Updated August 23, 2020
Since the April 2010 Gulf oil spill, there have been discussions among the public and members of the United States government about the $75 million liability cap placed on oil companies for damages they cause due to deep water spills. Congress is now re-examining the cap on such damages and trying to retroactively remove them or raise the limit to $10 billion.
The arbitrary $75 million cap is an example of tort reform—an intentionally misleading term. It was invented as a strategy to engender public support for legal measures which, by their very nature, reduce the rights of the members of the public for the benefit of various business interests.
Since medical malpractice is categorized as tort, changes to tort law affect medical malpractice litigation.
Many states have various types of tort reform as they apply to medical malpractice, and several limit non-economic damages to an arbitrary cap. Non-economic damages include pain and suffering, grief, loss of companionship, and other such harms that are not easily calculable. However, these caps vary widely from state to state.
For instance, California and Ohio both share a $250,000 limit on non-economic damages, but Ohio’s cap also stipulates that the amount can be assessed at a value no more than three times the plaintiff’s economic damages. Florida and Massachusetts limit non-economic damages to $500,000, though Massachusetts law allows for some exceptions.
While some states have never placed caps on damages, such as Vermont, Tennessee, and Kentucky, caps have been declared unconstitutional and struck down in court in other states, such as Pennsylvania, Arizona, Wyoming, Alabama, and New Hampshire.
The basis upon which the amount of non-economic damage caps have been determined is usually arbitrary and inconsistent from state to state.
Indiana has capped medical malpractice damages since 1975. Initially it was $100,000 per occurrence for the doctor and $400,000 from the Indiana Patient’s Compensation Fund (PCF). Those caps were subsequently raised to $100,000 and $650,000 and finally increased to $250,000 for the doctor and $1 million from the PCF.
A simple consumer price index for inflation over that period shows that in order to obtain the same value as the $500,000 total set in 1975 at today’s value in dollars, it would require an increase of over $2 million of today’s dollars instead of $1.25 million. Further, to the extent the damages are intended to pay for future medical care, the amount should be increased even more since medical inflation is generally well over twice the rate of general consumer price inflation.
While healthcare costs continue to climb in an ever-increasing upward spiral and many injured patients’ lifelong medical care requirements will exceed the recoverable fair amount as determined by legislators, limiting patients’ ability to recover damages has become a popular political subject in Washington for fixing the healthcare system under the guise of tort reform.
When medical malpractice insurers are reporting profits in excess of 99% of Fortune 500 companies, perhaps reform efforts should be concentrated on reducing the number of preventable medical errors in the healthcare system, which injure and kill thousands of patients every year. In addition, analyzing business practices of malpractice insurers who enjoy record profitability year after year—despite claiming that there is a crisis in medical malpractice litigation requiring tort reform—is an area ripe for further congressional scrutiny.
Not surprisingly, doctor and patient premiums continue to climb ever-higher, despite the placement of malpractice caps in many states that are purportedly designed to lower insurance premiums.
As the government’s actions following the Gulf oil spill have brought the notion of tort reform back to the forefront, perhaps there can be some discussion of tort reform outside of the currently established paradigm in which medical malpractice litigation is characterized by politicians and insurance companies as a runaway problem that needs to be reformed. If we truly want to reform healthcare, we should look at why so many preventable errors are made in healthcare institutions and how we can reduce them and, by extension, reduce the necessity for malpractice litigation in the first place.
If you or a loved one have been a victim of medical malpractice, contact an Indianapolis Medical Malpractice Attorney from Wilson Kehoe Winingham. The lawyers at WKW can help you build your case and fight for the compensation you deserve. Call 317.920.6400 or fill out an online contact form for a free, no-obligation case evaluation.
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