Capitation on Trial

IN A VENTURA COURTROOM LAST DECEMBER, TWO SIMI VALLEY PHYSICIANS STOOD ACCUSED OF PLACING THEIR FINANCIAL SELF-INTEREST OVER THE HEALTH OF THEIR PATIENT. WHILE ULTIMATELY DECIDED AS SIMPLE MALPRACTICE, THE CASE COULD PROVE TO BE A HARBINGER OF THINGS TO COME.

California Medicine – By B.J. Palermo February 1996

Mark O. Hiepler, considered by many to be one of the health insurance industry most dangerous adversaries, moved with almost evangelical zeal across the center of the Ventura courtroom. The lanky, clean-cut lawyer outlined his malpractice case to the jury against a blown-up photograph of the smiling Ching family – Joyce, her husband, David and their son, Justin all seated on the edge of a Spanish-style fountain.

It was a sunny, Southern California day when that picture was taken - a day long before the woman showed up at her doctor's office complaining of abdominal pain and before her fare would become the focus of a major escalation in Hiepler's crusade. The 33-year-old attorney had already won an $89.3 million dollar verdict against Health Net after the HMO denied coverage of a bone marrow transplant to his own sister. But this time his target was the two Simi Valley doctors he blamed for Joyce Ching's death from colon cancer at he age of 35.

Justin, now 5 years old, "had a little clip of his mom's hair he keeps with him", Hiepler told the jury. And, from a children's book he began reading: "I love my mommy because…she reads me stories…she listens when I talk…she gives me great hugs…"

Then Hiepler propelled himself into the heart of his argument: "The loud clamor of the defendant's assembly line practice of medicine kept them from hearing, noticing, and diagnosing what was a loud alarm of cancer." He also said that this case was "about delay…and a lethal mix of delay and cancer."

It was a speech meant to enrage, as well as sadden. And while the two defendants in the case - family practitioners Elvin Gaines and Dan Engeberg - managed to sit through it in stone-faced silence, the decedent's husband, 37-year-old David Ching was moved to tears.

Still, something very conspicuous was left out of Hiepler's closing argument. For this was not supposed to be just another medical malpractice lawsuit against a pair of negligent doctors. Rather, it was supposed to put on trial for the very first time the practice of capitation - a contracting system that places financial risks on physicians and medical groups which critics contend encourages doctors to provide less care. To be specific, Hiepler had argued from the start that it was the financial incentives in place under capitation that had contributed substantially to Joyce Ching's inability to see a specialist until her cancer spread beyond the point where she could be helped.

This is what drew so many reporters to the Ventura County courthouse last December. This is also what led Hiepler to appear on " 60 Minutes" and other television programs. But in his summation to the jury there were absolutely no direct references to this case charge. And then when defense attorney Michael Gonzalez got up to speak, he further reinforced the impression that" the breach of fiduciary duty" was no longer an issue.

"This is first, and last only a medical malpractice case," he told the jury. "That is the only issue involved for your consideration." Gonzalez then replaced the photograph of the smiling Ching family with an oversized illustration of a colon.

Confused news reporters scrambled for answers. Weeks before judge Ken w. Riley had imposed a gag order on everyone connected with the trial, but also conducted private hearing on matters.