Doctors, Lawyers, and Campaign Contributions

Complaints about health care are numerous and widespread: managed care restricts access to doctors, prescription drugs cost too much, too many Americans are uninsured. No wonder that an ABC News/Washington Post poll found that 54% of Americans are dissatisfied with the quality of health care in the country. To the litany of problems, doctors are adding another: malpractice lawsuits are driving them out of business.

Outside of the Capitol, the narrative of the malpractice story is this: doctors, unable to afford insurance, are turning away patients. Under the Capitol dome, however, the issue engages two of the most powerful lobbies in Springfield: the Illinois State Medical Society (ISMS) and the Illinois Trial Lawyers Association (ITLA). The story behind the story is of two big contributors battling to shape public policy in Illinois’ unregulated campaign finance system.

Both the ISMS and the ITLA are political insiders of the highest order. Both are staffed by former aides to legislative leaders from both sides of the aisle. Within days of each other in July 2003, both groups gave identical $25,000 checks to the governor’s campaign fund. Both groups are perennial Top Ten PAC donors, contributing, on average, twice what second-ten donors typically contribute. As a result, legislators have to weigh not only what is best for their constituents, but also how to manage their own relationships with two large campaign contributors, each capable of influencing re-election efforts.

Top Recipients of Illinois State Medical Society Contributions, 1/1/2001 – 3/16/2004 1) House Republican Leader Lee Daniels* $160,000 2) Senate President James ‘Pate’ Philip* $145,000 3) Gov. Rod Blagojevich $143,668 4) House Speaker Michael J. Madigan $130,000 5) Senate President Emil Jones * $115,000 6) House Republican Leader Tom Cross * $80,000 7) Attorney General Lisa Madigan $73,667 8) Attorney General Jim Ryan $60,000 9) Senate Republican Leader Frank Watson $53,054 10) Gov. George Ryan $32,000 * - Includes giving to caucus PAC

Based on its political giving, ITLA might seem overmatched; while bigger than most other PACs, ITLA typically gives a little more than half of what the ISMS gives to candidates for statewide, legislative, or appellate judicial office. But while many trial lawyers give to the PAC, many also donate directly to candidates. Past presidents of ITLA give about as half much outside the PAC as ITLA’s state PAC itself gives; all told, ITLA members give a little more directly to candidates than the PAC itself distributes. Total political giving to statewide, legislative, and appellate judicial candidates by trial lawyers is at least twice what the ITLA state PAC gives. All told, ITLA PAC contributions skew heavily Democratic.

“We support candidates who believe in the jury trial system,” asserts Schostok. “If you want impediments to that system, then you won’t get support from us. I’m not doing anything any other than what any American does, when they give to candidates they support.”

Giving by medical doctors, other than through ISMS state PAC, is fairly small; ISMS’ state PAC gives twice what individual doctors, medical practices, and other direct-service doctors’ groups give to state candidates. What is surprising, however, is that direct contributions from doctors and their practices account for just half of ISMS’s state PAC receipts. The biggest single donor to ISMS state PAC is the largest medical malpractice insurer in Illinois, the Illinois State Medical Inter-Insurance Exchange, or ISMIE. ISMIE was formed by ISMS members in the 1970s, and the insurer retains a close relationship with ISMS, sharing office space and, occasionally, staff. ISMIE’s contributions account for about half of what ISMS’s state PAC collected over the past three years.

ISMS gave Republican gubernatorial nominee Jim Ryan $60,000, including $25,000 in May, 2002. In October, 2002, ISMS began giving to Democratic nominee Rod Blagojevich; ISMS made two $50,000 contributions in the month before election day, and has since given another $44,000.

In its legislative agenda, the ISMS seems to oscillate between two central issues: malpractice and managed care. When the ISMS lobbies managed care issues, it tends to line up against business and insurance lobbies and with Democrats. When lobbying for malpractice reforms, the ISMS tends to grapple with the ITLA and finds more support with Republicans.

In a memo circulated to legislators, the ISMS declared, “The Illinois health care system is in a serious crisis …[caused by] an out of control legal system that allows for excessive, non-meritorious litigation and skyrocketing awards for medical liability lawsuits.” Its legislative reform package includes caps on non-economic damages, tighter credentialing of expert witnesses, state grants to cover malpractice premiums for certain doctors, and protection of physicians’ personal assets in malpractice cases, among other reforms. The ISMS declined to be interviewed for this ICPR issue briefing.

Top Recipients of Illinois Trial Lawyers Association Contributions, 1/1/2001 – 3/16/2004 1) Gov. Rod Blagojevich $128,400 2) Senate President Emil Jones* $82,500 3) House Speaker Michael J. Madigan* $63,787 4) Attorney General Lisa Madigan $31,000 5) State Rep. Tom Dart $17,500 7) Comptroller Dan Hynes $15,000 7) State Senate Candidate Paul Mangieri $15,000 8) State Rep. Robert Rita $13,250 9) State Sen. Bill O’Daniel $12,500 10) State Rep. Lou Lang $12,244 * - Includes giving to caucus PAC

Not surprisingly, lawyers who file malpractice cases see things differently. While agreeing that the spike in malpractice insurance rates is a problem, they deny that malpractice lawsuit judgements are the cause. “Over the past 30 years or so, total premiums have grown far faster than total malpractice payments,” notes Michael Schostok, President of the ITLA. “We’re looking for reasonable and legal solutions to provide relief for physicians now and in the future.” And that solution, ITLA argues, is best found in tighter insurance regulation. ITLA’s proposal would focus on tighter scrutiny of malpractice rates and greater sharing of actuarial data with insurance companies willing to offer coverage to Illinois doctors. ITLA claims that more carriers are ready to cover Illinois doctors but lack the data to accurately price their product.

The lawyers’ and doctors’ associations spar over malpractice issues with remarkable regularity. In the mid-1990’s, the result was a new law capping parts of malpractice verdicts. That law was declared unconstitutional in 1997. In the mid-1980s, the result was a requirement that plaintiffs file a certificate of merit, showing that a doctor agreed with the victim’s allegations. And in the mid-1970s, the result was a law banning punitive damages in malpractice cases.

Policy aside, arguments over malpractice reforms tend to get acrimonious. Allies of ISMS are quick to point out that ITLA members rely on the size of total verdicts and settlements for their incomes, and so have an economic reason to oppose capping any portion of malpractice payments. Many ITLA members, including President Michael Schostok, specialize in medical malpractice cases and would be significantly affected by any plan to reduce payments to victims. For their part, ITLA partisans point out that ISMIE has economic incentives to keeping competitors out of Illinois, even when competition would benefit its doctor-members. They claim ISMS faces a conflict of interest between representing its members and aiding the insurer.

Outside the Capitol, doctors are responding to increases in malpractice insurance rates. The problem is particularly acute in southern Illinois. “This story, literally for me, came out of nowhere,” said Caleb Hale, who covers the malpractice issue for the Southern Illinoisan. “It’s a big issue in Southern Illinois because there’s not a lot of anything, not the population, not the business, not the number of physicians of Chicago. If Chicago loses 10 physicians, who notices? In Carbondale, 10 doctors is a big deal.” Hale says he files a story each week on malpractice.

While these two professional organizations argue over reforms, doctors are shuttering their practices and turning away patients. Caught in a clash of titans, the public must hope that sound policy is not clouded in debate dominated by political insiders and big money. As long as interest groups can make unlimited campaign contributions to candidates and caucuses, legislative debate on issues like this will be open to charges of pandering and influence peddling, regardless of which side wins.