Long-term care industry, others deserve relief from excess litigation

The following is an op-ed from Doug Alexander, executive director of the Partnership for Commonsense Justice. PCJ is a coalition of businesses and business groups, associations and individuals (including the Kentucky Chamber) dedicated to promoting and encouraging the need for fairness and excellence in Kentucky’s legal system.

The long-term care industry is the most heavily regulated health care industry in Kentucky. According to the Kentucky Association of Health Care Facilities, in addition to state requirements, health department regulations, fire and safety regulations and more, there are over 400 federal regulations with which operators must comply, not including OSHA requirements.

The health care industry in general and the long-term care industry in particular should be carefully regulated for reasons that are obvious to everyone. However, there is a side effect to regulation that has nothing to do with the quality of care or the effective delivery of services that cannot be ignored much longer.

The more abundant and specific are regulations governing any industry, the more opportunities there are to sue. That’s why the American Association for Justice, which represents the interests of trial lawyers, constantly lobbies for more and more rules and regulations governing everything.

By making the regulation of the long-term health care industry as meaningful and transparent as possible, something the industry itself has welcomed and encouraged, Kentucky has placed itself squarely in the cross hairs of predatory law firms from all over the United States intent on exploiting readily available and easily manipulated information.

The long-term health care industry’s reward for encouraging oversight and transparency is to invite lawsuits that drive up the cost of doing business and ultimately the cost of care to the very people the regulations are intended to benefit.

Many of these lawsuits have nothing to do with seeking redress for real negligence or wrongdoing or even with improving conditions for residents. If they exist at all, the alleged abuses often cited in advertisements seeking clients are often based on nothing more than citations for minor or correctable deficiencies. Some may have occurred and been corrected years in the past. Some may never have occurred at all. But because all citations must be reported, even those that are later proved to be unfounded, the data is easily exploited to prey on the emotions of seniors and their families in order to seek clients for litigation.

It is one thing to seek redress when a facility has been negligent. Every industry can and should be held accountable for its shortcomings. However, it is another thing altogether to take information intended to benefit consumers, and exploit it simply as a means of trolling for clients.

One of Kentucky’s largest providers of long-term care, Extendicare Health Services, has had enough. The company recently announced that it is leasing all of its nursing centers in Kentucky and leaving the state. In a May 14 news release, Tim Lukenda, president and CEO of Extendicare’s parent company, said that “the combination of a worsening litigation environment and the lack of any likelihood of tort reform in the State of Kentucky has made this the prudent decision for our company and unit holders.”

Although clearly under siege, the long-term care industry hasn’t asked for fewer regulations or relief from transparency requirements. It made a simple, reasonable and ultimately unsuccessful proposal in this year’s legislative session to create medical review panels to evaluate cases and determine whether the standard of care was met.

Trying to extort money from businesses using the courts is an all too common practice in our increasingly litigious society and no industry is immune.

Unfortunately, our failure to consider even modest and reasonable tort reforms like medical review panels and caps on runaway verdicts is earning Kentucky a reputation as a bad state in which to do business. The Institute for Legal Reform ranks Kentucky 40th among the states in the fairness of our litigation environment, down from 29th in 2008. Kentucky is 36th on the U.S. Tort Liability Index. In both studies we rank behind states with which we compete for jobs like Tennessee, Indiana, Ohio and Virginia.

If Kentucky is ever going to compete on a level playing field, we have to recognize that our legal environment is going to be an increasingly important factor that companies will evaluate. Considering reforms that will help relieve the courts of meaningless and frivolous lawsuits will not deny anyone with a legitimate case their day in court or fair and reasonable compensation if their complaint is found to have merit.

A screening process for health care related cases would be a good start. If our goal is to create an environment where the highest quality and standard of care is the goal, one way we can achieve it is by creating a legal environment that encourages compliance and makes the court system fair and efficient for legitimate cases.