High malpractice damages linked to doctor diaspora

BATON ROUGE, La. – Victims of medical malpractice may soon have limited options when it comes to being compensated for their physician’s negligence, as legislators look cut down on lawsuit risk.

SB 61, which has been assigned to the Senate Judiciary Committee, would give the legislature power to limit the amount of damages and losses for medical or health care providers as a result of malpractice.

Proponents of tort reform state that increases in damages awarded in medical liability cases restricts patient care, since doctors go out of business or move to states with more favorable medical malpractice systems, thus limiting the supply of doctors.

They also claim doctors limit high risk procedures, since they would make them vulnerable to malpractice claims.

Towers Watson, a human resources consulting firm, claimed in 2005 that the cost of medical malpractice litigation in the United States has steadily increased at nearly 12 percent per year since 1975.

Additionally, the American Medical Association claims that 60 percent of liability claims against doctors are dropped, withdrawn, or dismissed without payment. But in 2008 each of these cases still cost an average of $22,000.

Of cases that do go to trial, courts rule physicians not negligent in over 90 percent of cases. Yet more than $110,000 is spent on legal defense per case.

However, Uwe E. Reinhardt, professor of political economy at Princeton, claims that many studies on the costs of malpractice omit the benefits, such as compensation for injured patients and impetus for improvements in medical technology.

Texas enacted medical liability reform in 2003, causing a mass migration of doctors to the Lone Star State. According to the Texas Medical Board, “Medical license applications jumped 58% from 2,561 in 2003 to 4,041, an unprecedented number.”

Additionally, the Texas Insurance Department has seen a 25 percent drop in medical liability insurance rates since 2003. Malpractice claims fell by 60 percent from 2003 to 2007, and payments per claim fell by one-third.


Robert Ross is a researcher and social media strategist with the Pelican Institute for Public Policy. He can be contacted at rross@pelicanpolicy.org, and you can follow him on twitter.