Laws that limit certain damage awards in malpractice cases are limiting insurance premiums, too.
A survey sponsored by the American Medical Association found that premiums for internal medicine physicians were 17.3% lower in states that cap noneconomic damages than in states that set no limit. The difference was even more pronounced for general surgeons, whose premiums were 20.7% lower.
Doctors in states with damage caps also had fewer paid claims against them, and those claims tended to result in smaller payouts. The Policy Research Perspective updates a similar project done two years ago and is available at the AMA’s Web site, www.ama-assn.org.
“Medical liability reforms do work,” observes William G. Plested III, MD, immediate AMA past president. “Premium levels have largely stabilized; however, they remain at the highest level in history.”
Economic damages include the cost of care and treatment, as well as the loss of actual and future earnings. Compensation is based on documented expenses. Noneconomic damages include pain, suffering, and loss of companionship.
Many states have set statutory caps on these damages, usually $250,000. The AMA supports these caps, while setting no limits on payments for economic damages.