Medical Malpractice Damage Caps in California Had Unintended Consequence of Increasing Adverse Events: Study

As California seeks to pass new legislation that would increase the amount victims can recover for pain and suffering in medical malpractice lawsuits, a new study shows prior damage caps imposed by the state have had an intended consequence of actually increasing adverse events and problems associated with medical negligence.

In findings published this month by the UCLA Center for Research Health Policy, California’s 1975 adoption of pain and suffering damage caps in malpractice lawsuits has resulted in a lack of deterrence for doctors.

Pain and suffering damages include both the physical and emotional injuries suffered by a victim that are part of compensation paid for non-economic damages in a lawsuit. Pain and suffering encompasses everything that is not an actual financial loss as a result of the accident, such as discomfort, inconvenience, inability to perform activities prior to the accident, and alike impacts.

For decades, proponents of medical malpractice damage caps have argued that limits on non-economic damages help control insurance premiums and prevent doctors from leaving the state. However, those who oppose the caps have indicated that removing the cap in cases of gross medical negligence will help ensure that doctors maintain high standards of care.

According to new research led by Jack Needleman, of UCLA Fielding School of Public Health, setting damage caps for pain and suffering reduces the incentive to avoid malpractice, thus weakening the standard of care and results in an increased rate of malpractice lawsuits. Furthermore, the study states an increased rate of malpractice claims ultimately raises the potential cost to patients and insurers, along with noneconomic losses suffered by victims.

“The best available research suggests imposing caps is associated with a 16% increase in adverse events, and several approaches to applying this to California data are suggested or implemented”, said Needlemen. The author also indicates that the preset cap on pain and suffering is decreasing in value, since it has not even been adjusted to reflect inflation.

Needlemen indicates California’s $250,000 cap on non-economic damages in a medical malpractice claim that was adopted in 1975 would be the equivalent of a cap of about $1.257 million today, if basing the rate of adjustment off of the Consumer Price Index. The study also examines the ratio of California’s current cap based on household income, indicating if adjusted to maintain the ratio of value to household income, the current value would be worth $1.5 million.

The study was published amid a landmark agreement made by the California Legislature last week, in which the Assembly voted 60-0 to send a bill increasing the amount of money Californians could win for pain and suffering in medical malpractice lawsuits.

For the first time in 47 years, if enacted, the bill would raise the medical malpractice pain and suffering cap from $250,000 to $350,000 for those who have been injured, and would raise the cap to $500,000 for the relative of those who died due to medical malpractice.

The bill would gradually increase those amounts for injured or surviving family members over the next decade until it reaches $750,000 for injured victims and $1 million for the deceased. Once these cap limits are reached, the limits would be set to increase 2% annually.