Accountability In The Medical Profession And New York’s Proposed Malpractice Damage Caps

On behalf of Pat Crispi at Keogh Crispi PC

In New York, lawmakers have been struggling to reduce Medicaid costs, and according to some, the way to do it is by capping payouts on medical malpractice claims. Problematically, however, those behind this push are hospital industry insiders, hardly neutral and detached observers on the merits of medical malpractice caps. A legislative measure aimed at setting rigidly fixed medical mal-practice award limits has recently been stopped dead in its tracks, much to the chagrin of doctors' lobbying groups. But, it may not be long before another similar bill reaches New York's congressional floor, leaving many citizens rightfully outraged at doctors' attempts to insulate themselves from liability at the expense of wrongfully injured patients.

Do Damages Caps Work?

Under the proposed reform measure, compensation to victims of medical malpractice for pain and suffering would have been limited to $250,000. Hospitals believed the limit would help take the sting out of the slashes to Medicaid funding in the state's budget: some claimed hospital insurance premiums would drop by a quarter.

But were these beliefs well founded? California was the first state to pass a $250,000 cap on what were called "noneconomic" damages in cases of negligence by health care professionals. Since California's law was enacted in the mid-seventies, 35 states have followed suit with some form of codified maximum for medical mistake cases. The experiences of these states are telling: rather than a decrease in medical malpractice insurance premiums, California saw an increase of 176 percent over the ten years following enactment of their damages cap. While this was somewhat lower than the growth rate for the rest of the nation, the cap provided nowhere near the kind of cost reduction predicted by hospitals lobbying for the New York damages limit.

Academic studies add credence to the point of view that damages caps do very little to combat rising physician insurance premiums. A 2005 study cited by the New York Times from economist W. Kip Viscusi of Vanderbilt University reported that capping damages by statute has produced just a 6 percent short term reduction in insurance premium costs. Another report from Americans for Insurance Reform examined 30 years of New York insurance information and found that legal outcomes had very little effect on insurance rate increases or decreases; rather, the business practices of insurance companies were to blame for major fluctuations.

It seems clear that a damages cap in New York would do little, if anything, to alleviate insurance costs, and there is already a safety valve built into the legal system that makes a cap unnecessary to prevent runaway jury verdicts. Under New York's Civil Practice Law and Rules, trial judges must always assess jury verdicts and modify them if they deviate "materially from what would be reasonable compensation."

Doctor Accountability, and Patient Rights

Even if damages caps can lead to modest reductions in insurance premium growth, it is necessary to weigh who they hurt and who they help. Many patient groups feel aggrieved by New York doctors' unflappable attempts to shepherd damages caps into law. After all, any other worker, from lawyers to construction employees to accountants, can be brought into court and forced to pay full compensation to rectify the damage caused by careless work. There seems to be little good reason why doctors alone should be insulated from full liability for negligent mistakes or for acting without regard to a minimum standard of care.

Those most harmed by medical malpractice damage caps are the patients actually injured through thoughtless oversights. Even $250,000 seems like a pittance in return for a lifetime of blindness, paralysis, disfigurement, or other life-altering condition brought on by another's careless mistake. Furthermore, limits on damages can mean injured patients have difficulty even retaining a lawyer, since the vast time and expense commitments involved in medical malpractice cases can mean the attorney's portion of even a maximum recovery will not amount to much. The entire concept of medical malpractice damages caps empowers doctors to dodge accountability and encourages them to shirk full responsibility for negligently causing traumatic injuries.

The Real Way to Reduce Costs

After all the debate, there is no indication that doctors in states with damages caps end up passing on any of the even minimal savings to patients. One of the best ways to actually decrease costs for everyone in the system is to lower the incidence of doctor mistakes in the first place. After developing an extensive and meticulously thorough safety improvement program, medical professionals at New York-Presbyterian Hospital/Weill Cornell Medical Center slashed the yearly costs of malpractice payouts and legal defense expenses by an incredible 99 percent between 2003 and 2009. Keeping doctors accountable by allowing for full damages is one way to encourage similar initiatives.

Health care costs are indeed an important issue. But medical malpractice damages caps are not the way to address the problem. Physicians should not feel entitled to the passage of a law limiting their accountability, especially when it comes at the expense of their own injured patients.