According to research conducted by Milliman USA, a legislative bill proposed by the MMS could save 25 to 30 percent of total professional liability costs borne by medical care providers and liability insurers. Milliman, one of the nation's largest independent actuarial consulting firms, conducted its study of the bill on behalf of the MMS.

According to the report, the legislative proposal's biggest impact would be produced by a provision to strengthen the existing $500,000 cap on noneconomic awards, resulting in 12.7 percent savings. Further, Milliman found that eliminating the current 12 percent interest rate added to malpractice pay outs and reducing it to the prevailing federal T-bill rate would produce savings of 8.2 percent.

The Milliman study relied heavily on Massachusetts-specific data where available, as well as data from other states -- primarily Florida and Texas.

"This analysis offers compelling information that liability reform would have substantial benefits for our health care system and our physicians," said MMS President Thomas E. Sullivan, M.D.

The Milliman study also found savings in these categories of the bill:

• Allowing periodic payments rather than lump sums for larger judgments, 4.6 percent.
• Allowing evidence of future recoveries from collateral sources -- such as health insurance coverage for medical needs or workers compensation or disability insurance coverage of wage losses, 4.6 percent.
• Limiting physician liability to only the doctor's proportion of fault, 3.3 percent.

It is estimated that these changes would result in an aggregate savings of between 25 and 30 percent. The Milliman study also maintained that "non-quantifiable" cost savings beyond 30 percent are likely.

For example, enacting a solid $500,000 cap "will produce a one-time reduction in costs, but it will also decrease the rate at which future costs will increase," wrote Milliman actuary William Murphy, who conducted the research.

Public Aware of Premium Problems
Meanwhile, a recent statewide survey conducted by the McCormack Graduate School of Policy Studies at the University of Massachusetts-Boston shows that 83 percent of Massachusetts voters consider soaring physician malpractice premiums to be either a health care "crisis" or a "major problem," and 74 percent favor limiting the amount that patients can be awarded for "pain and suffering" in lawsuits.

This latest survey demonstrates that the public has become more acutely aware of the negative impact that rising premiums are having on the health care system. For example, 68 percent said physicians leaving the state because of a declining work environment is a serious problem. And 58 percent said they believe patients bring too many lawsuits against doctors.

"The issue now appears to have what we characterize as ‘voter penetration'," said Lou DiNatale, J.D., director of the Center for State and Local Policy at the McCormack School. "It has reached the stage of being a political issue and could become a major topic in the next campaign season."

The McCormack School surveyed 402 registered Massachusetts voters between September 3 and 7. The margin of error was plus or minus 5 percent, with a 95 percent confidence level.

- Tom Walsh