Evidence that Cap on Damages Reduces Malpractice Premiums Inconclusive

During many election cycles, “tort reform” becomes a hot topic among candidates. Simply put: Advocates of tort reform argue there must be limits to the damages – or the compensation – that are awarded in personal injury cases. Opponents of tort reform believe there should be no limits on these awards. Each side typically presents mountains of evidence in an effort to bolster their arguments, but there are often holes in this so-called evidence. Among one of the more popular claims by tort reform advocates: Capping damages will result in lower medical malpractice insurance premiums for healthcare providers, resulting in lower medical costs for patients. The evidence, however, does not always support that claim.

The Argument Against Tort Reform

Opponents to tort reform include consumer advocates, medical malpractice attorneys and personal injury lawyers.

Tort reform opponents argue it’s unfair to cap damages and deny victims the compensation they deserve for injuries suffered as a result of another party’s negligent behavior. Caps on medical malpractice damages might also make it more difficult for a victim to find a Chicago medical malpractice attorney to handle their case. That’s because personal injury attorneys – including medical malpractice lawyers – are typically paid a percentage of any money they win on behalf of their clients. Because the lawyer foots the bill until a verdict or settlement is reached, and because it can be expensive to prove a medical malpractice case in court, attorneys may be less likely to take on new medical malpractice clients.

The Argument for Tort Reform

Proponents of tort reform typically include businesses, insurance companies and trade associations, particularly those representing professionals in the healthcare profession.

Those who are advocating for tort reform argue that multimillion-dollar personal injury verdicts increase the cost of doing business, and those increased costs are passed on to customers. Healthcare tort reform advocates in general say medical malpractice damage awards are responsible for sky-high medical costs. They also claim doctors are unwilling to take on risky patients or perform high-risk procedures for fear of being hit with medical malpractice lawsuits.

Does Tort Reform Lower Medical Malpractice Insurance Premiums?

Most tort reform advocates point to lower medical malpractice insurance premiums – and, consequently, lower healthcare costs – as a prime benefit of tort reform. However, that’s a specious argument. Some evidence is inconclusive, while other evidence suggests that, at best, medical malpractice premiums would stay flat as a result of tort reform.

In 2014, California voters took to the polls to vote on Proposition 46 Medical Malpractice Lawsuits Cap and Drug Testing of Doctors Initiative. The state had previously imposed limits on medical malpractice awards, and Prop 46 would have raised those limits. The measure was ultimately defeated.

Leading up to the vote, Modern Healthcare wrote:

“Physician, insurance and business groups have long argued that soaring medical liability costs have substantially driven up U.S. healthcare costs. They are worried about the symbolism of raising the cap in California. … What Proposition 46 opponents don’t mention is that medical liability premiums have been flat or declining since 2006, even in states that have not imposed caps on damages, according to liability experts, including insurance company representatives. According to the 2014 Medical Liability Monitor’s annual rate survey, rates for three common specialties across the country declined from 2013 to 2014. That’s been the trend since 2006, according to the survey, which is widely considered authoritative.”

The article goes on to note that a number of factors may be responsible for stagnant medical malpractice premiums. These include greater competition among medical malpractice insurance providers, fewer claims, and lower demand for med mal insurance as more doctors go to work for hospitals.

Illinois Tort Reform Efforts

Illinois has a medical malpractice damages cap on the books, but the law was found unconstitutional in 2010. However, Illinois Republican Gov. Bruce Rauner – who’s typically seen as being pro-business – has been pushing for more tort reform in Illinois.

In May, Democratic House Speaker Michael Madigan held hearings to demonstrate how citizens could be hurt by further tort reform. The hearing brought together medical malpractice attorneys and victims to testify against tort reform. Another hearing focused on Rauner’s efforts to impose tort reform on workers’ compensation law; that hearing included testimony from Illinois workers who have been injured on the job.

The Chicago Medical Malpractice Attorneys of Cogan & Power, P.C.

At Cogan & Power, P.C., our medical malpractice lawyers vigorously represent patients who have been the victims of doctors’ negligent and reckless behavior. Our clients include individuals who have been misdiagnosed, as well as patients whose doctors have failed to make a timely diagnosis and those who have been hurt as a result of a medical mistake. For a free consultation with a Chicago medical malpractice attorney, contact us today at (312) 477-2500.