The Malpractice Cap: Order in the Court?

A few years ago, in a relatively small town in a quiet (not known for big lawsuits) area of the country, an Ob/Gyn (Obstetrics and Gynecology) doctor opened his new practice.  In helping the community while beginning to raise his family, he earned $300,000 in his second year.  Only seven years later, his malpractice insurance cost $300,000-and he had not reported a single claim!

Jury awards for medical malpractice in the U.S. have reached dizzying heights, prompting young doctors to flee states like Florida, New Jersey, Pennsylvania and others. For example, a March 20, 2003 article in the Pittsburgh Tribune-Review reported that the number of practicing doctors in the state, younger than 35, had fallen from 12.4% in 1989 to a mere 4.7% in 2000.  Other states report similar rates of defection.

Two other adverse results are astronomical insurance premiums for malpractice insurance, especially for thoracic and neurosurgeons, anesthesiologists and other specialists, and equally skyrocketing costs for healthcare (malpractice premiums alone can’t cover the claims).  Now the gloves are off, and several states have introduced legislation to cap pain-and-suffering awards at $250,000, though no one seems to be able to say how that figure is calculated.  There are mountains of data, of course, to support arguments for outright caps, no caps, graduated award tables and other approaches to the issue.  In many cases, it’s the same data.

How much is pain worth?  A 20 year old, maimed or disfigured for life through a doctor’s error, who gets a $250,000 award and lives to age 77 (life insurance table), has been awarded $12. a day or $8. a day after the attorney took 33%.

How much was Jesica Santillan worth?  Jesica died in the esteemed Duke University Medical Center in February 2003, after doctors transplanted lungs and a heart that were an obvious mismatch.  You might argue that she was an illegal immigrant whose parents smuggled her into the country to get medical care not available to her in Mexico.  But doctors could easily have made the same mistake to a Rhodes Scholar or Nobel Laureate.  Some argue that a person is a person, that all lives have the same value.  The passion on every side of the issue-and there are more than two sides-is sincere.

California passed MICRA, the Medical Injury Compensation Reform Act, in 1975, setting a $250,000 cap on non-economic damages.  $250,000 1975 dollars are worth $84,000 today.  Adjusted for inflation, the MICRA “cap” should be $897,000 today. 

Another critical element to the malpractice mosaic is the fee structure attorneys enjoy.  It’s an element under siege.  Should an attorney get a third or half of a jury award?  There may not be an all-purpose answer to the question.  Litigating a complex medical claim can be very time-consuming for attorneys, paralegals, and the experts hired to provide expert testimony.  Obviously, all the money in that fee doesn’t wind up in one lawyer’s pocket.  Defense is equally expensive, and those costs are borne by the malpractice carrier.  Lawyers who file frivolous suits cloud the picture even further.

Proposals abound to deal fairly with this complicated aspect of our culture.  Some advance sliding scale fees for attorneys; some propose different caps for different injuries.  New ideas appear almost daily.  But “local” climates prevail, as they have in other instances.  For example, you might suffer a malpractice injury in a Minnesota hospital, but you’re allowed to sue in your home state of Texas, which may be a friendlier jurisdiction.

Answers are neither fast nor easy, but with the problem out in the open in so many states, fair, rational solutions that reach across state lines and political ideologies may at least be on the horizon.