Investigative Reports, Independent Researchers Agree: Caps Won’t Solve Medical Malpractice "Crisis"

Doctors have used anecdotes to support their argument for caps on damages. But solid investigative research and in-depth scholarly analysis have shown that caps on non-economic damages bear no relation to lower malpractice insurance premiums. The following excerpts from investigative news articles, independent research projects, and government-sponsored studies found caps on economic damages to be an ineffective tool in reducing malpractice premiums.

  • Business Week, "A Second Opinion on the Malpractice Plague," By Lorraine Woellert (March 3, 2003)

"…clear away the dubious studies, the exaggerated line charts, the hysterical press releases and look at the numbers, and the statistical case for caps is flimsy. Here's what we found:

"Cap States vs. Non Cap States: Taken as a whole, capped states saw premiums rise an average of 12.7% last year; states without them saw premiums rise 20.4%, according to data provided by the Medical Liability Monitor. And if you go back even further, the difference between states with caps and those without narrows even more. The bottom line: caps might moderate premium hikes but not to the extent that tort reformers claim.

"On this and many other key points, proponents of caps simply aren't coming up with the facts to make their case. Instead, they're relying on scare stories--always a bad starting point for making serious policy decisions."

  • USA Today, "Hype outraces facts in malpractice debate," By Peter Eisler (March 5, 2003)

"A six week study by USA Today finds that while some doctors in particularly vulnerable specialties face severe problems, most physicians are minimally affected. Premiums are rising rapidly, but no more than other health care costs.

"There's little evidence that a $250,000 federal cap on pain and suffering awards will be a cure all for medical malpractice woes. That is because a big part of the increase in the cost of claims paid by insurers is due to growth in economic damages -- medical bills, lost wages, and other tangible losses that would not be capped."

  • Weiss Ratings, Inc., "Medical Malpractice Caps: The Impact of Damage Caps on Physician Premiums" (Report, June 2, 2003)

"Physicians continued to suffer a rapid increase in med mal premiums despite caps: In 19 states that implemented caps during the 12-year period, physicians suffered a 48.2 percent jump in median premiums, from $20,414 in 1991 to $30,246 in 2002. However, surprisingly, in 32 states without caps, the pace of increase was actually somewhat slower, as premiums rose by only 35.9 percent, from $22,118 to $30,056.

"At the same time, among the 19 states with caps, only two of the states, or 10.5 percent, experienced flat or declining med mal premiums. In contrast, states without caps were actually better able to contain premium rate increases, with six, or 18.7 percent, experiencing stable or declining trends.

"Tort reform has failed to address the problem of surging medical malpractice premiums, despite the fact that insurers have benefited from a slowdown in the growth of claims. The escalating medical malpractice crisis will not be resolved until the industry and regulators address the other, apparently more powerful, factors driving premiums higher.

"Although the implementation of non-economic caps has resulted in a slowdown in payout increases for insurers, most insurers have not passed those savings on to physicians, continuing to jack up premiums due to other powerful pressures. Thus, caps have been ineffective in reducing medical malpractice premiums for medical professionals."

  • Kentucky Legislative Research Commission, "The Costs of Medical Malpractice Insurance and its Effect on Health Care" (Report, June 12, 2003)

"There was no evidence that premiums were lower when non-economic damages are capped… Caps on punitive damages resulted in higher premiums for internists and general surgeons and fewer physicians in total for all three specialties."

Even actuaries retained by doctors promise only negligible savings from caps:

  • Tillinghast-Towers-Perrin, "Review of Proposed Legislation for Medical Society of New Jersey" (January 7, 2003)

"We would expect a $250,000 cap on non-economic damages would produce some savings, perhaps in the 5 percent to 7 percent range. A cap of $500,000 is likely to be of very little benefit to physicians."

July 8, 2003