increase greater Any Fund than reduction in assessments.206 raising assessments as result reduction Fund required an insurance must be viewed with level of understanding medical insur- that costs of private be result insurers will will rise as a because ance increased amounts. liable for may go down,
¶ 156. So while Fund assessments necessarily providers care be that health it cannot said Act reduction as result of Wis. from the benefit Insurance, Office the Commissioner Wisconsin Assembly Assembly Bill 248 Testimony Relating to Before (available 1997) Judiciary at Committee (Apr. WI). Madison, Council, Legislative Wisconsin catego broad against are levied The Fund's assessments malprac compared as with providers of health care ries underwrit nuanced which reflect more policies, insurance tice ing of risk. requiring providers
ll's health care to shoulder more of *69 private malpractice the burden for insurance. played important ¶ 157. The Fund also has an contributing reputation role in to Wisconsin's as a place providers practice.207 desirable for health care to only Since the Fund in 1975, was created 609 out of payment by 4,944 total claims have resulted in only pay Fund.208Not has the Fund not had to out in naming over 87% of medical claims huge jury Fund,209 but Wisconsin has "not seen the reported verdicts that have states, been in other al- though range occasionally high verdicts here as as three eight jury to million dollars."210The nature of verdicts in Wisconsin has been attributed to Midwesterners' sensibility.211 example, For "Wisconsin settlements and jury per people verdicts out $1,711 1,000 worked to be "Pennsylvania, payouts in the state" in 2001, while per people."212 1,000 came $27,268 ¶ 158. The Fund has flourished both with and cap. cap impact a without If the amount of the did not stability any appre- the Fund's fiscal and cash flow in caps ciable manner when no existed or when a $1,000,000 existed, then the rational basis standard requires justify rationally more to $350,000 as related to the Fund's fiscal condition. 207Wedekind, supra note at 2.
208 Id. at 1.
209 Id. at 2.
210 Id. at 1. 211 Tanya Albert, A Tale Two Ap States: Different proaches Tort at (May available 2003), Reform http://www.ama-assn.Org/amednews/2003/ind03.htm#05.
212 Id. legislature's to the fourth 159. Next we turn objective, lowering for overall health care costs of health care. consumers question is whether 160. The we must answer of facts from which the
there is conceivable set legislature cap on non- $350,000 conclude that a could interest con- economic furthers the state's trolling costs for health insurance thereby controlling providers, health care care costs people of the state.213 previously, explained 161. As we have *70 damages appears, cap blush, to at first on noneconomic objective keeping legislative overall to the of be related theory underlying down. The central health care costs by companies cap large payouts is insurance that settlements) (because large judgments raise mal- theory premiums. practice Therefore, insurance compa- goes, on means insurance a limitation companies pay are Because insurance nies paying out less. premiums they to reduce the less, out will be able premi- they charge providers. If insurance health care providers to be able decrease, care should health ums pa- lowering charge thereby for health care costs less, tients. logic problem that even with this 162. The malprac-
assuming affects medical 213 report Attorneys General A Association National as result of a risen not insurance rates have concluded that management. poor as a result of crisis but malpractice industry en malpractice Furthermore, the medical insurance Gfell, insurance sectors. comparable than joys higher profits (citations omitted). 12, note at 803-04 supra tice premiums insurance and the Fund's assessments providers, health care medical malpractice insurance premiums are an small exceedingly portion of overall health care costs.214 163. Overall health care costs the United are in annually,215
States excess trillion and are $1 to reach expected by trillion 2006.216 The direct cost $2 of medical malpractice insurance is less than per- one cent of total health care 1992, costs. For example, (citations omitted). Gfell, supra note at 800
Because the cost of medical premi- insurance represents only component ums a small of the total burden consumers, borne health care Supreme Alabama Court damage concluded that "the correlation between the ... and the reduction of health to is, care costs the citizens of Alabama best, Ass'n, at indirect and remote." Infirmary Moore v. Mobile (Ala. 1992). 592 So. 2d Sager Socolar, Alan & Care Deborah Health CostsAbsorb Growth, (Feb. One-Quarter 2000-2005, 9, 2005), Economic http://dcc2.bumc.bu.edu/hs/ushealthreform.htm. available at Committee, Joint Liability Economic Medical Mal practice: 2003), Issues and 23 (May Evidence at available http://www.house.gov/jec/tort/05-06-03.pdf. Congress The U.S. Joint conjunction Economic Committee recently, has with pass efforts reform, federal medical tort issued policy papers "focusing on the impact [of] cost and excessive litigation" on health care costs. Id. at 1.
The Joint Economic primary reviewing Committee's task is economic conditions improvements recommend in eco- *71 policy. nomic independent The Committee not an nonpar- or organization. tisan makeup Committee's reflects the makeup of the U.S. of Representatives House and U.S. Senate. This means that 60% of Committee's current members are (six Party members of Republican representatives and six (four senators); 40% are Party members of the Democratic senators). representatives and four The current chairman of (R-NJ). Representative Committee is Jim Saxton 660 in dollars premiums, five to six billion doctors paid reached health care nationwide cost of the overall while findings is consistent with This billion.217 $840 mal- conclude that medical who commentators several from 0.56% range costs insurance-related practice The non-partisan care costs.218 of overall health 2% 217 (citations omitted); Berger, Gfell, 12, supra note at 800 omitted). (citation 146, at 176 supra note
218See, An Simpson, Compulsory Arbitration: e.g., David B. Step Towards Malpractice and Instrument Medical Reform 457,459-60 Costs?, Legis. Hall J. Care 17 Seton Reduced Health (1993) the total percent not even one (finding that 1991 attributed to medical health care could be costs associated with Rasor, Mandatory Medical Dennis J. premiums); malpractice Reevaluate, 9 Ohio St. Panels: A Need to Screening Malpractice (1993) 115, (concluding "[t]he cost of 119 Disp. J. on Resol. greatly responsible not be insurance can Morrison, care."); of medical David increase in the cost for the Jury Are Not a Solution Savings: Caps on Verdicts In Search of (1995) Crisis, 141, Rep. 149 Loy. Consumer L. Health Care 7 in a not resulted cap on has (showing that Indiana's Ross, Note, consumers); Will Jacqueline care savings for health Us, Damage Caps in Medical From Equally, Protect States (medical (1997) 575, 30 Ind. L. Rev. Litigation?, Malpractice tiny percentage of overall rates are a malpractice insurance Thomas, Malpractice costs); The Medical care W. John health Debate, L. Temp. a Public A Critical Examination "Crisis": (1992) premiums (malpractice insurance 459, n.329 Rev. costs); Horen- care Thomas percent of health are less than one Malpractice Legis Comment, Florida Medical The New kamp, Miami L. Challenges, 58 U. Likely and Its Constitutional lation (2004) (medical premi insurance 1285, 1326 Rev. expenditures care percent of total health amounted to one ums 2004); 2000, percent one approximately 0.56% in Radically in a Weiler, Reforming Malpractice Medical Paul C. Fashion, L. Rev. 54 DePaul Moderate —and Ethical — (2005) approxi litigation costs are (malpractice insurance Boehm, costs); Geoff total health care mately percent of one *72 Congressional Budget recently Office found that "even large savings premiums only can have a small direct impact spending private on health care or — governmental malpractice costs account for —because percent spending."219 less than of that figures ¶ 164. The are similar in Wisconsin. Of every spent on health care in $100 Wisconsin between 2002, 1987 and than less one dollar can be traced malpractice medical related costs.220 Therefore, 165. if $350,000 even on damages malprac- noneconomic would reduce medical premiums, tice insurance this reduction would have no Accordingly, effect on a consumer's health care costs. objectively there nois reasonable basis to conclude that cap justifies placing such a harsh burden severely injured on the most vic- many tims, of whom are children. agree
¶ 166. We with those courts that have de- caps termined that the correlation between on noneco- Debunking Malpractice Myths: Medical Unraveling the False Reform", Behind Premises "Tort Pol'y 5 Yale J. Health & Ethics (2005) 357, (suggesting the cost of medical malpractice costs). percent insurance is about two of total health care 219Congressional Limiting Tort Liability for Office, Budget (Jan. Malpractice 2004) (available Medical in Matthew Supplemental Ferdon's Appendix). Medical steadily insurance costs have de percentage creased as a expenditures health care in Wisconsin just from over expenditures 1.01% of health care in 1987 to .402% years decrease is in both with and a cap without awards. See Amicus Brief of Wisconsin damage Lawyers, Academy C-l, Trial Appendix calculations derived from Office of Insurance, the Commissioner Wisconsin Insur Report years 1987-2002, ance Bureau, and U.S. Census Statisti cal Abstract of the United States: 2003 at reduction of medical malprac- and the nomic *73 care is at best or overall health costs tice premiums remote.221 indirect, weak, and Wisconsin, care in To ensure health quality retain health care providers. has to attract and state dependent of health care is availability providers
The
medical mal-
reasonably
of
availability
priced
on
insurance,
legislative
to the 1975
according
practice
cost and
"[t]he
declared that
legislature
findings.222
Moore,
See,
Martin,
204-05;
2d at
592 So.
e.g.,
192 Wis.
("We
that
the correlation between
2d at 168
conclude
6-5-544(b)
by §
and the reduction of
damages cap imposed
best,
is,
indirect
of Alabama
at
health care costs to the citizens
("We
Carson,
find that
remote.");
damages do not affect doctors' migration. The non- U.S. General Office partisan Accounting concluded doctors do not to leave or appear practice enter states to on based caps
malpractice actions.224 The Accounting General Office found that despite extensive media coverage physi- states, cian from departures the numbers of physician departures reported were sometimes inaccurate were low.225 actually relatively The General Accounting *74 Office reported further that the it able problems was Understanding Pennsylvania's Malpractice Medical Crisis (2003), at http://medliabilitypa.org/research/. available The re- port does mention not the national market share of insur- company withdrawing market, ance that is but from that group only Pennsylvania insurance accounted for 3.3% of the market. report specific Id. at The draws no conclusions Pennsylvania, noting "Pennsylvania outside of that has been especially concludes, hard hit." Id. at 45. The report "No clear yet evidence as to exists the effects of the crisis on Pennsylvania's system." health care Id. 223Maurin, Appendix (legislative 274 Wis. 2d at findings). 224U.S. Accounting Office, General Malpractice: Medical Care, Implications Rising Premiums on Access to Health of 2003) (find- (Aug. GAO-03-836 http://www.gao.gov available at ing data, that on based available is no there indication that premium widespread increased costs had a impact on health access; care the American Medical disputed Association these findings). Accounting 03-836, U.S. General Office Medical Mal-
practice: Implications Rising Premiums on to Health Access of 29, (Aug. 2003), Care available at http://www.gao.gov. shortages confirm about of doctors were limited to instances, in rural scattered often locations. Office cases, found that most identified providers long- factors in addition to standing malpractice pressures that affected the of services.226 availability 169. The conclusions reached General Accounting Office are other supported by reports studies.227
226Id. at 13.
227See, Boehm, e.g., supra at & n.17 note 360-61 in (citing several studies that concluded medical state). leaving are the cause of surance rates not doctors provider specialties in a Isolated health care few states have vigorously malpractice premiums driving asserted that are Rallo, practice. Lauren them out of state or See Elizabeth Comment, Malpractice The Medical Crisis—Who Will Deliver Tomorrow?, Today, Contemp. the Babies the Leaders 20 J. (2004) Pol'y (discussing protests Health L. & 510-511 states, by surgeons "problem" and obstetricians several one). is not which Wisconsin all reached the conclusion as the
Not studies have same Accounting study. study suggested Office One recent General types of caps supply have resulted in an increased of certain Hellinger, Fred J. doctors in rural areas. William E. Encinosa & Supply Increased The Caps Malpractice Have State On Awards 31, 2005), http://www.healtb.af- Physicians? (May available at article, journal fairs.org.The published by the online Health damages in mal- caps that state Affairs, also noted in 1985 had more of an effect than practice actions instituted explain cannot caps instituted in 1975. Id. The article *75 anomaly. or address the fact The article also does not mention cap malpractice damages from that Wisconsin had no on Further, cap noted that if the state's 1991 to 1995. the article $250,000, effect on set at a level over there was no amount were $250,000 there doctors; cap if the amount were was supply specialties in only supply a increase in the of doctors for some 2% study findings makes as to health care rural areas. Id. The no Office of the Commissioner 170. The Wisconsin of 1995 of Insurance's biennial on the reports impact Act 10 examine the Act's on the number of impact Wis. 655.002, only § providers as defined Wis. Stat. the much category physicians. narrower of licensed study unpublished paradoxically An from 2003 reaches the $500,000 cap a on noneconomic in- conclusion that state, $250,000 physicians cap in a but a creases the number of (or lower) say,according study, there is does not. That is to significance cap pertains no statistical to a as it physicians in a See Jonathon Khck & Thomas number of state. Stratmann, Malpractice Help DoesMedical States Retain Reform (Oct. 2003) Physicians (unpublished and Does It Matter? 9 manuscript, http://papers.ssrn.com/sol3/paper- available at study caps The also notes that s.cfm?abstract_id=453481). malpractice damages physicians, total medical do not attract may away. patients' in fact them Id. The same drive with fund, compensations may physi- funds: If a has a it state drive study cians out of the state. Id. at 9-10. The offers no firm conclusion as to the reason behind the inconsistent results. study
Yet another 2000 in indicates between 1970 and damages, caps percent states with on noneconomic increase physicians per capita the number of was 95.7%. For states overturned, cap, with no or that was the increase physicians only Hellinger was 79.1%. Fred J. & William E. Encinosa, Services, Dept, Impact U.S. of Health & Human Limiting Malpractice Geographic State Law Awards on the 2003). Physicians (July Distribution No state listed this study, cap, with or without a showed a decrease in the number fact, physicians. saw, according study, In Wisconsin to this an However, in physicians study increase of 104.5%. fails to examined, 30-year period take into account that for the Wis- approximately did consin not have half that time. in physicians Wisconsin's increase is consistent with 11 other caps damages, states with no on noneconomic and Wisconsin had a than smaller increase seven states without noneconomic (Alabama, damage caps Maine, Jersey, Carolina, New North Tennessee). Island, Rhode South Carolina and *76 providers in health care Wisconsin. The Commissioner's slight report 2003 shows decrease the number of providers. 2005, 2001, The Commissioner's 1999 slight reports show a increase the number of health providers.228 reports care The Commissioner's do not attribute either the or in the increases decreases num- providers 10, ber of health care to 1995 Act much Wis. damages cap.229 to the $350,000
less evidence, 171. Based on the available we cannot conclude that a on noneconomic rationally objective ensuring quality related of by creating health care providers an environment that health care likely likely into, are to move or less to move of, in out Wisconsin. available evidence indicates providers practice in that health care particular do not decide to state based on the state's on noneco- damages. nomic
228 Insurance, Wisconsin Office of the Commissioner of 12, 2005); Report Impact (May on the 1995 Wisconsin Act of Insurance, Report Wisconsin Office of the Commissioner of on 12, 2003); Impact (May Act 1995 Wisconsin Wisconsin Insurance, Report Impact Office of the on the Commissioner 25,2001); (July Act 10 Office of the Wisconsin Wisconsin of1995 Insurance, Report Impact Commissioner of on the 6, 1999); (May Office Wisconsin Act 10 Wisconsin Com Insurance, Impact Report missioner of on Wisconsin of1995 1997). (May Act 10 study by University Duke Neil The recent Law Professor Association, Vidmar, commissioned the Illinois State Bar despite by the American Medical Associa reported that claims leaving that doctors were the state as a result of medical tion premiums, and a the facts did not malpractice actions rise Vidmar, Malpractice Medical support the AMA's assertion. Neil System Report and the Tort in Illinois: A to the Illinois State Bar 2005) Association, (May (provided 73-82 to the Illinois General 2005). Assembly May Closely access is related to concerns about Among practice medicine."230 of "defensive legislature's findings that as a result of medical were *77 providers care are often actions, "health protection, employ required, to extensive for their own thereby patients, diagnostic procedures in- their creasing patient Defensive medi- the cost of care."231 argument goes, up health drives the cost of cine, the providers expensive will order care because health care unnecessary they if to have to tests ensure say they against they claim, can defend themselves patient. everything possible for the health of the did support for the asser- There is anecdotal practice medicine,232 al- that doctors defensive tion though "accurate measurement of the extent of this an virtually impossible."233 phenomenon The Wisconsin Study Legislative file contains a Council Committee bill 230 occurring has been defined as "when Defensive medicine tests, visits, high-risk procedures, or or avoid doctors order exposure ... to reduce their to patients procedures, primarily or Assessment, liability." Technology U.S. Office of Congress, Malpractice Medicine and Medical Defensive (1994), http://www.wws.princeton.edu/~ota. available at
231 l(l)(f), § ch. of 1975. Laws Association, Liability Re American Medical Medical - (Dec. 3, 2004), http://www.ama- at NOW! 8 available form (indicating "believe assn.org/go/mlrnow that 76% of doctors liability litigation negatively that concern about medical has years."). ability provide quality to care recent affected their Technology Assessment, Congress, Office of U.S. Defen (1994), Malpractice and Medical 3-4 available at sive Medicine http://www.wws.princeton.edu/~ota. But see American Medical - (Dec. Association, 3, 2004), Liability Medical NOW! 8 Reform ("The costs of http://www.ama-assn.org/go/mlrnow available at defensive medicine are estimated to be between $70-$126 per year."). billion
number of letters from doctors who assert they have practiced defensive medicine. Similarly, the General Accounting Office recently found anecdotal evidence of practice defensive medicine health care pro- viders.234 174. Three independent, non-partisan govern- agencies
mental have found that defensive medicine cannot be measured accurately does not contribute significantly to the cost health care.235 The General Accounting study Office found that "the overall preva- GAO-03-836, U.S. Accounting General Office Medical Malpractice: Implications Rising Premiums to on Access 2003), (Aug. Health Care 6 available at http://www.gao.gov. study
One limited elderly patients to Medicare with heart attempts quantify disease which prac- extent to doctors tice attributing defensive medicine without its conclusions *78 caps damages alone, on noneconomic rather but to a combina- eight tion of different reform measures. Daniel Kessler & Mark McClellan, Medicine?, Quar- Do Doctors Practice Ill Defensive (1996). terly J. of Econ. study's 353 conclusion is that elderly patients "treatment of with heart disease does involve practices 'defensive' medical .. . ."Id. at 388. The authors of the study longitudinal elderly "use[d] data all recipi- on Medicare (acute hospitalized ents for treatment heart of new attack AMI) myocardial infarction, or or newof ischemic heart disease (IHD) 1984, 1987, and 1990..." to draw their limited study conclusions. Id. at 354. The also defined "defensive turn, socially care," which, medicine" as "a excessive level of "high expenditures year was defined as life ... Id. per of saved ." at if 355. Medicine was not "defensive" it did not cost as much to keep patient alive. 235 Technology Assessment, Congress, Office of U.S. Defen (1994), Malpractice
sive Medicine and Medical 4 at available http://www.wws.princeton.edu/~ota; Accounting U.S. General GAO-03-836, Implications Office Malpractice: Medical Ris of 2003), ing (Aug. on Premiums Access to Health 5-6 Care Congressional Budget Office, at http://www.gao.gov; available medicine] [defensive not have been lence and costs Findings reliably defensive medi- measured."236 about surveys providers, care health cine must be based on those care if or surveys typically providers] [health ask how not practiced medicine but they have defensive addition, very physi- In few practices. of such extent surveys, raising respond tend to to these doubt cians prac- accurately responses their reflect the how about results] cannot providers]. [health [The of all care tices broadly generalized [beyond anecdotal evi- be more dence].237 that defensive medicine
Other studies have concluded significantly affect the of medicine238 does not cost (Jan. 2004) Liability Malpractice Medical Limiting Tort (available Supplemental Appendix). Ferdon's Matthew GAO-03-836, Accounting Medical U.S. General Office Rising Implications Premiums Access Malpractice: Care, 2003), (Aug. http://www.gao.gov. at 6 available at Health Id. at Assessment, Technology Congress, Office of U.S. Defen (1994), Malpractice available at Medicine and Medical sive http://www.wws.princeton.edu/~ota. accurately impossible measure the overall level and
It is cost of defensive medicine. national Overall, percentage diagnostic procedures certainly a small — percent likely primarily to be conscious less than 8 caused —is *79 liability. malpractice is based concern about This estimate responses hypothetical physicians' that were clinical scenarios hence, designed malpractice-sensitive; to he it overestimates the consciously practiced is rate at which defensive medicine diagnostic situations. at 1. Id. may
"that 'some so-called defensive medicine be moti- by liability by vated less concerns than the income it (albeit small) generates physicians positive for or patients Congressional [The Budget benefits to .... savings Office] reducing believes that from defensive "239 very medicine would be small.' suggest evidence does not that a rationally on noneconomic is objective ensuring quality related to the of care health by preventing practicing from doctors defensive medi- agree non-partisan Congressional cine. We with the Budget finding Office's that evidence of the effects of defensive medicine was "weak or inconclusive."240 Supreme 176. The North Dakota Court, reach- ing invalidating the same result we case in reach this North Dakota's on medical economic damages, holding and noneconomic summarized its well, as follows: beginning opinion quoted
At the of pre- this we statute, amble containing of the legislative purposes. its availability These include of competent assurance hospital cost, medical and services at reasonable elimi- 239Boehm, supra 218, (citing Budget note at 363 Cong. U.S. Office, Limiting Liability Tort Malpractice Medical for (2004)). See also Troyen Brennan, M. Mello Michelle & A. Theory Deterrence Medical Malprac Errors: and Evidence for (2002) Reform, tice (discussing 80 Tex. L. Rev. liability potential deterrent effects medical " indicating medicine, likely [i]t that that defensive diminished place, extent it ever took has time in over care."). response growing managed presence to the 240Congressional Office, Limiting Liability Tort Budget (Jan. 2004) (available Malpractice Medical in Matthew Supplemental Appendix). Ferdon's *80 mal- in nonmeritorious involved expense of the
nation compensation claims, adequate provision practice claims, encourage- and the patients with meritorious in North practice into physicians to enter ment of long they are practice so as in such Dakota and remain qualified to do so. seriously damaged or recovery
Does the limitation negligence promote these medical injured victims of it not and that violates that it does aims? We hold of the State Constitution. Protection Clause Equal provide recovery does not Certainly the limitation of meritorious patients with adequate compensation just opposite claims; contrary, it does on the nothing to- It does seriously injured claimants. most Restric- claims. elimination of nonmeritorious ward the to enter recovery may encourage physicians on tions only at practice, but do so and remain practice into meritorious claims.241 expense of claimants with OTHER STATUTES V (and amici who support The Fund down the striking argue Fund's position) for common-law on noneconomic in a mean the end to caps actions will sky falling" "the is contexts.242 This of other variety our decision We rest argument unpersuasive. 241Arneson, at 135-36. 270 N.W.2d conjunction received in non-party briefs were Numerous filed the Wisconsin Non-party were this case. briefs with Justice Coalition for Civil Academy Lawyers; Trial Wisconsin Commerce; Wisconsin Hos Manufacturers and Wisconsin Association; Hospital American Association, Inc. and the pital Company Alliance, Physicians Insurance Insurance Wisconsin Casualty Association of Property Insurers of Wisconsin American Society and the America; Medical and Wisconsin Medical Association. protection grounds.
equal Thus, the is limited decision (Wis. 893.55(4)(d)) §§ to the statutes Stat. 655.017 and at motivating in the case and the facts and issue instant rationales *81 supporting
and the enactment of the stat- utes. constitutionality
¶ To determine the of a 178. statute, the classification in the statute be ana- must objectives lyzed along with the of the statute. The analysis equal protection of each statute under will be warrant, different if circumstances so because the facts motivating supporting and rationales and the enact- likely ment of the statutes will most be different. Past challenges impact to various statutes that Wisconsin damages point. awards illustrate this impinge
¶ First, 179. our decision does not on the guaranteed recovery compensation no-fault workers' system against replaced employ- action causes of ers. perhaps closely Second, 180. and more analo-
gous damage cap on in the to the awards § caps case, 81.15, is Wis. Stat. which instant by recovery damages damages actions for caused highway This statute has survived a constitu- defects. challenge.243Municipalities immune from tional were adoption constitution, suit at the of the Wisconsin public a of numerous concern about finances as result highway against municipalities for defects has actions justified cap involved that statute. argu- point Third, amici us to another also comparative negli-
ably analogous statute: Wisconsin's 895.045(1). § gence provision, set forth Wis. Stat. damages, provide cap but it not a on This statute does City Brookfield, v. See Sambs 97 Wis. 2d (1980). N.W.2d
adjusts particular the amount of owed a negligence comparative of the defendant based on the argue plaintiff. Amici do not that this statute violates equal protection.244 The amicus of the Coalition brief Wisconsin Manufacturers and Com-
for CivilJustice Wisconsin gives yet example proponents another of what merce statutory "manipulation" jury damage of a call award, the so-called "seat belt defense."245This statute damages. jury operates a reverse If a makes a as damage finding, example, of the caused to that 30% plaintiffs plaintiff is due to the failure to wear a seat ceiling plaintiffs belt, the statute creates a on the liability for failure wear a seat belt at 15%. The argument go right by jury. to the to trial No seems challenges equal protection been made to the seat have *82 belt defense statute.
¶ 183. are therefore unconvinced that our We holding today any way any of the stat- undermines by utes discussed the Fund and amici.246 CONCLUSION
VI. presume ¶ that 184. The court must legislature's judgment support was sound and look for legislative accept for act. But the court cannot they justify any speculative rationales so broad and Guzman, (Schudson, J., 2d See 240 Wis. 54¶ right dissenting) (asserting this statute is consistent with by jury). trial 347.48(2m)(g). § See Wis. Stat. damages limit in certain circumstances. Other statutes parties.
These statutes have not been raised or briefed "[WJhile means and the connection between enactment. precise, it, least, at must have some ends need not be objective basis."247 concept judicial
¶ adhere to the 185. While we against substituting judicial opin- that cautions restraint legislature, of the we do not abdicate ion for will judicial responsibility. To a rational exists hold that basis damages statutory cap $350,000 on noneconomic for the applying amount to in medical cases would judicial stamp to an unconstitutional statute. rubber cap from the 186. The invalid can be severed frustrating chapter remainder of 655 without Chap- enacting chapter legislature's purpose in 655.248 has existed both with and without ter 655 damages since 1975. forth, set we conclude that 187. For the reasons challengers and have dem- have met their burden §§ $350,000 in Wis. Stat. 655.017 onstrated that the 893.55(4)(d) beyond a reason- is unconstitutional cap on noneco- hold that the able doubt. We set forth Wis. nomic medical 893.55(4)(d) (adjusted §§ infla- 655.017 and Stat. tion) protection guarantees equal of the violates the not, and do therefore need Constitution. We Wisconsin challenges Mat- other constitutional not, address the against cap. thew Ferdon asserts forth, do not address set we 188. For the reasons questions presented and remand and third the second Accordingly, reverse the court. we them to the circuit appeals remand the cause to the court of decision of *83 proceedings further not inconsis- the circuit court for opinion. this tent with
247
(Blackmun, J., concurring).
442
Logan,
By appeals the Court.—The decision of the court of reversed and the cause remanded. {concurring). CROOKS, I 189. N. PATRICK J. join majority opinion holding and its that cap $350,000 on noneconomic medical dam- (2001-02) 893.55(4)(d) §§ ages in Wis. Stat. 655.015 inflation) (adjusted equal protection violates the guarantees I, of Article Section 1 of the Wisconsin majority op., separately, I Constitution. See 10. write emphasize statutory caps however, to on noneco- malpractice cases, nomic tory in medical or statu- general, caps in can be constitutional. While the majority states that this case does not take issue with the constitutionality statutory caps, majority op., of all see caps satisfy I13, want to stress that such can requirements I However, of the Wisconsin Constitution. cap am convinced that the current on noneconomic malpractice damages is unconstitutional. The legislative objectives, stated in when reviewed accord provide justifica- test, awith rational basis insufficient equal protection and, tion for that under the clause satisfy right further, is too to to low jury guaranteed I, 5,1 a trial as in Article Section when conjunction right remedy considered in in with to I, Article Section 92 of the Wisconsin Constitution. I, Article Section 5 of the Wisconsin Constitution states in part:
relevant right by jury inviolate, of trial shall remain and shall extend regard controversy; all cases at law without to the amount in jury may by parties but a trial be waived in all cases in the by Provided, however, prescribed legislature manner law. that the time, verdict, may, provide from time to statute that valid cases, may specified civil be based on the votes of a number of the jury, not less than five-sixths thereof. I, Article Section 9 of the Wisconsin Constitution states part: "Every person remedy is entitled a certain relevant *84 history behind the Wisconsin, the In damages setting caps legislature's noneconomic for arbitrariness, demonstrates actions medical justifying rational basis that a to a conclusion and leads lacking. cap Stat. ch. present is, When Wis. was, and the cap on was no there first enacted 655 was cap damages, conditional $500,000 but noneconomic Compen- triggered if Patient the Wisconsin could be majority op., jeopardy. See was in cash-flow Fund's sation ¶ cap legislature the at set Then, cap in effect until remained $1,000,000 $1,000,000. This provision There effective. became a sunset 1991, when damages cap 1991until the from on noneconomic nowas statutory cap legislature passed $350,000 the current nothing, caps changed to from Thus, in 1995. finally nothing, $350,000 over to back to $1,000,000, years. course of 20 history legislative current behind this ¶ 191. The justification for cap no rational basis reveals further involved, as settling The bill $350,000. amount on the at originally noneconomic drafted, set were of alternatives However, a number $250,000. ranging process, legislative throughout suggested nothing, $350,000. $250,000, to to $1,000,000, to from providing $350,000, without at final act set the original jump any explanation from the for quite appears op., majority ¶¶ It 136-37. $250,000. See legislature for the on an amount settled that the clear damage cap for basis a rational without figure plucked doing was as if the It seems so. may receive in his he wrongs which injuries, all or the laws freely, justice character; ought to obtain he property, or person, it, completely being obliged purchase and without conformably delay, denial, and without promptly without laws." arbitrary cap, majority op.,
out of thin air. Such an see equal protection ¶¶ 10,177, "isviolative of the clause in unduly Constitution, Wisconsin since it burdens claimants without a rational basis *85 justifies legislative objectives. that ..." its stated Mau Hall, rin v. 2004 100, 214, WI 274 28, Wis. 2d 682 (Abrahamson, 866, N.W.2d Crooks, C.J. and J., concur " ring). Statutory caps reasonable, 'must be not arbi trary, upon ground and must rest some of difference having object a fair and substantial relation to the legislation' satisfy equal protection the guarantees." in order to State (N.H. Maurer,
Carson v.
nomic
I,
violates Article Section 5 when linked
to
I,
Article
Section
of9
the Wisconsin Constitution.
Although
majority opinion
fully
the
does not
address
provisions
issue,
this
I conclude that these two
of the
may
applied together
Wisconsin Constitution
be
to
damages cap
determine whether the noneconomic
unreasonably
making
$350,000 was set
low, thus
it
unconstitutional on that
as
Maurin,
basis well. See
274
(Abrahamson,
¶ Wis. 2d
C.J. and Crooks, J,
concurring).
jury
In
case,
this
awarded Ferdon
damages.
$700,000 in noneconomic
The circuit court,
damages
however, had no choice but to reduce these
to
equivalent
cap adjusted
$410,322
of the $350,000
—the
Consequently,
significant
for inflation.
Ferdon lost a
portion
damage
of the full
award—more than percent
by
jury.
jury
determined
verdict for
—as
damages
by
light
was reduced
$289,678 in
of the
cap.
recognize
legislature
$350,000
While I
may place
statutory cap
damages
a
on noneconomic
in
cap
medical
actions, the
cannot be set
unreasonably
appropriate
If $1,000,000
low.3
was the
figure
cap
cap
$350,000
in
how can a
requirements
years
satisfy
nine
the constitutional
effec-
later? "Such a low
tively
on noneconomic
plaintiffs
right
the constitutional
to trial
denies
by jury
turn,
I,
and,
under Article
Section
remedy
guaranteed by
I,
Article
as
Section
(footnote omitted).
Id.
Wisconsin Constitution."
I
Chief
and noted
193. As
Justice Abrahamson
jurisdictions
concurrence,
Maurin
other
have
resulting
found similar state constitutional violations
damage caps
from
Supreme
example,
Florida
Court struck
For
actions.
impose
legislature's attempt
down
its
damages.
Department
In Smith
on noneconomic
v.
(Fla. 1987),
Insurance,
Access to courts for, jury e.g., a plaintiff A receives verdict injuries. who $1,000,000, not redress for has received constitutional statutorily, arbitrarily, legislature injuries if the $450,000. Nor, add, recovery at we because the caps the being arbitrarily capped, plaintiff verdict is jury benefit of a trial as we receiving the constitutional Further, right. if the heretofore that have understood statutory cap set agree majority opinion with the that a 3 I protection clause of the may equal too also violate the low statutory that limit on Constitution: have said Wisconsin "We if may equal protection guarantees tort violate recoveries unreasonable, is, if the limitation is is harsh and limitation damages to the sustained." considered in relation too low when (citations omitted). Majority op., ¶ legislature may constitutionally cap recovery at $450,000, there is no why discernible reason it could cap recovery not at figure, some other perhaps $1,000, or or even $1. Id. at 1088-89. Supreme Maine, In Judicial Court de- statutory cap
termined that a
set too low could result in
right
by jury
a denial of the constitutional
to trial
and a
right
remedy.
denial of the
to a
In Peters v. Saft, 597
(Me. 1991),
A.2d 50
the court stated that "it is conceiv-
able that a statute could limit the measure of tort
damages
drastically
so
that it would
result
a denial of
right
by jury
remedy...."
to trial
and the denial of a
thought
necessary
Id. at 53. Other states have
it
caps
grounds.4
overturn
on similar
particular
cap
In sum, I conclude that this
damages,
arbitrarily
on noneconmic
set
and unreason-
ably
by
legislature,
low the
I,
violates Article
Section
interpreted
conjunction
as well as Article I, Section 5
with
I,
Article Section
of the Wisconsin Constitution.
196. Wisconsin can have a constitutional
noneconomic
in medical
actions,
legislative
but there must be a rational basis so that the
objectives provide legitimate justification,
and the
rights
must not be set so low as to defeat the
4 See also
Malpractice
Bell,
Kansas
Victims Coalition v.
(Kan. 1988),
P.2d 251
overruled
in part
here,
not
by
relevant
Peck,
Bair v.
(Kan. 1991) (The
¶ costs in this 200. To stabilize system, legislature capped payment noneco- teed damages compensate patient for such nomic suffering. unquantifiable pain In harms as $350,000. it indexed for this Because was was cap today $445,755. inflation, the is damages part Caps on are noneconomic keep legislative strategy care afford- health broad way in a that will benefit Wisconsin- able and available exactly strategy Even this works ites as a whole. when limiting noneco- it has the effect of intended, as damages patients. for some nomic presented principal case in this issue damages in Wisconsin on noneconomic whether the constitutional. cases is irrespective court, members of 203. Some caps say opinion, they all in this believe that what In his con- are unconstitutional. *88 currence, Justice N. Patrick Crooks contends that some damage caps by are constitutional but not the set legislature the in this case. government provides 204. "Our form of for one
legislature,
Flynn DOA,
not two."
v.
—plaintiffs' lawyers, professionals, health care defense lawyers, groups, unions, consumer large and small And, business.... ultimately, legislators make judg- ment. If the people legislators who elected the do not solution, like the good the voters remedy every have a years: two retire supported those who laws the voters disfavor. Schwartz, Victor Judicial Tort Nullification of Reform:
Ignoring History, Logic, and Fundamentals Consti- (2001). Law, tutional 31 Seton Hall L. Rev. Today, majority ¶ 205. of this court utilizes unacceptable legislative several tactics to invalidate a act. majority
¶ 206. First, the relies on the Wisconsin Constitution, not the United Constitution, States nullify legislation. This tactic assures that the court's scrutiny legal decision will receive minimal from schol- by Supreme ars and no review the United States Court. majority Second, alters the test for reviewing constitutionality legislation equal protection grounds, legislation where the does not right. affect a fundamental It moves from a "rational long test, basis" law, established in our to an interme- scrutiny euphemistically diate test which it labels "ra- tional basis with teeth." lays groundwork majority Third, the damage caps preventing invalidating other responding
legislature this from decision. When from review the United insulates its decisions court Supreme response by Court and other branches States government, effectively destroying the *89 it is of state system. in our constitutional checks balances majority ¶ non- Fourth, 209. the marshals to undermine decisions studies articles Wisconsin legislature. our The use of in and for made Wisconsin comprehensive, selective, not so that these studies is legisla- support our studies that would non-Wisconsin disregarded. played down, overlooked, or are tion Finally, appli- ¶ 210. contradiction to the direct scrutiny, majority systematically mini- level of the cable support importance the consti- of facts that
mizes tutionality majority legislation. instance, the For of the types malpractice ignores insur- the fact that certain actually premiums Wisconsin, have decreased ance premiums climbed in other states. similar have while ¶ 211. I on three dissent, In this will concentrate majority's adoption I will First, discuss issues. reality, simply which, "is teeth," "rational basis with scrutiny an of the articulation intermediate without triggered I Second, it."1 will discuss factors that majority's sweep in relation rationale of the broad the court. narrow issue before Finally, majority's
¶ I 212. will take issue with legislature had rational basis for no conclusion that damage enacting malpractice the medical cap. Basis With Bite: Rational Pettinga, Note, Gayle Lynn Name, By Scrutiny Any Other Ind. L.J.
Intermediate (1987).
HH
disagree
¶
majority's
213. First, I
with the
ulti-
applicable
scrutiny.
mate determination of the
level of
Initially,
majority
agree
states: "We
scrutiny,
with the Fund that
basis,
rational
not strict
appropriate
scrutiny
present
the
Majority op.,
level of
in the
case."
opinion
gives
65. But the
rational basis
reappears
a "makeover," and it
as "rational basis with
("Whether
scrutiny
teeth."
the level of
is called rational
meaningful
basis, rational basis
teeth,
with
or
rational
apply
basis, it is this standard we now
in this case."
80.)
Majority op., ¶
implies
This obfuscation
that these
equivalent.
three standards are
apparent
It should be
these three
equivalent.2
different standards are not
The "rational
2 In a few cases
1980s,
decided in the
the United States
Supreme
appeared
Court
higher
to use a
order of rational basis
*90
review in a handful of cases
using
without ever
phrase
See,
"rational basis with
e.g., City
bite."
Cleburne v. Cleburne
of
Ctr.,
Living
432,
(1985);
473 U.S.
Vermont,
440
Williams v.
472
14,
(1985);
Williams,
(1982).
U.S.
22-23
Zobel v.
684
actually closer to the
teeth" standard is
with
basis
scrutiny"
to rational
of
than
basis
"intermediate level
1)
following
Compare
"Under
definitions:
review.
scrutiny, the classification 'must serve
intermediate
governmental objectives
important
and be substan-
objectives.'"
tially
of those
related to achievement
(citing Craig
Majority op., ¶
Boren,
190,
v.
429 U.S.
2)
(1976));
teeth
The rational basis with
standard
subject
Court and lower courts to
precedent
creates
for this
to similar and search-
and commercial classifications
economic
regrettable
small and
ing 'ordinary' rational-basis review—a
York,
45,
days
U.S.
of
v. New
step back toward the
Lochner
(1905)." Id. at 459-60.
539,
This court
judicial scrutiny." State ex
to "a middle level tier
equivalent
Servs.,
2d
122 Wis.
Community
r.el.
v. Combined
Watts
(1984).
Bureau,
Farm
n.8,
See also S. Dakota
deferential.
"Alegislative presumed classification is to be valid. proof upon burden is the challenging party to invalidity establish the statutory Any of a classification. reasonable basis for classification will validate the statute. ... The basic test not inequal- is whether some ity from classification, results but whether there any exists to justify reasonable basis the classification. response "Judicial to a challenged legislative clas- requires only sification reviewing that the court locate some reasonable basis for the classification made. The public policy legislature, involved not the courts, to determine." Sambs v. City Brookfield, 356, 371, 2dWis. (1980) (citation omitted). N.W.2d 504 Perfection is not required: test, the rational basis properly stated and
3 Pettinga, n.1, supra at *92 require a statute to treat all understood, "does not any identically, persons it that mandates distinction but purpose to the for which the some relevance have Doering Group, made." v. WEAIns. 193 classification is (1995). 118, 131-32, 2d 532 N.W.2d Wis. opinion's majority
¶ The extensive discus- 217. scrutiny appropriate stands in stark of the level sion Sambs, In like our earlier cases. cases contradiction to rational test in a court was able to state the basis pages pages paragraphs. Here, of obfuscation few disguise majority's required adoption of a new are to scrutiny before in Wisconsin. This level of requires never used "a rational
the concurrence to refer to basis "the rational basis test." Justice test" rather than today, ¶ until concurrence, Wisconsin, 189. In Crooks' only there are was one "rational basis test." Now there two.
¶ scholar Laurence Tribe 218. Constitutional law "covertly height- as describes rational basis with bite height- [of scrutiny," and warns that "covert use ened dangers scrutiny] presents of its own." Laurence ened § Law 16.3 at Tribe, H. American Constitutional 1988). (2d practice promotes arbitrari- ed. Such a essentially "remain unac- and allows courts to ness countable." Id. "unaccountability"
¶ Professor Tribe simple perceive. cases, to In future warns of is rely majority on "rational basis with will be able legislation not invalidate that does suit teeth" to majority's fancy. cautions that "with Professor Tribe further guiding principle the use of this more
no articulated regulations searching inquiry, routine economic even may to a form of review from time to time succumb Today, majority
reminiscent of the Lochner era." inaugurates the "Ferdon era." majority majority op., admits, 221. As the argues approach n.95, "A Tribe better would far subject heightened only review those classifications *93 quasi-suspect explicit judicial determined to be after regarding debate over the reasons for so them ...." 2 § Tribe, Law, Laurence American Constitutional 16.3 at (2d 1988) added). (emphasis ed. applicable ¶ 222. The choice of the of level scru- tiny extremely important. examining is One treatise damage caps courts' of treatment noneconomic *94 against plaintiffs obtain awards above nates who cap complain plaintiff cap. that the Second, could against young patients patients and with discriminates plaintiff family multiple Third, could members. plaintiffs: cap of those creates two classes claim that providers injured by state-employed and health care 893.82(6) plaintiffs See, (caps damages § for e.g., Stat. Wis. $250,000). Wis. Stat. suing at See also employees state 893.80(3) by committed damages § for certain offenses (caps $50,000; at capacity official when government officials their damages cannot exceed company, a fire volunteer offense 895.04(4) wrongful (caps damages § $25,000); Wis. Stat. at death of an adult wrongful at death of a minor 973.20(4m) (limits, $350,000); in some circum § Wis. Stat. by a defendant stances, paid to be the amount of restitution $10,000). certain sexual crimes convicted of 893.82(6). § Wis. Stat. injured by private providers. light
those care In health opinion, appropriate this an if case were come majority difficulty us, before would have distin- guishing cap malpractice by government-employed a on providers cap malpractice by
health care from on private providers. health care assessing
¶ 226.
It
be
must
remembered in
majority's
any impact
disavowal of
of its decision be-
yond
majority
quotes
case
this
uses
some
reasoning
appli-
of the
that invalidated the retroactive
damages cap.
cation
$1,000,000
of a
noneconomic
Mar-
Richards,
tin v.
156, 210,
192 Wis. 2d
I—IHHHH Finally, strongly disagree ¶ I with the majority's legislature conclusion that the did not have a rational basis to enact the on in medical actions contained in Wis. Stat. 893.55(4)(d). §
7 Hall, Maurin v. 100, 197, 28, 2004 WI 274 Wis. ¶ 2d 682 (Abrahamson, C.J., J., N.W.2d 866 Crooks, concurring).
690 legislature's the motiva- ¶ 228. To understand history burgeon- of the tions, one must understand quarter malpractice problem ing final over the medical century. of twentieth legislature it believed faced
¶ 1975, 229. of As 1975; see 37, Laws also care crisis. Ch. health ¶¶ WI 100, 49-50, 28, Wis. 2d Hall, v. Maurin Strykowski Wilkie, rel. v. 866; State ex 682 N.W.2d (1978). Accordingly,it 509, 261 491, 2d N.W.2d Wis. chapter 37, Ch. Laws of 655 of the statutes. created findings part endeavor, that it made eleven As 1975. § regarding nature of the crisis. ch. Laws majority op., Having ¶ forth the 86 n.101. set 1975; findings, majority upon legislative itself to takes it judicial legislative findings into five "summarize" op., findings. Majority ¶ 86. From these summarized objectives. majority legislative findings, the "deduces" "objec- majority alleges the first 230. The "[e]nsur[ing] adequate compensation for victims tive" injury meritorious claims." with op., Majority ¶ 91. according objective, to the ma- The second
jority, size of medical is to reduce the premi- reducing malpractice thereby insurance awards, Majority op., ¶ 92. ums. according objective, ma- to the
¶ 232. The third jority, keep aat annual Fund assessments is to protect financial status. the Fund's rate and reasonable Majority op., ¶ 93. according objective, ma- to the The fourth Majority
jority, care costs. health is to reduce overall op., ¶ 94. major- according objective, to the
¶ 234. The fifth practice providers encourage ity, health care is to *96 reducing practice Wisconsin, the of medicine, defensive retaining malpractice insurers in Ma- Wisconsin. jority op., ¶ 95. majority approach
¶ 235. The takes novel to damage nullifying cap. concentrating the Instead of its damage cap, fire on of Wisconsin's enactment majority any cap attacks the of effectiveness on noneco- damages anywhere, nomic cap and concludes that no such any any legislative has had effect at all on of the five objectives it deduced. holding staggering. breadth of this is contrary majority's that,
It means to the narrow state- very issue, ment of the will it be difficult for Wisconsin legislators re-enact on noneconomic majority attempted the future. The ruling has to insulate its legislative by making from reaction and redress ruling its so broad. Accordingly, following
¶ 237. in the sections of compelled only I dissent, this am to cite not local studies that show effectiveness of the contained Wis. § 893.55(4)(d), Stat. but also national studies establish- ing malpractice caps. of effectiveness majority
¶ 238. The concludes that there is no relationship any objectives rational of five that it says might justify cap. wrong every It count. Damage Cap Helps Adequate Compen- A. The Ensure sation at Reasonable Cost majority's "legislative objective," 239. The first ensuring adequate compensation plaintiffs, is not explicitly statutory findings. listed in the Nevertheless, represents it a reasonable summation the whole purpose Chapter exposes absurdity 655 and holding this court's that medical residents are not Physicians by Chapter Phelps v. Ins. See covered Co., 2d 698 N.W.2d643. Wis. WI Roggensack carefully explains
¶ 240. As Justice patients compensation sys- dissent, in her Wisconsin's coverage guarantees dam- unlimited economic tem requires ages obtained in a settlement or at trial. It *97 liability coverage purchase to and doctors insurance providers pay requires care to annual assess- health helps predict- Thus, into ensure ments the Fund. malpractice compensation and for medical able certain patients. By plaintiffs
¶ in kinds of contrast, other tort wrongful in which there is a cases, even death suits may statutory prove cap, be able to more sometimes damages they but a million dollars in noneconomic than rarely defendants. to that amount from are able recover coverage why motorist is so That underinsured important motor accidents. in vehicle majority $410,000 242. The belittles Ferdon's supplement in to his noneconomic award expenses. for medical This $403,000 award future purchase money paid. many How motorists will be they injure liability coverage $500,000 in in the event motorist, or in underinsured motorist another they injured by coverage in which are for situations equivalent If Ferdon were to suffer an another driver? injury com- accident, in a would workers' work-related pay- pensation payments total even come close in ment this case? stabilizing of the 243. To effect understand damage cap, must understand the one malpractice liability of unreformed medical
nature [unreformed] system. medical whole, as a "Taken system simply, liability appears quite be, ineffective negligence. Appropriate consistently penalizing acts at care can easily medical result in large damage while true awards, negligence acts go unpunished."8 studies, to some According close to of claims 70% result in no payment, while a small amount of claims result huge of frustration with the payments.9 sys- Because tem, about only 1.5 percent patients actually injured malpractice file a even claim.10 244. The Wisconsin Commissioner Insurance extolled the recently predictability stability to the medical statutory brings legal Congress, Committee, Liability for 8 U.S. Joint Economic 2003) Malpractice: Medical Issues Evidence at (May (hereinafter Congress, Committee, U.S. Joint Economic Li ability Medical Malpractice). majority disparages report Joint Economic "policy paper," Committee as a despite report the fact that cites abundant independent statistical support evidence of its line caps bottom conclusion: work. 9 According study, to one sample recent in a of 5524 cases, jury "0.9% resulted verdicts for the *98 plaintiff, trial, 27.4% were settled before dropped 67.7% were dismissed, or 4% ended the verdict defendant." An Acceptable Gunnar, Is There Answer William E Rising To Premiums?, Malpractice Medical 13 Annals Health L. (2004). 10United Department Services, States of Health Human & Addressing the New Care Reforming Health Crisis: the Medi Litigation System cal Improve to the Quality Health Care of (Mar. 2003) Localio, (citing Lawthers, al., A.R. A.G. et Relation between malpractice claims and adverse events due to negligence: III, Results the Harvard Study Medical Practice of 1991)) (hereinafter Eng. (July 25, 325 New J. Med. 245 United Services, Department States of & Addressing Health Human Crisis). the New Health Care majority disparages The the report paper," DHHS as a "policy despite fact the the report independent cites abundant statistical evidence support of its bottom line caps conclusion: work. percent- Caps may an contribute to increased
arena.11 plaintiffs age settlements, are aware that of because damages are not available. unlimited noneconomic majority all attention on The focuses its malpractice patients not few medical who do benefit the statutory minority small of from the scheme. This cases statutory not make scheme irrational. does the Malpractice Damage Cap B. The Reduces Size of Thereby Reducing Malpractice Awards, the Size of Insurance Premiums "objective" majority's
¶ 246. can be The second objectives: reducing component down into two broken reducing the size of the size of awards premiums. malpractice insurance Cap Malpractice of Awards Reduces Size simple, ¶ 247. seem to be a mathematical It would certainty cap on reduces that the However, the size some claims. way disagree
majority even this unre- finds a with proposition, relying principal two sources: markable reports quoted in Martin and older studies Commissioner Insurance. One of amici Wisconsin plaintiff supporting asked court consider Rat- data such as the Internet "Weiss other national provides ings." substantial the three sources None of majority's position. support for the Insurance, Re Wisconsin Office the Commissioner *99 2005) (May 1995 Act 10 3-4 port Impact on the Wisconsin of added) (hereinafter Impact Report (emphasis 10). Act Wisconsin
a. Martin v. Richards
study by
Martin,
In
this court cited a 1986
Department
purporting
the U.S.
of Justice
to show that
damages
"fewindividuals receive noneconomic
in excess
$1,000,000."Martin,
mate has in recent decades. agency reported In 2003, a federal "[t]he payments number of million $1 or more reported [National Bank] to the Practitioner Data exploded past years, only in the not in AMA crisis Jersey, Pennsylvania, states such as New and Ohio, but percent nationwide."12 In more than five of all claims resulting payment, payout exceeds million.13 $1 reported payout The maximum $20,700,000.14 was twenty highest Seven of the verdicts in 2001 and 2002 were in medical cases.15 In a recent Wis- jury consin damages case, awarded million.16 $17.4 12United Department States of Health Services, & Human
Addressing the New Health Care Crisis at 12.
13 Id.
14 Id.
15 Gunnar, supra n.9, at 477. Judge Award, Malpractice Reduces Nunnally, Derrick (Dec. 2004). Milwaukee Journal Sentinel judge The trial reduced "pain these noneconomic suffering" about interest, million plus $12 dollars an roughly amount twenty-five cap. times the current *100 huge part ¶ are A of the awards 251. substantial damages. comprised Recent studies of non-economic damages comprise concluded that non-economic have average judgment percent Texas, In 77 of awards.17 million; now in medical percent cases is $2.1 average, figure, noneconomic that on the damages.18 jury-
¶ case, a term in the Maurin 252. Last Shay Leigh in $550,000 Maurin Estate of awarded the suffering pain her before diagnosis negligence in occurred The doctor's her death. Shay 8,1996, on March less than 6,1996. March died ¶¶ Maurin, 9, 11. 274 Wis. 2d 48 hours later. During part of time she was uncon- this substantial tragic are and heart- The facts of the case scious. jury wrenching. the fact that a awarded But suffering damages day pain for each she lived arguments by many made the ma- of the undermines jority. Report by of Insurance Commissioner
b. majority reports relies on Second, 253. Specifically, Commissioner of Insurance. Wisconsin's argues majority the "bottom line conclusion" only report is that "the dis- the Commissioner's [a] ... reduction effect on these areas has been cernable actuarially .. . levels over in the determined assessment years."19 the last seven reality, line" of the In the "bottom support report does not most recent
Commissioner's Services, & Human Department of Health United States Crisis at 13. Addressing the New Health Care 18Id.
19Majority op., majority's Contrary majority's to the as- position.
sertion, does not "draw report Commissioner's to the Commissioner's is- reports similar conclusions In the 2005 Commissioner prior years. report, sued" Gomez stated: Jorge important any analysis
[I]t is to note that of the effects *101 very of the enactment of Wisconsin act 10 is difficult including: due to several factors Many payments of the made on are a claims result trial. The settlement jury a a of settlement and not exist; caps amount takes into consideration the therefore there is no discernable amount that can caps. be attributed to a reduction due to the possible It is not to determine the number of the due to limited amount claims that filed were not damages in caps. economic addition to the malpractice To conclude .. . Wisconsin's market- place is stable. Insurance is available and afford- able, patients by are harmed malpractice who fully compensated occurrences are for unlimited 1995, along economic losses. Tort with reform of regulated primary managed well carriers and a well Fund has fully Compensation funded Patients malpractice resulted in the stable medical environ- ment, availability and the health care in Wiscon- sin.20 255. The report Commissioner's new makes of 1995 Act 10. The line plain impact "bottom conclusions" drawn the Commissioner are as follows: amounts; 1995 Act 10 affects settlement it discourages filed; some claims from and it being [a] has "resulted environment, stable medical and the avail- 20 Report Impact on the 1995 Wisconsin Act 10 at 3-4 added). (emphasis Accordingly, ability care in of health Wisconsin."21 Insurance, who is an excellent Commissioner disagrees position the effect of 1995 Act to evaluate majority's conclusions. with
c. Data National majority study, Third, 256. a national cites Ratings," presented by the "Weiss the Wisconsin Acad- (WATL).22 emy Lawyers report, according of Trial This any lack of WATL, showed the connection between damage caps, plaintiffs' awards, noneconomic and mal- practice premiums. However, case is not about "this caps, caps whether all or even all on noneconomic damages, constitutionally permissible. ques- are The ... one: Is the ... on tion narrow in medical cases set 893.55(4)(d) §§ forth in Stat. 655.017 and consti- Wis. Majority op., ¶ tutional?" report two broad conclu- Weiss draws *102 damage noneconomic
sions. The first conclusion is that caps holding damage example, awards; are not for down median in increased over 180% the award Wisconsin and from about to about between 1991 cap $256,000.23 However, it should be obvious that until the not effect a reduction the median award will greater cap than the amount. median award becomes currently cap adjusted inflation, is amount, the for As 21 Id.; contra majority op., 120. ¶ 22Majority op., 123 n.141. Malpractice Caps: et Medical The al., Martin D. Weiss Damage Caps Physician Premi Impact Non-Economic ums, Levels, Availability Coverage and Payout Claims 2003) (available (Weiss online at Ratings, Inc. June .com). weissratings http ://www.
$445,755, it be for the to reduce impossible cap would $256,000.24 A the median of about has the award are above the cap effect of the awards that reducing only payout the amount of the median Accordingly, amount. irrelevant. is simply from majority study the cites Similarly, Accounting Office. As it did with the report
the General Insurance, ma- Commissioner of by the Wisconsin forced to twist the GAO's blunt conclusion jority is claims tended to be lower and less grew The damage caps.25 states with rapidly any reveals its majority's wordplay again disregard very The median award is different from the mean refers to "the middle parlance, award. In statistical median distribution, equal in a above and below which lie an value Heritage Dictionary English Language number of values." (3d 1992). contrast, what, By everyday mean ed. is "average a set of numbers." language, one would call the value of Id. at 1116. point. simple example
A illustrates the Consider five non- awards, $50,000, damage following in the amounts: economic $350,000, $100,000, $200,000, million. fur- Consider $20 states, damages uncapped one in which are ther two $350,000. capped another in which noneconomic are at states, In of this set of data is the middle both median number, $200,000. However, very the mean of the data would be state, uncapped different in the two states. In the the mean of state, In capped the data is million. the mean of the $4.14 $210,000. majority very that "a small number *103 25 Majority op., legislature's supporting
evidence action, in direct hortatory contradiction to statements elsewhere opinion. summary, "[c]aps In . awards. . have significant magnitude effects,
had in the direction and theory, prior is consistent with evidence, and common sense." Patricia M. Danzón, The Tort Effects of Frequency Severity on the Medical Reforms of (1987) Malpractice Claims, 48 Ohio St. L.J. added). (emphasis agree I with the Wisconsin Commis- Department sioner of Insurance and with the U.S. of Health and Human Services that the noneconomic damage cap helps malpractice damage control medical legal awards and creates a stable cordingly, disagree environment.26 Ac- majority I with the that there is no rational connection between 1995 Act 10's enactment damage and the size of awards. Cap Helps Malpractice 2. The Reduce the Size of Insurance Premiums majority questions
¶ 260. The also whether the damage cap actually has reduced insurance premiums. Majority op., trumpets ¶¶ 121-29. It report by multiple the GAO that factors have contrib- premiums. uted to increased insurance But report even the GAO malpractice concluded that "losses on medical largest up part claims—which make Frequency Severity See also Patricia M. Danzón, Evidence, Malpractice Medical Claims: New 49 Law & (1986) Contemp. (concluding average Probs. that "[t]he impact part plaintiffs of the various statutes to all or recovery severity twenty-three average has been to reduce percent."). *104 primary appear driver of rate to be the
insurers' costs— Congressional Budget long The in the run."27 increases damage caps awards, federal concluded that Office reforms, would reduce with other tort in combination malpractice by percent premiums 25 to 30 insurance ten-year period between 2004 and 2013.28 over attempts disparage majority also 261. report's insurance conclusion that Wisconsin the Weiss during dropped premiums In that 1991-2002.29 5% pre- eleven-year period, median same percent in other 35 and 50 miums rose between states.30 reveals statistical evidence 262. Undeniable premiums malpractice insurance
that increases in in states without far in Wisconsin than are caps. lower during two-year period example, between For federal that 2003, 2001 and average studies showed highest premium31 in increased 5% Wis- 27 Mal Medical Office, Accounting United States General In Multiple Have Contributed to Factors practice Insurance: (GAO-03-702) (June Rates creased Premium "Highlights" at 2003); see also id. at 43. 28 Esti Cost Budget Office, Congress, Congressional U.S. - Accessible, Low-Cost, Timely Efficient, Help
mate: H.R. 5 (HEALTH) (Mar. 2003). Act 2003 at 10, Healthcare 4 29 Malpractice Caps: The Medical al., D. et Martin Weiss Premiums, Physician Damage Caps on Impact ofNon-Economic Levels, (Weiss Availability Coverage Payout Claims (available 2003) at http://www.weiss Ratings, Inc. June ratings.com). Id. at 16-17. "average highest premium" refers to the Typically, medicine, among general internal
highest premium increase specialists. United States De surgery obstetrics/gynecology or Services, Addressing the New Health & Human partment Health Care Crisis at period, Over the time
consin.32 same the cost for the type coverage same of insurance increased 45% caps.33 study without One took care states to note that holding premiums this success down "not acciden- tal."34 malprac- As states, reported percent;
tice insurers ratio loss above 100 premium is, received, for each dollar more than *105 expected paid one dollar is to be out.35 of 2001, As malpractice nationally paid insurers out $1.53 expenses premiums in claims and for each in col- $1 reported hand, lected.36 On the other Wisconsin percent, reporting jurisdic- ratio, all lowest 61.71 tions.37 empirical study
¶ Yet 264. another recent showed malpractice "[pjremiums that in states with percent in awards were 17.1 lower than states without caps."38 such majority simply
¶ 265. The to disbelieve chooses claiming premi- evidence, this that "differences both payments multiple and claims are affected ums damage caps, including factors in addition to state regulation, among premium competition rate level of 32 Id.
33Id.
34 Id. at 24. Finance, Injured Patients and Fami Joint Committee on 2005). Fund, Compensation lies #450, Paper (May at 7 n.9, Gunnar, supra at 482. Finance, Injured Patients and Fami Joint Committee on 2005). Fund, Compensation #450, (May 17, lies Paper at 7 Malpractice 'Crisis': The Medical Thorpe, Kenneth E. Reforms, Impact Recent Trends and the State Tort Health (Jan. 2004) (at http://content. Affairs at W4-26 healthaffairs.org/cgi/reprint/hlthaff.w4.20vl). returns rates and income
insurers, and interest Majority op., investment returns." affect insurers' 125. ¶ whether the crisis is The majority questions 266.
¶ this: St. real. See majority op., ¶ 160 n. 213. Consider one medical malprac- the number Paul, many years it nation, announced 2001 that insurer in the tice medical malprac- abandon completely providing would In an longer it was no profitable. tice insurance because majority majority opinion, unrelated section of 3.3% of only notes that St. Paul provided 222. 167 n. Pennsylvania. Majority op., insurance Paul "was the Nationally, though, largest malpractice St. all doctors."39 States, covering in the 9% of carrier United However, majority even the studies factors that while there are several recognize cites premiums, the cost of insurance driving up awards are one those factors.40 conclusively For the GAO example, report 2001-02, states with during caps experi- showed that 10%, rate increase of as average enced an premium *106 without caps with a 29% increase for states compared the period.41 over same admits, the majority 269. As the Wisconsin
¶ in accord: "rate stability Commissioner of Insurance is 39 Services, Department of Health & Human U.S. Confront Quality Improving Health Care ing the New Health Care Crisis: Lowering By Fixing Liability System Medical and Costs Our at (Jul. 2002). 14 40 America, Issue See Health Insurance Association of Brief: 2002). Rise at 13
Why Do Health Insurance Premiums (Sept. Office, Accounting Pub. No. GAO- United States General Rising Premiums Malpractice: Implications Medical 03-836, 2003) (available at on Access to Health Care 31-32 (Aug. www.gao.gov/new.items/d03836.pdf). dramatically impacted for both the Fund and
could be caps primary the be removed insur- carriers should damages."42 face unlimited non-economic ers rejection straight- majority's ¶ of such The provides proof evidence further forward statements and complete of review. of the standard of its abandonment searching opinion, parts for of its instead of As in other legislature's constructing support a rationale to or weigh majority upon itself to com- action, the takes it peting if and decides the matter as it were evidence deciding a on de novo review. case appro- court used to summarize 271. This response priate 'Judicial standard of review as follows:" only legislative requires challenged classification to a reviewing basis court locate some reasonable Sambs, 97 2d at 371 made.'" Wis. classification omitted). added) (citation (emphasis Now, instead of caps, support attempting a rationale to to locate majority to discredit them. searches for studies legislature find a rational basis to had reducing damage assists that the premiums. malpractice insurance Cap Financial Status and Protects the Fund's C. The Keeps to a Rea- Annual Provider Assessments Level sonable objective majority's legislative third 273. The objectives: component separated into two also be
should keeping preserving financial status the Fund's provider level. On to reasonable annual assessments Impact (citing Report on the Majority op., ¶ *107 10). Act Wisconsin
both had a rational grounds, legislature basis conclude that the noneconomic damage serves the cap intended purposes.
1. The Cap Protects Fund's Financial Status In December the nonpartisan Wiscon-
¶ Legislative sin Audit Bureau an compiled accounting estimate the Fund revealing was dire economic straits.43 The Fund had an deficit of accounting $67.9 notes, million.44 As the this deficit dated from majority the Fund's "first 10 years operation." Majority op., 150 n.195. "For number of the Board years, ha[d] been to . . . retire studying ways its financial deficit."45 275. The Office of the Commissioner of Insur- ance a fiscal estimate in prepared connection with 1995 Bill Assembly concluded as follows: In evaluating impact 35,46 the fiscal AB of 1995 OCI concentrated on its effect on the Fund. ... place 30, 1994,
... If a had been in as of June break-even Fund levels could have been reduced approximately five-year 19.0% or million. $10.5 Over period the total savings resulting cumulative from a Legislative Bureau, Wisconsin Audit Summary: Audit (Dec. Fund, 94-29, Compensation Patients Document at 1 1994). 44Id.; majority op., see also 150 n.195. 45Testimony Farrow, of Peter Executive Assistant to the Insurance, Commissioner Assembly before the Committee on (Jan. Insurance, Securities, Corporate Policy, 19,1995). at 1 46The reference to typographical "1995A.B. 35"is an obvious logically error intended to reference 1995 A.B. 36. 1995 A.B. judges cases, concerned substitution of in criminal and was never passed. *108 30, 1994, to be projected enacted June
of million.47 $67.8 majority notes, Later, the bill was as $350,000. A reflect an increased
revised to never done. Cumulative fiscal estimate was revised provider may simply savings reduce used have been though, merely retrospect, In is it a fasci- assessments. nating that the Fund had a deficit of $67.9 coincidence estimated the Commissioner of Insurance million, and five-year savings the Fund at million? $67.8 interesting to examine the Fund's It is twenty years, keeping through past in mind deficit three to five reform often take that the effects of tort lag years apparent,48 probably because of to become filing of based and the claims time between enactment after enactment. With that that occurred on events commentary: following data and mind, consider the (Deficit)49 Surplus Year (8,000,000)* 1980-1981 47 for 1995 A.B. 36. Fiscal estimate 48 McClellan, Do Doctors Practice and Mark Daniel Kessler (1996). Medicine?, Quarterly Econ. 386 J. of Defensive * graphical from with are estimated Figures marked Bureau, An Audit Legislative Audit data. See Wisconsin 1994) (Dec. Fund, Document 94-29 7-8 Compensation Patients 1). are FY 1989-90 1991-92 Deficits between (Figure Bureau, An Audit Audit Legislative taken from Wisconsin 1993). Fund, 93-18 (July Document Compensation Patients are taken from and 1993-94 FY 1992-93 Deficits between Patients An Audit Bureau, Audit Legislative Wisconsin 1994). (Dec. Fund, 94-29 Deficit Compensation Document are taken and 2001-02 between 1994-95 surplus amounts Compen Patients Paper #458: Bureau, Legislative Fiscal from (9,000,000)* 1981-1982 1982-1983 (20,000,000)* (50,000,000)* 1983-1984 (80,000,000)* 1984-1985 Prior to no cap on noneconomic damages existed. 1985 Act 340 capped at *109 $1,000,000.
1985-86 (100,000,000)* 1986-87 (112,000,000)* (122,700,000) 1987-88 Three after Act years law, 340 became the Fund's deficit began to decrease. (108,300,000)*
1988-89 (73,597,992) 1989-90 (71,679,588) 1990-91 In 1991 the damage enacted 1985 Act 340 caps were "sunset," meaning that no existed. (78,982,681)
1991-92 (71,613,641) 1992-93 (67,903,761) 1993-94 (57,722,800) 1994-95 In 1994 the legislature studied whether to caps. reenact 10, 1995 Act reenacting became law in caps, May 2003). (Apr. sation Fund 7 The 2003-04 value drawn Legislative Bureau, from Injured Wisconsin Audit An Audit: 2004). (Oct. Compensation Patients and Families Fund 37 (41,795,500) 1995-96 (44,094,200) 1996-97 (22,166,700) 1997-98 Act the Fund's Three after the years passage began and it to show dramatically improved, fortunes accounting an first time. surplus 8,579,800 1998-99 27,229,700 1999-00 28,460,500 2000-01 6,604,100 2001-02 7,935,026 2002-03 on its in ac- expertise relies majority then analysis50 a detailed fiscal counting conduct declares If cap. has both and without a
The Fund flourished with impact did not the Fund's fiscal the amount any stability appreciable flow manner when cash *110 $1,000,000 existed, cap a then caps existed or when no justify requires more the rational basis standard rationally $350,000 cap related to the Fund's fiscal as condition. 158.
Majority op., ¶ inexact admittedly while an analysis, 279. This ¶ an caps impact do have science, shows this Recent estimates confirm stability. fiscal Fund's analysis. Fiscal 17, 2005, Legislative On May 280. #450, relating to the Patients released Paper
Bureau 50 Majority op., 130-58. ¶¶
Compensation paper Fund. The notes that this court upheld damages wrongful on noneconomic in accepted death cases, and had in review the case at bar. study according that, *111 expenditures. yearly It is current
dwarfs the Fund's impossible to that this would not have conceive effect on the Fund. deleterious majority ignores
¶ The this The 283. evidence. legislature had a rational to believe that the basis stability financial of the increase the fund. would Keep Cap Fund 2. The to Provider Assess- Allows to a ments Reasonable Level damage cap ¶ The allowed the Fund 284. has also year provider keep low. Between fiscal assessments year 2001-02, the Fund increased 1995-96 fiscal only year, In there no once.55 another was assessments remaining years, change In five assessments. decreased.56 assessments majority plainly of the states that one objectives
legislative keep provider towas assessments examining despite data, its to a minimum. After majority powerless to that conclude best efforts Accordingly, objective the data not been met. as this has majority sought, support do the answer the not any simply inquiry: majority event, "In as we recasts the explain is not below, a reduction in the assessments objectives necessarily germane legislative . . . ." to the majority Majority op., this How can the make keeping stating opinion earlier claim after legislative objec- low one of the was assessments itself tives? accounting perspective, it should 286. From an is tied in some that the of the assessments
be clear level way Fund's health of the Fund. As the the financial
55 at 15. Id.
56Id.
stability go and assets increase, the assessments will already majority's noted, down. As removal of the cap will decrease the economic health Fund, of the likely provider increase the assessments. Cap
D. The Reduces the Overall Cost Health Care majority opinion allege 287. The does not that damage caps do not reduce the cost of majority Rather, health care. concentrates on the malpractice premiums fact that "medical insurance are exceedingly portion an small of overall health care Majority op., majority equates costs." 162. The small percentages with small costs.
¶ 288. A multitude of studies and statistics belie majority's May study by First, conclusion. the Joint Economic Committee of the United States Congress concluded that medical reform produce could savings billion to $12.1 billion in $19.5 annual government, by decreasing
for the federal and, costs, increase the number of Americans with health coverage by many insurance people.57 as as 3.9 million study savings Another estimated that the from national per year.58 reform would be billion $70 $126 dollars Congressional Budget 289. The Office has esti- including imposi- mated that reforms, caps damages, tion of on noneconomic would result in a percent price 0.4 decrease in the of health insurance.59 57United Congress Li States Joint Committee, Economic ability Malpractice Medical at 1. 58 United Department States of Health & Services, Human Addressing the New Health Care Crisis at 11. Liability for Congress, U.S. Joint Committee, Economic Malpractice Medical at 22. Nationwide, mean an this would that additional health insurance.60 385,000 Americans could obtain may figures represent ¶ 290. these a small While percentage of health costs or the total number total care they inconsequential. no are not There is Americans, findings are to believe these not also reason legis- applicable, scale, in on a smaller Wisconsin. imposition had a to believe that the lature rational basis damage caps health care costs would reduce overall *113 availability of health insurance. and increase the Cap Encourages Stay in The Providers to Wiscon- E. the Practice Defensive Medicine sin Reduces majority ¶ the 291. The concludes that existence stay encourage providers to not of the does practice it the of defensive Wisconsin, nor does reduce disagree I on both counts. medicine. Cap Encourages Health Providers to The Care
1. Remain in Wisconsin term, this court has transformed 292. In one Lager malpractice in this In climate state.
the Myrtle Hospital, 2005 WI 124, _ Wis. strom v. Werth the the court eviscerated 2d N.W.2d _, modifying the source rule medical collateral statute Phelps, In court held that the actions. providers are health care covered medical residents not today, majority Chapter by its And the delivers statutory cap on abolition the masterstroke —the damages. noneconomic potential any majority con- dismisses 293. The study's citing
sequences, conclusion a GAO tentative appear or enter states do not to leave that, "doctors 60Id. caps
practice based on on noneconomic ... Majority op., study ¶ 168. GAO However, the included only majority limited data from five The states.61 claims by reports supported that these "are conclusions other Majority op., simply and studies." This is incor- rect. majority
¶ 294. The three other The cites "studies." support- first ais student-written comment.62Far from ing majority's premise, mistaken this article relates physician migration anecdotal evidence of from states damage cap.63 majority a without recognition latches to the article's that the AMAhas "problem" majority op., not state, declared Wisconsin a majority point. ¶ 169 n.227, but misses Wiscon- sin not a medical crisis because legislature through By has addressed it tort reform. undoing legislature, majority the work of the will drag disingenuous Wisconsin into back the crisis. It is experiencing physician claim that Wisconsin is not migration problem get and use that as reason to rid of cap, when the is one reason that has Wisconsin migration problem no at this time. majority
¶ 295. Another article cited cites *114 study already discussed, the GAO as well as several newspaper independent articles, but adds no research to question.64
61 Office, U.S. Accounting General Medical Malpractice: Implications Rising Care, Premiums on Access to Health of 2003) (available (August at http://www.gao.gov). GAO03-83617 62 Rallo, Comment, Lauren Malprac Elizabeth The Medical tice Crisis—Who Deliver the Today, Will Babies the Leaders of of Tomorrow?, (2004). Contemp. Pol'y 20 J. Heath L. & 509 63Id. at 510-11.
64 Boehm, Debunking Geoff Malpractice Myths: Medical Unraveling Reform", the False Premises "Tort Behind 5 Yale J. Pol'y, Health L. & & Ethics 360-61 n.17.
714 majority ¶ is a 296. The third article cites paper presented policy Bar to the Illinois State Associa- Assembly.65 General The and later the Illinois tion legislators obviously by were not convinced Illinois study they on in the enacted a assertions — in medical actions shortly thereafter.66 study Only comprehensively one has sur-
veyed Department question. In 2003, this the U.S. of study a that Health & Human Services commissioned from 49 over an extended time evaluated data period.67 states study that with a This concluded "States average physicians per 100,000 24 than more residents cap. caps Thus, States with have about without States physicians per capita percent than States more cap."68 without pronounced effect even more 298. This study supply of The same evaluated
Wisconsin. years physicians 1970-2000, and over the Wisconsin population physician increased that found average span.69 Meanwhile, the over time 104.5% by only caps supply increased states without 25%.70 difference over 79.1%—a Medical Vidmar, (citing Majority op., n.229 Neil Report A System Tort in Illinois: Malpractice and the Association, 2005). Illinois State Bar (May 73-82 Malpractice et Medical Fusco, al., McKinney, Dave Chris Cleared, 2005). Caps (May 26, Chicago Sun-Times Servs., Dep't Health & Human United States Awards Limiting Malpractice Impact State Laws (Jul. 2003). Geographic Physicians Distribution 68Id.
69 Id.
70 Id. *115 Similarly, Wisconsin, the Commissioner reported phy-
of Insurance the increases in number of sicians in Wisconsin conclusion This forces the majority away explain yet to more evidence of the positive cap; according majority, the effects of the report is unreliable because the Commissioner did not expressly positive conclude that effect was the damage cap. again, result of the noneconomic Once majority get way doesn't let hard evidence itsof preordained conclusion. study, evaluating
¶ 300. Yet another after sub- spanning stantial data 1980-1998, statistical confirmed caps "enacting on non-economic an is way physicians."71 effective to attract and retain The study step establishing further, went one that- the physicians increased number translated to increased availability regions, statistically of health care in some reducing mortality among infant rates African- per American 100,000 babies deaths births.72 compels 301. A small dose of common sense prefer practice conclusion that doctors would medi- legal quoted cine in a favorable environment. The surveys Accordingly, legislature this confirm notion. Stratmann, & Does Medical Mal Jonathan Klick Thomas practice Help Physicians States Retain It and Does Reform (Oct. 2003) Matter? (unpublished 12-13 manuscript, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=453481). study "The caps concluded effect of on non-economic dam ages in general positive and those set at is on the per number of capita, statistically doctors result added). Id. at 9 significant." (emphasis damage The noneconomic cap in 893.55(4)(d), inflation, § Wis. Stat. adjusted for is cur rently $445,755.
72Id. at 13-14. *116 cap on conclude that the non- had a rational basis to encourage physicians to re- would economic main in—or move into—Wisconsin. Cap of Reduces the Practice Defensive
2. The Medicine likely
¶ doctors are less 302. The issue of whether practice medicine is related to defensive Majority majority migration. op., ¶ admits 172. The extent of this measurement of the that "an 'accurate virtually impossible,'" phenomenon then holds this is difficulty against legislature. Id., 173. majority studies, all con- cites three 303. The
cluding medicine difficult to measure that defensive is "[flindings must be about defensive medicine because Majority surveys providers ..." care . on of health based op., ¶ 174. surveys provide physician
¶ 304. It true that is practice ample of the existence evidence majority's assertion However, the defensive medicine. practice only surveys of the are evidence that such body contrary, large "[a] simply not correct. On the showing medical mal- that practice has accumulated research liability practice defensive causes doctors to ig- majority repudiates or course, the medicine."73 Of attesting surveys physician the fact that "more nores (76 report percent) four doctors than three out of they practice However, scientific medicine."74 defensive conclusion. arrive at same studies jointly study undertaken In University on Eco- Bureau and the National Stanford Committee, Liability Congress, U.S. Joint Economic studies). (collecting Malpractice at 13 Medical n.9, Gunnar, supra also at Id. See employed
*117 nomic Research mathematical models years study statistical research over 1984-1990 to particularly the effect of medical reform— damage caps practice of defensive —on medicine. Daniel McClellan, Kessler and Mark Do Doc- Quarterly Medicine?, tors Practice Ill J. Defensive (1996). analysis Econ. 353 The conclusion: "Our indi- cates that reforms that damage awards, [75] abolition of directly limit punitive damages, [76] liability caps — mandatory prejudgment abolition of interest, and collateral-source-rule reforms [77] —reduce hospital ex- penditures by percent years 5 to 9 within three to five adoption, requiring with the full effects of reforms years appear." study several Id. at The 386.78 further found that directly
if limiting malpractice liability reforms had applied throughout been the United [between States expenditures 1990] 1984 and on cardiac disease would year have been around per $450 million lower for each years of the first two after adoption and close to $600 75 893.55(4)(d) See § (today Wis. Stat. declared unconstitu by tional majority). 76 Kokemoor, See Wis. Stat. 893.55(5); Lund v. § 195 2dWis. (Ct. 1995). 727, 734, 21 App. 537 N.W.2d 893.55(7) (eviscerated See Wis. Stat. § by majority in Lagerstrom Myrtle v. Hospital, Werth 2d WI 124, _ Wis. 201). _, 700 N.W.2d study The majority GAO cited dispute did not conclusions, these but commented savings that "the he cannot generalized services, across all populations, and health condi tions." United Accounting Office, States General Pub. No. GAO-03-836, Malpractice: Implications Medical Rising Pre Care, GAO-03-836, on (2003). miums Access to Health at comment, conclusory Aside from that give any the GAO did not study's statistical findings reason that would not be more widely applicable. years through year for each of three per lower
million adoption, compared nonadoption with after five direct reforms.
Id. 387. at study concluded that tort
¶ Another recent damage including caps, imposition of would reform, billion and billion result "between $9.3 $16.7 savings budgetary de- in 2013 from reduced additional The Joint Economic Committee fensive medicine."79 of health insurance that the reduced cost estimates resulting medicine the reduction in defensive from allowing practices 1.6 an additional would contribute afford health million Americans to insur- million to 2.6 ance.80 studies are accord.81 307. Similar conclusions, based statistical 308. These majority's vague
analysis, assertions obliterate the either cannot be of defensive medicine that the effects Majority do affect health care costs. or not measured unquestionably legislature op., had a ra- its of the enactment tional basis to conclude keep damage physicians cap would both *118 practice the defensive and reduce Wisconsin medicine. Committee, Liability Congress, Joint Economic U.S. and Evidence at Malpractice:
Medical Issues Id. at Services, Human of Health & Department U.S. Confront Quality Health Care Improving Crisis: ing the New Health Care System Liability By Fixing Our Medical Lowering Costs 2002) ("If (Jul. placed on non- reasonable limits were medicine, it would damages reduce defensive economic to money Federal Govern taxpayers' the amount of reduce year."). per billion spends $25.3-44.3 ment DECISIONS BY OTHER COURTS evaluating cap ¶ 309. No other court on noneco- damages malpractice nomic in medical cases has con- (or cited) sidered at least has not the amount of statistical data and evidence this court has cited in this case. On more limited data, some courts have struck caps damages on down noneconomic in medical mal- practice upheld my cases. Others have them. In view, reasoning put the better been has forth in the cases upholding caps.
¶ 310. Given the review, standard of which it faithfully majority claims test, "rational basis" ignore should not be able to supporting the mountain of evidence caps. length the effectiveness of The of the majority opinion just majority illustrates how hard the study study, has to work to discredit fighting fact, after after fact way its to the desired result. Other courts' majority's ways. decisions show the error in the ¶ 311. California was one of the first states enact medical tort reform. In 1975 its legislature Injury Compensation enacted the Medical (MICRA) among Reform which, Act reforms, other limited noneconomic in medical Group, $250,000. cases to See Fein v. Permanente Med. (Cal. 1985). constitutionality 695 E2d 665 of vari- aspects challenged. ous of MICRA been Fein, has In plaintiff challenged damage cap the anon equal protection theory, placing equal that case footing with this one. Faced with the identical issue we responded: face, the California court statutory We have . .. found that the classifications are rationally "realistically legis- related conceivable purpose[s]" lative of MICRA. We have not invented purposes that could not have been within the fictitious contemplation Legislature ignored dispar- nor
720 in realistic terms ity in treatment which the statute interpreted never been cases] But imposes. [prior have simply a may properly we strike down statute mean that or disagree the law we with the wisdom because of that there is a method because we believe for fairer dealing problem. with the do not Our recent decisions of challenged provisions for support reflect our policy, simply a matter but our conclusion MICRA as principles the under established constitutional authority adopt such measures. Legislature had not cannot eliminate measures which do "[A] court ... it to maintain to suit its tastes seeks happen if system. the correction democratic forum for responsive legislature." legislation ill-considered added) (internal cita- Fein, (emphasis 695 E2d at 684 omitted).82 tions same other courts have reached the Many Court, In Supreme
conclusion.83 2003 Nebraska summarized the damages, with a on total faced current state of the law:
82
appeal
an
Supreme Court dismissed
The United States
Group,
Med.
question. Fein v. Permanente
of a federal
want
(1985) (mem.).
to those discussed guess plaintiffs to "second invitation court resisted by deciding Legislature" that the of the the conclusions *121 unnecessary." cap damage or Id. was "unwise Nebraska "[Reducing Instead, health care it concluded that at 72. encouraging provision of medical services and the costs thought goals reasonably legitimate can be which are by lowering medical mal- the amount of furthered be judgments." practice Id.
SUMMATION legislature compre- approved ¶ In the 314. past malpractice reform. Over the hensive medical reviewing Upon very has successful. decade it been supposed validly legislative is acts, the court enacted legislature's recognize the function, not it is the that reports. The court court's, to evaluate studies guess legislature. the not second should obviously disagrees. majority ¶ 315. The closing paragraphs the Nevertheless, in its presume majority that "The court must states, support judgment legislature's and look for sound was legislative act."84 84Majority op., majority pledges
¶ 317. The also adherence its "to concept judicial against restraint that cautions substituting judicial opinions legisla- for the ofwill ture . . . ."85 changes wrought by majority opin- 318. The profound, concluding passages
ion will be but it is these that hurt the most.
¶ 319. I am authorized to state that Justices JON E WILCOX and PATIENCE DRAKE ROGGENSACK join this dissent.
¶ 320. PATIENCE DRAKE ROGGENSACK, J. (dissenting). majority opinion concludes legislature's establishment of the on noneconomic (2003-04)1 damages § under Wis. Stat. 655.017 893.55(4)(d)2 § facially Wis. Stat. unconstitutional on equal grounds. protection Majority op., ¶ 10. The two majority opinion compares persons classes the are those subjected to medical who were awarded damages excess and those who were awarded noneconomic less than the cap. employs It then test, new rational basis which it meaningful calls "rational basis teeth, with or rational *122 cap basis," to conclude that basis, the has no rational equal protection violation of of I, clause Article Majority op., Section 1 of the Wisconsin Constitution. ¶ 80. Because I conclude that Ferdon has not met his prove required by burden to Stat. Wis. § rationally legitimate 655.017 is not related to the
85Majority op., 185. ¶ 1 All further references to Wisconsin Statutes are to the version, 2001-02 unless otherwise noted. 2 on damages is indexed for inflation. 16, 2005, $445,755. As of June limit on those was $410,322, Ferdon received capped limit at that time.
724 (1) reducing objectives legislative the size medical of of malpractice judgments and settlements order to malpractice insurance; costs of tame the (2) become, or to a as, to continue to make choice provider in desirable so that health care Wisconsin readily quality continue be available health care will respectfully I Wisconsin; dissent.
I. DISCUSSION of A. Standard Review
¶ is a is constitutional Whether statute 321. question novo. This case of that we decide de law constitutionality challenge presents of a facial to the determine, inde such, as we are asked to statute and particular pendent case, whether the facts of this Dep’t County Dane an rule of law. statute states invalid ¶ P.P., 67, 32,WI 279 Wis.2d Human Servs. v. 2005 concurring). (Roggensack, J. 169, 694 N.W.2d344 Equal B. Protection equal pro challenged
¶ A statute that is grounds presumed Aicher to be constitutional. tection Comp. Fund, 98, 18, 237 Patients 2000 WI v. Wis. Cole, v. 2003 849; see also State 99, 2d 613 N.W.2d Wis. Lounge 328; 520, 665 N.W.2d 11, 264 Wis. 2d 112,WI Mgmt., 20, Trenton, 13, 2d 219 Wis. Ltd. v. Town (1998); Konrath, 290, 2d Wis. State v. N.W.2d 156 (1998). presumption is based This 302, N.W.2d601 government co-equal respect for a branch on our legislative promote acts. due deference to is meant "[E]very presumption must Cole, 520, 2d 264 Wis. indulged Benson, v. law."Jackson to sustain the be (1998). 2d 578 N.W.2d Wis.
725 any ¶ 323. We resolve doubt about the constitu tionality upholding of a in statute favor of its constitu tionality. Aicher, ¶99, 237 18; Wis. 2d see also Monroe Dep't County B., 48, Human v. Kelli 2004 Servs. WI ¶ 51, Cole, 16, 831; 271 Wis. 2d 678 N.W.2d 264 2dWis. choosing ¶ 520, Further, 11. between reasonable interpretations a statute, we "must select con constitutionality." [that] struction results Am. Fam ily DOR, v. 650, Mut. Ins. Co. 222 667, Wis. 2d 586 (1998) (quoting Strykowski 872 N.W.2d State ex rel. v. (1978)). Wilkie, 81 491, 526, Wis. 2d 261 N.W.2d434 party challenging ¶ 324. It is insufficient for the the statute to establish either that the statute's consti tutionality probably is doubtful or that the statute is Cole, ¶ Jackson, unconstitutional. 264 520, 11; Wis. 2d party challenging 218 2d at Instead, Wis. 853. a constitutionality statute's must demonstrate that the beyond statute unconstitutional a reasonable doubt. Cole, 264 520, Jackson, Wis. 2d 11; 218 Wis. 2d at language implies evidentiary 853. While this burden proof commonly most used factual determina phrase, in a case, tions criminal context, this "beyond doubt," reasonable establishes force or conviction with conclude, which a court must as a law, matter of statute is unconstitutional before the statute can be aside. set See Guzman v. St. Francis Hosp., App Inc., 4 n.3, WI Wis. 2d N.W.2d survives equal-protection challenge an if "a rational basis exists support the classification, unless the statute im- pinges right on a fundamental or creates a classification (citation suspect Id., ¶ based on a criterion." omit- ted). Guzman examined the same classification de- majority opinion equal protec- in the scribed under an *124 explained challenge. that this court tion Guzman statutory previously the had determined that scheme chapter not involve a fundamental set in 655 did out right suspect Id., ¶ Therefore, the 20. or a criterion. provides appropriate analysis for test rational basis damages. Id. explained legislature's Aicher, In we 326. statutory establishing specific in a scheme motivation malpractice actions. We that for medical stated addressing: malpractice medical statutes were aimed at suits, malpractice a increase the number of sudden awards, pre- of and in insurance the size miums, dangers: in- impending and identified several costs, elaborate prescription health care of creased unavailability procedures, "defensive" medical possibility that hazardous and the certain services practices. their physicians would curtail (quoting Strykowski, 81 Aicher, 2d 22 237 Wis. 508). Although Aicher the constitu Wis. 2d at involved repose regard analysis a tional statute brought by we children, actions legisla policy approved the of the examined and bases statutory comprehensive of which scheme ture for the part. explained that a minor a an action was We "[u]nder test, a statute is unconstitu the rational basis legislature applied arbi an irrational or tional if the provision." trary enacted the when it classification (citing State, 99, ¶ v. 64 Aicher, 2d 57 Omernik 237 Wis. (1974)). also 6, 18-19, We Wis. 2d 218 N.W.2d explained "[I]t that not our role to determine particular legisla underpinning rationale wisdom or pronouncement." Aicher, 2d tive Wis. Bailey,
(citing 245, 265, 578 v. 218 Wis. 2d Tomczak (1998)). recognized legislatively that We N.W.2d line-drawing are a matter chosen classifications might precise produce not be and that at times can inequities, goal simply some but that our was to deter statutory mine whether the legislative objective scheme advances a stated objective legislature
or an that the may passing Aicher, have had in this statute. 237 Wis. ¶99, 2d
¶ 327. We also described the test, rational basis years. Id., ¶ which has been used more than 30 part legislative said, As we classification that is aof pass scheme will the rational if basis test it five meets *125 criteria:
(1) All upon classifications must be based substan- tial distinctions really which make one class different from another.
(2) The adopted germane classification must be purpose the of the law.
(3) The classification must not be upon based existing only. [It circumstances must not be so consti- preclude tuted as to addition to the numbers included within class].
(4) To may apply, whatever class a law it apply must equally to each member thereof.
(5) That the characteristics of each class should be
so far different
from those of other classes as to
reasonably suggest at
propriety, having regard
least the
public good,
to the
substantially
legislation.
different
(quoting Tomczak,
Id.
¶ 328. rational basis test above, set out damages I conclude that the on noneconomic therefore, has rational basis it does not right equal protection violate Ferdon's of the law. cap, First, $445,755, now set at ais limit on damages that establishes a real difference between those victims of medical who have been awarded more than $445,755 in noneconomic damages and those victims who have been awarded less. chapter comprehensive Second, 655 is a legislative right scheme that creates a to the unlimited payment for economic loss and health care past §§ costs, and future. 655.23, Wis. Stat. 655.27. It right payment also creates a to a limited of noneco- damages. § statutory nomic Wis. Stat. 655.017. This years, legisla- scheme was created over several as perceived growing ture addressed what it aas legislature chap- crisis. When enacted specific findings 655, ter it made 11 about its reasons § doing findings 1, 37, so. ch. Laws of 1975. The legislature great weight are entitled to in our consideration of whether a statute has a rational basis. Strykowski, 81 2d at Wis. legislative findings
¶ 330. The full text of the 11 majority opinion quote set out aas of Maurin v. Hall, 100, 28, 2004 WI 2d Wis. 682 N.W.2d repeats legislative findings. wherein Maurin Majority op., the actual repeat ¶ Therefore, n.101. I will not *126 majority opinion However, them here. I do note that the findings "summarizes" them into five that do not ad- equately incorporate legislature all the the reasons gave. Majority op., majority opinion ¶ 86. The omits following findings the and their content:
(a) The number of and suits claims for
arising professional patient from care has in- tremendously past years creased in the several judgments and the size of the and settlements connection therewith has increased even more substantially;
(d) providing health care The increased costs
services, claims and the increased incidents of the against providers health care and size suits many judgments and has caused of such claims com- liability companies insurance to withdraw insuring provid- of health care pletely from ers;
(f) impact a result of the current of such suits As claims, providers care are often
and health employ to required, protection, for their own diagnostic procedures pa- their extensive tients, thereby increasing patient the cost of care;
(i) Inability obtain, high and the cost of obtain-
ing, likely has affected and is such insurance hospital further affect medical and services pa- to the detriment of available this state tients, public providers. and health care § important ch. Laws of 1975. It is to note that increasing legislature was concerned with the malpractice suits, number of medical with the increas- ing judgments of the from those size settlements (1) and with the results that followed: suits have (2) malpractice insurance; increased of medical cost diagnostic patient's increased use of tests that require, condition does not but are used an effort to patient if do head off a claim the did not (3) rising accompany well; costs of health care that (4) greater testing procedures; early use of retire- practicing physicians and the choice of a ment of may different career those who have entered the (5) field; health care patient, the overall detriment to the provider general health care and the public.
¶ 331. The that creates the classification at rationally legislature's goal issue here is related to the reducing malpractice the size of medical verdicts and premiums malpractice settlements, so that for medical moving goal, will be contained. In legislature toward this policy made a rational choice that some victims of medical would not receive all of damages they the noneconomic were awarded, for the public good. any cap That a choice that will have to make, no matter what However, amount.3 legislature did not vacuum; make this choice in a it was part comprehensive plan fully made as of a com- pensated practice all victims of medical for all damages they other sustained.4 payment, chapter In order to full achieve requires providers health care to maintain and provide proof of threshold medical insur- they permitted provide ance care, before are health 655.23(7), § providers Wis. Stat. and health care must Injured contribute to the Patients and Families Com- (the Fund), pensation Fund in amounts sufficient to payment damages, assure the unlimited of economic past and future medical care and the of $445,755 on 655.27(3). § damages. Wis. Stat. generous plan
¶ 333. This is a much more party injured payment through negligence ato legislature another than the has elsewhere established. majority opinion asserts that this case is not about caps." Majority op., only "all 13. While it is true that one statutory us, cap is before the classification chosen and the reasoning majority apply caps explain of the to all as we below. guaranteed recovery There is no limit on for economic losses, earnings earning capacity. such as loss of or loss of There guaranteed recovery expenses, is no limit on for health care past both and future. *128 only per legislature requires example, $25,000 the
For capacity payment per person/$50,000 for in occurrence negligent driving by injuries an automo- caused may provided §§ be This Stat. 344.24-.33. bile. Wis. through purchased driver or a self-insured either as person injured damages in to one See id. insurance. easily can exceed automobile accident a serious may statutory requirement, ex- and at times § However, 344.33 has 100 times. that limit ceed deny protection equal of the law held to never been pay many $2,500,000 unable to drivers are because seriously injured thereby leaving damages, the most only compensated persons dam- of their total 1% ages. jury damages by Being awarded very things.
being different collect them are two able to statutory right payment Chapter to 655 establishes complains unique that law. Ferdon Wisconsin that is good enough right payment chapter is not to get jury awarded him. His he did not all because plea ignores paid many people not all a are the fact inability jury to because of the tortfeasor's awards them Many injured persons pay. their claims for settle more going has the tortfeasor without whatever insurance inability they recognize the tortfeasor's trial because pay recovery. their actual limits Returning part to the third of the now (whether the classification would basis test rational preclude included within the additions to the numbers § class), the number 655.017 has no limit on Wis. Stat. cap subject persons Fourth, to its terms. who are malprac- § apply equally to all medical does of 655.017 And, fifth, the characteristics of those claimants. tice cap of more than the have received an award who legislative clearly by the amount, $445,755, now are set guaranty payment capped choice to of no more than the type damage amount for that in order to reduce malpractice judgments size of medical and settlements and to reduce the cost of insurance. majority cap 336. The asserts that the on non- damages equal protection
economic violates the clause damages because those who suffer noneconomic excess of the are not able to recover the full amount damages, of their suffering while victims of medical below will be fully compensated. Majority op., ¶¶ 97-105. This ratio- *129 caps nale is flawed because it would cause all damages suffering to be unconstitutional, as victims damages threshold, above the no matter where set, it is fully suffering damages will not recover while those below the threshold will.5 joins
¶ majority opin- 337. The concurrence goes say ion, concurrence, 189, but then on to some caps cap are constitutional and the in Wis. Stat. § might pass 655.15 constitutional too, muster but the legislature just amount the set is too low.Id. There is an inconsistency joining majority's in the concurrence opinion striking equal protection down the statute on grounds yet saying cap higher and a in some amount inconsistency would be constitutional. The arises be- majority opinion cause it is the conclusion of the that damages cap those who suffer in excess of the are equal protection cap. denied of the law due to the Majority op., ¶¶ 97-105.
5 Indeed, if this every were not the case and victim malpractice paid were the entire amount of noneconomic dam ages, cap entirely achieving would be ineffective at least purposes, limiting two of its of malpractice size verdicts and reigning escalating settlements and in the costs of insurance. that the bases its decision The concurrence § quantitatively insufficient Stat. 655.017 Wis. Consti- and 9 of the Wisconsin I, Sections 5
on Article repeat- The concurrence Concurrence, tution. as edly is insufficient amount that refers to the too low? $445,755. Is that is now $350,000, but enough? gets high it determine that? Is to Who What is you question question How do tell of law? of fact or high enough? Fund, no If no there were it is when providers statutory requirement to health care for underlying insurance maintain sufficient guaranty payment amounts of medical of unlimited cap, expenses and no would and economic keep an able to Ferdon? He would be be better pay jury it? Would verdict, but who would unlimited profession? care other health Would nurses leave providers continue to Wisconsin the state? Would leave all come to care that we have the excellent medical have legislature expect? all considered I that the conclude Contrary posi- many questions to the more. those ¶¶ concurrence, 190-91, the concurrence, of the tion caps legislature's experimentation of various de- with attempt arbitrary. scriptions an to slow It was was not yet escalating rapidly not of health care costs injured by pay sight those of the need lose *130 malpractice. very despite Furthermore, the fact that injured liability cap some is to cause of a
essence
fully,
previously
persons
ruled
we have
not to recover
recovery
e.g., caps
provisions,
on the
that similar
government-employee tortfeasors, do not
from
victims
City
protection
equal
Sambs v.
clause. See
violate
377-78,
¶ 340. The
also has
on
damages
Compensation
under the
Act,
Worker's
ch.
Compensation
injuries
102. Under the
Act,
Worker's
are
categorized
category
damage
and each
has a
limit
§
e.g.,
Hagen
See,
established.
Wis. Stat.
102.52-.56;
v.
(1997).
LIRC,
12, 23,
210 Wis. 2d
¶ 341. The also relies on Martin (1995), Richards, v. 2dWis. 531 N.W.2d70 proposition caps that "the correlation between on and the reduction of medical malpractice premiums or overall health care costs is at Majority op., indirect, weak, best and remote." 166 & strong broad, n. 221. The statement Martin but § Stat. 81.15 has renumbered Wisconsin been Wis. Stat. § § 893.83 and Wis. Stat. 895.43 has been renumbered Wis. Stat. 893.80; recovery against § government tortfeasors $50,000. has been increased to *131 support question in it. The answered Martin
does not
cap
application
a retroactive
violated
was whether
process rights.
plaintiffs
Martin, 192
2d at
due
Wis.
prospective
examine
a
effects of
Martin did not
198.
significant
damages.
a
There is
on noneconomic
assessing
in
the effect on future insurance
difference
premiums,
actuary
set
when an
can use the statute to
yet
on
that
insurance
based
is
rates
considering any effect on those future rates
occur, and
cap malpractice
already
placing
oc
a
on
that has
notwithstanding
However,
distinction,
that
curred.
majority opinion repeatedly
as a citation
inserts Martin
legislature
support
proposition that
was
wrong
finding
a
in
that
on noneconomic
reducing
have the effect of
future costs of health
would
Majority op., ¶¶ 115-19,
care Wisconsin.
majority opinion
adds
342. The
also
another
analysis of
wrinkle to our constitutional
a statute
new
challenged
being
as
unconstitutional
its face.
may
constitutionally
It
"A
asserts,
statute
be
valid when
constitutionally
may
enacted but
become
invalid be-
changes the conditions to which the statute
cause
applies.
past A
crisis does not forever render a law
authority
Majority op., There
valid."
is no
extraordinary
I
no
Indeed,
declaration.
could find
this
support
Wisconsin case that would
majority opinion
the view of
Certainly,
regard.
in this
it differs
Aicher,
from
said
when we examined
what we
legisla-
[the
whether there was
rational basis "when
provision."
ture]
Aicher,
enacted the
237 Wis. 2d
18-19).
(citing
Omernik,
2d at
It also
64 Wis.
Strykowski,
from
focus in
where
said
differs
our
we
upon
legislature
which the
"there is
rational basis
Chapter
enacting
655."
could and did act when
added).
(emphasis
Strykowski,
2d
at 508
Wis.
*132
majority opinion
Hanauer v. Re
cites
(1934)
public
Co.,
to
lenge
the
enacted
to a federal statute
Products,
Here it is material to however know condition Washington Obviously at past. different dates accurately carefully the facts should be ascertained and weighed, conveniently can this be done more Supreme Court of the District than here. The evidence preserved necessary if should be so it can be considered this Court.
Chastleton
¶ the on subject to the five- test used all part by Wisconsin courts for more than 30 Instead, mini-trial, it
years.
conducts
to find facts that
it then uses to
that
the
say
reasons the
set
legislature
out
it
when
enacted
655 are not borne out
chapter
by
the evidence it has examined.
It
trial
conducts
its
the
witnesses,
without
benefit of
without
each of
giving
the
an
to submit
parties
opportunity
relevant evidence
of their
It
choosing.
ducks evidence that
conveniently
does not
fit with its conclusion.8 For
the
example,
(1934)
Baldwin,
Borden's Farm Prods. Co. v.
Notes
data is notes Majority cap." op., of claims are... for an amount above the Thus, if any it is unremarkable that the has little Report's the median award. The conclusion that effect on Weiss similarly caps value is unrelated to the median award investigate unsurprising. Report apparently The Weiss did not uncapped in capped the mean value of awards versus states.
notes to actuarial estimates, damages "ifWisconsin's on noneconomic were to be potential declared unconstitutional, fund liabilities may by be increased an estimated million to $150 $200 million."51 nonpartisan Legislative In 2001, the Audit findings: Bureau reached the same "Action the Board Legislature of Governors and the . .. have contributed significant improvement to a in the Fund's financial position, accounting surplus which showed an of $27.2 study specifi- 30, million as of June cally 2000."52The 2001 legislature's cited the re-establishment of a limit on awards for non-economic in 1995 as one of the reasons behind the Fund's stabilization.53 nonpartisan study provided 282. The concrete finding: payments evidence for this "the Fund's claim year were below million in each $20 from FY 1997-98 through FY In contrast, 1999-2000. a number of recent in cases other states have resulted including verdicts of more than million, $30 a $79 million verdict York, New million $55 verdict in Illinois, and a million $40 verdict in Texas."54In other majority's today, words, thanks to the action the Fund may single be held liable for an award case that 51Legislative Bureau, Fiscal Paper Injured #450: Patients 2005). and Families Compensation (May Fund 8 Mueller, Letter from Janice Auditor, State to Senator Gary George and Representative Joseph Leibham, Co- (June chairpersons, 2001). Legislative Audit Committee 53Legislative Bureau, Audit An Audit: Compensa Patients (June 2001). tion Fund 11 at Id.
notes "General payments study claims concluded against physicians and 2002 tended to between 1996 all grew rapidly in states with noneco- less be lower Majority op., damage caps." ¶ 124. It then avoids nomic by saying it is not of this reduction consideration actually caps possible a factor were to tell whether Majority op., ¶¶ 125-26. reductions. majority opinion employs process 347. The legislature, weight findings gives no to the of the give great weight. supposed to which we are give Strykowski, 2d at 508. It does not 81 Wis. legislature, any as we should do doubt to the benefit respect legislature of a if accord the we are to government. co-equal Cole, 264 Wis. 2d branch of majority opinion talk" about re- "talks the 18. The heavy spect legislative enactments and the burden majority op., challenger ¶ 68, but it has, of a statute simply its It substitutes not "walk the walk." does legislature findings and concludes for that made § 655.017 is unconstitutional. that Wis. Stat. II. CONCLUSION Ferdon has not I conclude that 348. Because