California Medical Malpractice Caps Shot Down by Voters

This past election day, California voters rejected Proposition 46, an initiative which would have imposed mandatory drug tests on doctors and increased medical malpractice settlements. Proponents argued that Proposition 46 would protect the public; according to opponents, however, the reform would only benefit trial lawyers. Voters rejected the proposal 3:1.

Proposed CA medical malpractice caps changes

The proposed California medical malpractice caps reform was promoted by Santa Monica-based Consumer Watchdog, a non-profit focused on the rights of taxpayers and consumers. Some of the changes it would have made include:

• Medical Malpractice Caps – In 1975, California enacted a cap on damages in medical malpractice cases. The law – the Medical Injury Compensation Reform Act (MICRA) – limited a plaintiff to an award of $250,000 for non-economic damages (like pain and suffering or disfigurement, where there is not a set value assigned) but did not apply to economic damages (like medical expenses and lost wages). Proposition 46 would have raised the cap to $1,000,000.
• Prescription Drug Database – California’s Department of Justice administers a database and requires pharmacists to report information about certain types of prescriptions in order to prevent patient drug abuse. The proposed change would have also required doctors to register with the system to prevent them from over-prescribing reportable medications to patients with drug problems.
• Drug and Alcohol Testing for Doctors – If adopted, the law would have required hospitals to conduct random drug and alcohol testing on the doctors affiliated with the hospital. It would also require substance abuse testing after “adverse events” such as mistakes during surgery, and refusal could result in the doctor’s suspension.

Supporters believed that the legislation changes would protect the patients from preventable medical mistakes and over-prescription of drugs. They also argued that raising the CA medical malpractice damage cap would bring it in line with most other states that have such a cap. Critics, however, argued that the legislation was not truly intended to benefit the public but to allow trial lawyers to collect from larger judgments. They suggested that it would also raise the cost of medical malpractice insurance, which would, in turn, raise the cost of health care.

Medical malpractice damage caps

Over half of U.S. states have enacted damage caps for medical malpractice lawsuits. Most of the damage cap laws limit the non-economic portion of the damages. Groups in favor of damage caps believe that they act to keep medical providers’ insurance premiums in check and prevent unnecessary testing and treatment simply to avoid a malpractice suit, leading to a reduction in the cost of healthcare. Those who oppose the limits argue that the laws unfairly restrict the compensation of injured parties while having little actual effect on healthcare costs.

In the midst of such controversy over the effect of damage caps, several studies have attempted to find out whether they actually have the intended effects – with mixed results. For example, in a 2007 study published in the Milbank Quarterly, a peer-reviewed healthcare journal, it was shown that damage caps can reduce medical liability insurance premiums but there is no clear evidence as to whether this affects overall medical care costs, the prevalence of defensive medicine, or where physicians choose to practice. The overall message of the study was that legislators should consider the limited empirical evidence of benefits of tort reform before limiting the recovery of those injured by medical malpractice.