Cato Institute Slams Caps on Medical Malpractice Damages

side note: I find this article interesting for two reasons: 1. Caps on non-economic damages have proven to reduce medical malpractice insurance premiums in states that have them and a federal cap 0n non-economic damages has long been championed as the solution to skyrocketing healthcare costs by the Republican Party; 2. Applying a one-size-fits-all federal cap on non-economic damages is antithetical to the libertarian leanings of today’s GOP and violates the 10th Amendment to the U.S. Constitution that gives individual states the right to regulate those actions not specifically enumerated to the federal government by the U.S. Constitution. In other words, this plank in the Republican Party’s platform is in direct conflict with the party’s philosophic underpinnings.

Posted by Andrew Cochran – October 20, 2011 7:47 PM
Brace yourself: Here’s a study by the most respected libertarian think tank in Washington, declaring that capping medical malpractice damages is a very bad idea for consumers, and further declaring that awards in medmal lawsuits aren’t excessive compared to actual damages. This study will rock the AMA’s world, even as it continues to press Congress for special protection through an unconstitutional limit on awards in all health care-related cases. The study wasn’t conducted by the trial lawyers or a bunch of liberals, but by an academic for the Cato Institute, which has lots of fans among the new House Republican majority and among the GOP Senate minority.

Read it yourself and send it to your favorite tort reform proponents. Here are selections from the Executive Summary:

Supporters of capping court awards for medical malpractice argue that caps will make health care more affordable. It may not be that simple. First, caps on awards may result in some patients not receiving adequate compensation for injuries they suffer as a result of physician negligence. Second, because caps limit physician liability, they can also mute incentives for physicians to reduce the risk of negligent injuries…

This paper reviews an existing body of work that shows that medical malpractice awards do track actual damages. Furthermore, this paper provides evidence that medical malpractice insurance carriers use various tools to reduce the risk of patient injury, including experience rating of physicians’ malpractice premiums. High-risk physicians face higher malpractice insurance premiums than their less-risky peers…

In particular, caps on damages would reduce physicians’ and carriers’ incentives to keep track of and reduce practice risk. Laws that shield government-employed physicians from malpractice liability eliminate insurance company oversight of physicians working for government agencies…

There’s even more in the body of the study, such as:

continue reading

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