Exorbitant pain and suffering awards in medical malpractice lawsuits, also known as non-economic damages, have been blamed for numerous evils, including high physician insurance premiums in some states and increases in health care costs due to “defensive medicine” practices. But a new report from the not-for-profit watchdog group, Public Citizen, challenges this concept.

In an effort to curtail costly malpractice suits, many states have passed laws capping damages for non-economic injury, using the rationale that caps would decrease litigation, thereby decreasing insurance rates for physicians and creating incentives for them to practice in a given state.

Cap proponents argued that health care would become less expensive and more accessible, and clinicians would order fewer unnecessary tests as legal fears diminished and they no longer felt the need to practice defensive medicine.

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But this has not happened, according to Public Citizen’s new report, “A Failed Experiment,” which aimed to examine the effect of malpractice caps in Texas. The group argues that health care in Texas has worsened since 2003, when Governor Rick Perry signed a $250,000 cap on non-economic damages able to be awarded in medical malpractice cases.

Specifically, the report states:

  • Medicare spending has risen far more quickly in Texas than the national average, debunking the theory that medical malpractice lawsuits are driving health care costs
  • Premiums for health insurance have also risen faster than the national average
  • Texas has the largest uninsured population in the United States
  • Clinician numbers have dwindled in Texas; the number of primary care clinicians remained flat, compared with years prior to the litigation caps
  • The number of rural clinicians practicing in the state has declined

The two groups benefitting the most from caps seem to be medical malpractice insurance companies, which have dropped premiums by 50%, and clinicians, whose malpractice payments were 64% less in 2010 than 2003, the report indicated. Yet these savings have not translated into benefits for average Texans.

Damage cap proponents, including Gov. Perry, have defended the caps, arguing that premiums for employer-sponsored coverage have risen more slowly than the national average, and that the growth of physicians has outpaced population growth.