Caps on Medical Malpractice Awards

Tort reform is utilized as a means of balancing the motivations of patients who may have been damaged by the negligence of physicians, as well as the motivations of physicians that face the burdens of lawsuit threats. Because of the constant change associated with medical malpractice litigation ever increasing premiums for liability insurance are likely to occur.

The goal of these types of legal claims is to make patients as whole as they can be should they suffer due to medical negligence. On the same note, being worried about lawsuits can lead to certain physicians practicing defensive medicine. Defensive medicine involves the ordering of tests that are not necessary but help to shield medical professionals from being sued. The downside of additional testing is that the costs must later be paid by either their insurers or by the patients themselves.

Liability Premiums

Damage payouts have continually increased since 1986, when the average amount awarded in damaged for patients was close to $95,000. However, by 2002, the average payout amount had increased to $320,000, representing an 8% growth per year.

The Congressional Budget Office states that the premiums for liability in medicine have increased over a two year span by 15%. Specialists and certain fields of medicine saw even higher increases. Obstetricians and gynecologists faced a 22% increase, while internists and general surgeons faced a 33% increase. These increases are due to insurers attempting to offset previous costs associated with making large medical malpractice payments. Statistically speaking, evidence indicates that states with stricter restrictions on liability are likely to have decreased medical malpractice premiums.

Limiting Damages

A 2003 bill brought before Congress by the House of Representatives and Senate was designed to limit the amounts that could be awarded in cases of medical malpractice. Another reason for introducing the legislation included lowering the premiums associated with medical insurance. This legislation reasoned that an increase in the amount of insurance malpractice premiums could possibly lead to doctors ceasing to practice medicine, resulting in a reduction in the overall amount of healthcare provided to patients.

However, opponents of these ideas claim the overall effect of lowering premiums is not a substantial when considering only around two percent of the total money spent on healthcare is a result of costs associated with medical malpractice.

Despite the fact that supporters of damage caps argue such caps will increase economic efficiency, opponents of these measures state that such caps are simply in place to protect doctors who are negligent while depriving patients harmed by acts of malpractice and negligence from receiving fair levels of compensation.