Research continues to prove that medical liability reforms work

Feb 6 2008

New research on medical liability reforms continues to show that caps on non-economic damages are effective, lowering medical liability premiums, resulting in an increased supply of physicians to care for patients.

A new analysis of independent research summarized by the American Medical Association (AMA) provides an update on the positive impact of caps on non-economic damages on the broken medical liability system.

In states without reforms, many physicians are forced to make difficult practice decisions to limit the care they provide simply because they can't afford to pay sky-high medical liability premiums driven-up by escalating jury awards. Regardless of the case's merit, runaway jury awards for non-economic damages can reach millions of dollars, driving up premiums and putting access to care at risk for patients. The AMA supports caps on the non-economic damages of jury awards, and unlimited payments for economic damages, to help stabilize the broken system for patients and physicians while preserving patient access to the judicial system.

"For many patients, access to care is put in jeopardy because premiums for many physician specialties remain at or near all-time highs," said AMA Immediate-Past President William G. Plested III, MD. "Premium rates have largely stabilized, however they remain at the highest levels in history. For example, liability premiums for obstetrician-gynecologists in New Jersey have more than doubled since 2000 to $171,000, forcing many physicians to stop delivering babies."

The AMA's current review of recent literature, "The Impact of Liability Pressure and Caps on Damages on the Healthcare Market: An Update of Recent Literature" (PDF, 78KB), summarizes the most recent research on the impact of medical liability reforms. Research shows that caps on non-economic damages are associated with lower premium levels of at least 17 percent, depending on the specialty. Research also shows that placing a quarter-million dollar cap on non-economic damages in states that don't have effective reforms could result in premium savings of $1.4 billion nationwide.

"Medical liability reforms do work," said Dr. Plested. "After placing a cap on non-economic damages more than three decades ago, the medical liability climate in California remains stable with premiums in check. In 2003, Texas enacted reforms and now patients benefit from an increase of physicians."

Caps on non-economic damages are also associated with increased physician supply, particularly in rural counties, resulting in more physicians to care for patients. Research shows that the number of physicians in high-risk specialties, such as obstetrics and gynecology, is four to seven percent higher in states with caps.

"Medical liability reform remains a top priority for the AMA, and the thousands of physicians who have had to curtail their practices because they have been negatively impacted by the broken liability system. The fight for reforms is now largely in the states, and the AMA will continue to aggressively advocate so that no patient is prevented from being treated by a physician because of the broken liability system," said Dr. Plested.