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Barking up the wrong tree

Non-economic damages caps reduce medical malpractice payments, but not costs.

Medical liability accounts for only 2.4% of all health care costs, yet medical malpractice reform is often hailed as a critical ingredient to reducing costs. Though capping non-economic damages—those that compensate patients for their pain, suffering, emotional distress, and disfigurement following a negligent medical error—reduces liability payments, it doesn’t accomplish what it’s meant to do. Costs are still sky-high, and patients that have proven in a court of law that they were the victims of medical neglect and malpractice are left behind.

Source: Donnie Ray Jones (Flickr/CC)

Source: Donnie Ray Jones (Flickr/CC)

A new study from Health Affairs took painstaking efforts to empirically measure the impact of capping non-economic damages. However, studies like this fail to call attention to the larger shortcomings of the medical malpractice system and do not address policy alternatives to capping damages.

Medical malpractice reforms are often one-sided in their protection of physicians and health care systems, usually to the detriment of injured patients, health care quality, and ethical principles of transparency and disclosure of harm. Infrequent utilization of the legal system by injured patients (only 2% of victims of medical errors actually sue) and disproportionate victories by health care providers (defendants win in the majority of cases) are masked by seemingly high average payments in the $200,000-$400,000 range.

Damages caps are arbitrary, limiting financial recovery for those patients with the greatest losses, and fail to address the bigger issues of prevention and quality improvement.

An alternative to medical malpractice that has recently received attention focuses on reforming communication rather than the legal system. Providers are proactively identifying errors, implementing preventive measures, and voluntarily disclosing the error to the patient. These “disclose and apologize” models have shown promising results in reducing errors as well as financial and emotional costs.

By addressing errors as they happen, health care systems can avoid lengthy legal battles and physicians can maintain a relationship with their patients. In order to advance fair and economically sound policy, quality and patient outcomes should be included in future research. In the pursuit of lowering costs, let’s not unnecessarily demonize a legal avenue for patients who have been harmed to receive compensation.

commentary by Megan Douglas, JD


The impact of medical malpractice reforms on the average size of malpractice payments in specific physician specialties is unknown and subject to debate. We analyzed a national sample of malpractice claims for the period 1985–2010, merged with information on state liability reforms, to estimate the impact of state noneconomic damages caps on average malpractice payment size for physicians overall and for ten different specialty categories. We then compared how the effects differed according to the restrictiveness of the cap ($250,000 versus $500,000). We found that, overall, noneconomic damages caps reduced average payments by $42,980 (15 percent), compared to having no cap at all. A more restrictive $250,000 cap reduced average payments by $59,331 (20 percent), and a less restrictive $500,000 cap had no significant effect, compared to no cap at all. The effect of the caps overall varied according to specialty, with the largest impact being on claims involving pediatricians and the smallest on claims involving surgical subspecialties and ophthalmologists. PMID: 25339633

Seabury, SA et al. Health Aff. 2014; 33 (11): 2048-56.

Megan Douglas, JD
About Megan Douglas, JD

Megan Douglas is the Associate Director of Health Information Technology Policy in the National Center for Primary Care at Morehouse School of Medicine in Atlanta, GA. She is a licensed attorney and focuses on health policy and its impact on individuals from underserved communities. She was a 2012-13 Health Policy Leadership Fellow under Dr. David Satcher, 16th Surgeon General of the United States. Megan has worked on health policy issues related to neurodevelopmental disabilities, HIV and AIDS discrimination, racial and ethnic health disparities, and individuals identifying as LGBTQ. In her current role, she is looking at the impact of Health Information Technology (HIT) policies on healthcare providers who serve underserved communities and is identifying ways to leverage HIT to improve health outcomes for the underserved. Contact: Website | Facebook | Twitter | Google+ | More Posts

1 Comment on Barking up the wrong tree

  1. Sure, noneconomic damage caps are arbitrary. But they are the only medical malpractice reform proven to reduce premiums and promote retention of physicians in areas of the country where they are put in place. Malpractice is, of course, for patients who are injured to recoup compensation. But, when awards are so high as to threaten the supply of health care services, doctors (the majority of whom practice good medicine) need relief. Noneconomic caps provide this relief. The question now is, how can you compensate injured patients?

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