Medical Malpractice and Legal Challenges to Caps on Noneconomic Damages

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Medical Malpractice and Legal Challenges to Caps on Noneconomic Damages

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Medical Malpractice and Legal Challenges to Caps on Noneconomic Damages

  1. Medical Malpractice and Legal Challenges to Caps on Noneconomic Damages Wells, B., Ghazi, K., Sherif, A. University of Florida August 2 nd , 2004
  2. The Medical Malpractice Crisis <ul><li>“ Our badly broken medical liability system is responsible for higher costs for patients, lower quality of care, and for decreased access.” – President G. W. Bush </li></ul>
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  4. Why do we need medical malpractice laws? <ul><li>Medical Errors </li></ul><ul><ul><li>Kill between 44,000 and 98,000 per year </li></ul></ul><ul><ul><li>Medication errors harm about 7,000 per year </li></ul></ul><ul><ul><ul><li>1 per 131 outpatient deaths, 1 per 854 inpatient </li></ul></ul></ul><ul><li>Need for a way to deter medical errors and to compensate those harmed by substandard care </li></ul>Source: Institute of Medicine – http://www.iom.edu
  5. Introduction to Noneconomic Damages Caps <ul><li>Texas </li></ul><ul><ul><li>Became the first state to pass a constitutional amendment empowering the legislature to limit damage awards in medical malpractice lawsuits in September 2003 </li></ul></ul><ul><li>How did medical malpractice awards become so important that a state would find it necessary to address the issue in its constitution? </li></ul>
  6. Medical Malpractice Statistics <ul><li>An average of 10,000 medical malpractice lawsuits are filed each year. </li></ul><ul><li>The median malpractice settlement in 1999 was $600,000 (63% increase from 1993). </li></ul><ul><li>The median award in cases involving obstetricians and gynecologists in 2000 was $1M (43% increase from 1999) </li></ul>
  7. Medical Malpractice Statistics <ul><li>In the 1994 – 1996 period, 34% of all awards were > $1M </li></ul><ul><li>In the 1999 – 2000 period, 52% of all awards were > $1M </li></ul><ul><li>In Mississippi there have been 21 verdicts of $9M or more since 1995 (one of which was $100M) </li></ul><ul><li>Before 1995 there were no verdicts > $9M. </li></ul>
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  9. The Actions of Physicians <ul><li>MD’s are giving up practices or limiting practices to patients without health conditions that increase litigation risk </li></ul><ul><li>MD’s are moving to states with better legal systems and lower insurance rates </li></ul><ul><li>MD’s are changing their behavior to avoid suits </li></ul>Source: Confronting the New Health Care Crisis – www.aspe.hhs.gov 7/25/02: HHS – Office of Disability, Aging, and LTC Policy
  10. Defensive Medicine <ul><li>Physicians are using defensive medicine as a form of risk management </li></ul><ul><li>This “malpractice pressure” has a more significant impact on diagnostic testing than it does on treatment decisions. </li></ul>
  11. Defensive Medicine <ul><li>This situation leads to unnecessary medicine and increased costs: </li></ul><ul><ul><li>79% of MD’s admit to ordering more tests </li></ul></ul><ul><ul><li>74% referred to specialists </li></ul></ul><ul><ul><li>51% have recommended invasive procedures </li></ul></ul><ul><ul><li>41% have prescribed more medications </li></ul></ul>
  12. State Reforms <ul><li>Some states have reformed their litigation systems and installed caps in a effort to lower the rise in premiums </li></ul><ul><ul><li>MICRA in California </li></ul></ul><ul><li>States with no caps have seen </li></ul><ul><ul><li>Increased health care costs </li></ul></ul><ul><ul><li>Increased insurance premiums </li></ul></ul><ul><ul><li>Increased taxes </li></ul></ul><ul><ul><li>Decrease in access to quality care resulting in threats to quality of care </li></ul></ul>
  13. Source: Confronting the New Health Care Crisis – www.aspe.hhs.gov 7/25/02: HHS – Office of Disability, Aging, and LTC Policy
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  16. Legal Challenges to Noneconomic Damages Cap <ul><li>Illinois Supreme Court – Best v. Taylor Machine Works </li></ul><ul><ul><li>Medical liability reforms passed three times </li></ul></ul><ul><ul><li>Struck down by SC each time </li></ul></ul><ul><ul><li>Had a $500,000 cap in product liability, medical negligence, and wrongful death </li></ul></ul><ul><ul><li>5-1 decision that core provisions of the law “improperly encroached upon the judiciary’s powers and violated the state constitutional proscription against special legislation by arbitrarily discriminating against injured plaintiffs” </li></ul></ul><ul><ul><li>Defendants can be held joint and severally liable </li></ul></ul>Source: http://www.ama-assn.org/ama/pub/category/12386.html
  17. Legal Challenges to Noneconomic Damages Cap <ul><li>Michigan - MCLA § 600.1483 – limits recovery of non-economic damages to $280,000 (except in some cases where it is $500,000). </li></ul><ul><li>Zdrojewski v. Murphy 254 Mich App 50 (2002) </li></ul><ul><ul><li>Appeals court held the cap as constitutional </li></ul></ul><ul><li>Neal v. Oakwood Hospital Corporation, 575 NW2d 68, 77(Mich. App. 1997) </li></ul>
  18. Legal Challenges to Noneconomic Damages Cap <ul><li>Wisconsin </li></ul><ul><ul><li>Yvette M. Maurin , et al. v. Gordon Hall, M.D. </li></ul></ul><ul><ul><li>Recently upheld cap on noneconomic damages in a unanimous decision </li></ul></ul><ul><ul><li>Awarded $3M in damages </li></ul></ul><ul><ul><li>Reduced to $100,000 via cap </li></ul></ul><ul><ul><li>Case filed before new cap went into effect – new cap is $500k for child, $350k for adult </li></ul></ul><ul><ul><li>Justice David Prosser – “the caps reflect the Legislature's intent to curtail huge malpractice damage awards and keep insurance costs down” </li></ul></ul>
  19. Legal Challenges to Noneconomic Damages Cap <ul><li>Nebraska Supreme Court – Gourley v. Nebraska Methodist Health System 663 N.W.2d 43 (Neb. 2003). </li></ul><ul><ul><li>Section 44-2825(1) – capped at $1.25M </li></ul></ul><ul><ul><li>The court held that the cap passed the special legislation charge because it was legitimate public policy </li></ul></ul><ul><ul><li>The court held that the cap passed the equal protection charge because it passed the rational basis test </li></ul></ul><ul><ul><li>Ruled it was constitutional (5-2) thus overturning the trial courts earlier decision </li></ul></ul>
  20. Legal Challenges to Noneconomic Damages Cap <ul><li>West Virginia had a $1M cap on damages (now has a $250,000 cap - $500k in some cases) </li></ul><ul><li>Has withstood two challenges to its constitutionality </li></ul><ul><li>However, support may be eroding </li></ul><ul><li>First time – West Virginia Supreme Court voted unanimously (1991) </li></ul><ul><li>Second time – 3-2 (Dec. 2000) </li></ul><ul><li>One of the judges who supported it is no longer on the court </li></ul><ul><li>Has Joint Liability and Collateral Source reform </li></ul>Source: AMNews, Feb. 5 th , 2001 - http://www.ama-assn.org/amednews/2001/02/05/prl20205.htm
  21. Legal Challenges to Non-economic Damages Cap <ul><li>Does federal government have the power to mandate a nationwide cap? </li></ul><ul><li>United States v. Lopez </li></ul><ul><li>United States v. Morrison </li></ul><ul><li>Substantive law of torts is an area of traditional state sovereignty </li></ul><ul><li>Even if Congress could, should they? </li></ul>
  22. Conclusion <ul><li>Caps on non-economic damages could help to slow the increases in malpractice premiums </li></ul><ul><li>This will make it easier for physicians to continue to practice and see patients </li></ul><ul><li>The approach does have some serious drawbacks </li></ul><ul><li>Alternatives are available but are generally unproven </li></ul><ul><li>“ We don’t have four or five years for demonstration studies” – Donald Palmisano </li></ul>

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