Caps on Damages
Caps on medical malpractice damages are a controversial element of tort reform. Such caps typically target non-economic damages, such as those for intangible harm, which includes severe pain, physical and emotional distress, disfigurement, and loss of quality of life. Non-economic damages compensate for injuries that are difficult to quantify with dollar amounts and are often referred to as “quality-of-life damages.”
In 2003, Congress introduced bills to limit medical malpractice damages, arguing caps would lower medical malpractice insurance premiums for physicians, preserving our access to healthcare and making it more affordable. Former President George H. Bush proposed a nationwide $250,000 cap for medical malpractice cases, and many states have debated, passed legislation, or amended their constitutions to institute damage caps.
Proponents of medical malpractice damage caps argue that increased medical malpractice premiums will force physicians to stop practicing, limiting patient access to healthcare and increasing costs. However, medical malpractice insurance premiums are not the result of higher damages. Instead, insurance premiums have increased as a result of a lack of competition in the insurance industry, in conjunction with a mismanagement of reserves and a decline in investment income. Even if damage caps could head off the increase in medical malpractice insurance premiums, the effect would be negligible, amounting for only 2 percent of total healthcare expenditures.
In 2004, the nation’s largest medical malpractice insurer – GE Medical Protective Inc. – openly admitted that damage caps did nothing to lower physicians’ premiums. The admission came in response to the Texas Department of Insurance questioning why the company planned to raise physicians’ premiums 19 percent six months after Texas enacted caps on medical malpractice damages. In its response, GE Medical Protective stated that “non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1.0 percent.”
Instead of making healthcare more affordable and accessible, damage caps limit the integrity of our judicial system, put patients at risk, and leave innocent victims holding the bag.
Medical malpractice damage caps deny injured patients their right to a fair trial and due compensation. To preserve our civil justice system, juries should continue to assess damages on a case-by-case basis without arbitrary legislative interference. Several state appellate courts have struck down damage caps as a violation of state constitutions. More seriously, the courts have rejected many damage caps as a violation of our nation’s separation of powers. Juries function as a part of the judicial branch, and when legislative caps invade the power and sanctity of the judiciary, there is a clear and dangerous violation of our separation of powers clause.
Most seriously, damage caps have the potential to make healthcare less safe overall. Limiting physicians’ liability also limits their incentive to practice patient safety. Without the threat of having to answer to our justice system, some physicians will be less likely to make patient safety a priority. The insurance industry also plays a part in incentivizing safety. Most insurance carriers won’t take on the risk of a negligent physician to avoid paying out for future mistakes. However, if damages were capped, insurance carriers may weigh the cost of low payouts against high premiums and choose to insure high-risk physicians. Currently, when doctors are denied insurance coverage, they typically can’t practice. Damage caps would make a pool of negligent doctors insurable and therefore eligible to practice, flooding the healthcare industry with dangerous practitioners.
Finally, medical malpractice damage caps put the onus on victims, not doctors. In states where caps have been enacted, patients are left without fair compensation, forcing many of them to pay out of pocket for their injuries. If the impact of an injury exceeds the damage cap, many patients must rely on government assistance for necessary continued care. Innocent victims should not be held responsible for the negligent actions of another.
Medical malpractice damage caps are dangerous – not only to the integrity of our justice system, but also to innocent patients. Rather than lower costs, caps serve only to protect negligent doctors and further endanger our safety.