Posted by Bill Sandweg on 03 July 2017.
In 1975, in the face of skyrocketing premiums for medical malpractice insurance, California passed a law limiting jury awards for non-economic damages to a maximum of $250,000. That limitation has never been raised despite the fact that it would take $1,162,164 in today’s dollars to match $250,000 in 1975 dollars. Governor Jerry Brown, who signed the cap legislation in 1975, regrets that decision and has recommended that Congress not follow California’s example.
One of the reasons for Governor Brown’s change of heart has been California’s experience with malpractice premiums since the enactment of the cap legislation. The caps were imposed to keep insurance premiums down. It didn’t work that way. California continued to experience “malpractice insurance crises” despite the caps and insurers often raised annual premiums by double digit amounts. It was not until California’s voters passed an initiative limiting rate increases that California’s malpractice insurers were brought under control. In retrospect, Governor Brown says that it was “insurance company avarice, not utilization of the legal system by injured consumers” that was responsible for “excessive premiums.” The caps, he said, have had “an arbitrary and cruel effect upon the victims of malpractice.” The caps “have not lowered health care costs, only enriched insurers and placed negligent or incompetent physicians outside the reach of judicial accountability.”
As in the current Republican proposal pending before Congress, California juries are not told that their award of non-economic damages will be reduced to $250,000. This deliberate deception has on many occasions resulted in tragic outcomes. Past and future economic damages are not capped. But juries often do not distinguish carefully between economic and non-economic damages when making awards. They try to make it up to the patient with a large award and may not do the necessary math to determine exactly how much the future economic loss will be. They just assume that the millions they have awarded for non-economic damages will give the patient all the money she needs for future medical care. Some very badly damaged patients with huge future medical needs have seen juries award them millions in non-economic damages and only a little, if anything, in economic damages without realizing that those millions will be reduced to $250,000 and the patient will have nothing for the future medical needs. Jurors are often shocked to read about the reduction in the newspapers the next day.
Attempts have been made over the years to at least lessen the pernicious effects of the cap on injured patients. Most recently in 2014, a voter initiative was placed on the ballot. If passed, the initiative would have raised the cap to $1,100,000 to account for inflation since 1975. It would also have mandated drug and alcohol testing for doctors and placed some limits on the prescription of pain medication. It was strongly opposed by the medical profession and the insurance companies and went down to defeat.
Caps on medical malpractice awards demonstrate the hypocrisy of those who push for “reform” to end “frivolous” malpractice claims. Caps do nothing to weed out “frivolous” cases. What they do is penalize those with the least frivolous cases. They limit the recovery of those patients who have been most seriously injured by what the jury has concluded was actual medical negligence. Rather than promote personal responsibility, caps let negligent doctors and hospitals “get away with it.”
As noted by Governor Brown, caps do nothing to improve care for patients. Time and time again, studies have shown that the best way to reduce malpractice claims is to improve patient care. Let’s reduce malpractice claims the right way by promoting patient safety and not punishing those who have been injured by medical malpractice. Tell your Congresspeople what you think.