Vital Times 2020 - 104

rates, and in Southern California to announce that
they would not even renew the existing policies of
thousands of physicians? The preceding decade
had seen an escalating number of headline-catching
multimillion-dollar jury awards to malpractice
plaintiffs for the pain and suffering caused by
alleged incidents. Unlike the costs of actual medical
care, loss of earnings, ongoing life assistance, and
other costs that could actually be calculated in
damage awards, " pain and suffering " is considered
a " non-economic damage. " Therefore, juries were
free to award any amount they could reasonably
imagine, which in some cases appeared to be
beyond imagination. Lawyers specializing in medical
malpractice, a relative rarity in earlier decades,
were attracting legions to this newly lucrative field.
Newspapers warned of the effects of this rising
trend with these headlines appearing in January and
February of that year:
" New Bay Area Crisis in Medical Care: Doctors Might
Halt Practice, " SF Chronicle
" Doctors Face Insurance Crisis - May Affect 8000
in Southland, " LA Times
" Insurance Rates Imperil Medical Care, " SJ Mercury
News

Another future CSA President (1997), Ben
Schwachman, had returned in 1969 after service in
Vietnam to practice in Los Angeles. He describes
anesthesiology at the time as a modestly paid field
that often had trouble filling residency positions, and
not at all the esteemed, highly acclaimed and wellrewarded specialty it has become in the decades
since. As he recalls, during the 1960s, most of the
country's anesthesiologists were paying pennies
a day for malpractice insurance, so California was
considered an exorbitant outlier with rates of several
hundred dollars per year. Yet this was considered a
necessary practice expense. As jury awards began
the abrupt ballooning seen in the late 1960s and
early 1970s, far more than the growing rate of
national inflation, these premiums slowly grew into
a major expense in the thousands, which drove a
lesser but gradual increase in anesthesiologist's
fees. These diverging trajectories were aimed
toward a catastrophic eventuality, and in 1975, the
insurance industry responded in an entirely practical
and self-preserving manner by either withdrawing
from the California market or pricing coverage
at a stratospheric level that would protect their
shareholders (but not their clients).
Organized medicine reacted by forming a Physicians
Crisis Committee as an aggressive force to work
with the California Medical Association (CMA) and
the California Hospital Association (CHA) toward an
urgent solution. As the malpractice crisis continued
to worsen, the influence of the state's trial attorneys
in Sacramento smothered efforts to produce
legislative reforms that might forestall catastrophe.

Ben Shwachman, MD

104 |

CSA Vital Times

California physicians, fearing financial ruin, were
very openly leaving the state and retiring from



Vital Times 2020

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