A recent study from the consumer advocacy group, Public Citizen, dispels the widespread and pervasive myth that capping damages in medical malpractice cases reduces healthcare costs and insurance premiums. In reaching this conclusion, Public Citizen analyzed how Texas’ cap on noneconomic damages in medical malpractice cases has affected physicians’ and other healthcare providers’ practice habits, and the cap’s affect on insurance costs.
In 2003, Texas instituted a $250,000.00 cap on noneconomic damages in medical negligence cases. (Simply stated, “noneconomic damages” means awards for physical pain and suffering, disfigurement, and mental anguish.) Politicians in Texas enacted that cap, because they believed “that the fear of litigation motivates doctors to prescribe unnecessary tests and procedures to insulate themselves against potential lawsuits.”
Although the number of medical malpractice cases filed in Texas has dropped since the damages cap became law, the legislation has not reduced healthcare costs. For example, in Texas, Medicare spending for diagnostic tests has increased approximately 25% faster than the national average. Likewise, Medicare spending for provider-prescribed tests and procedures has increased approximately 40% faster than the national average. Similarly, the damages cap has not reduced health insurance premiums. For example, since Texas enacted the medical malpractice damages cap, family health insurance premiums have increased approximately 13% faster than the national average.
One Republican presidential candidate (ahem, Rick Perry) has claimed that the damages cap resulted in more physicians moving to Texas to practice. However, Public Citizen’s recent study debunks that theory. The report’s authors stated, “The number of doctors practicing in rural areas increased 23.9 percent in the seven years before the caps were implemented.” However, “Since then, their ranks have deceased by about 1 percent.” Public Citizen attributed any increase in the number of physicians practicing in Texas to that state’s overall population growth, not the draconian tort reform measures passed in 2003.
Public Citizen’s recent report is more evidence that anti-justice advocates, including insurance companies, hospital systems, and the American Medical Association, have only one motive – making more money. Draconian measures, like Texas’ arbitrary medical malpractice damages cap, do improve patient care, increase efficiency, or reduce costs. Instead, they shield negligent healthcare providers from bearing responsibility for their errors, and restrict the average American’s right to have a jury of their peers hear and decide their case.
Read Public Citizen’s entire report here: http://www.citizen.org/documents/a-failed-experiment-report.pdf