Last year, I pointed out a victory for consumers in Wisconsin:
Wisconsin Going In The Right Direction On Auto Insurance, Mike Bryant | September 10, 2009 9:33 AM
Now with a new administration and leadership in Madison, it looks like it’s payback time to big business, the insurance companies, and most of all, those that cause harm to others. The changes included:
• Limits noneconomic damages to $750,000 in medical malpractice cases at nursing homes. That limit matches the one already in place for other types of medical malpractice cases.
• Limits punitive damages to $200,000 or double the amount of compensatory damages, whichever is higher.
• Raise the standards for qualifying people as experts when they testify.
Each of these new laws have their issues. Damage caps penalize those with the most damage and who have suffered the greatest harm. It doesn’t do a thing to prevent the mythical frivolous claims the proponents claim to be going after. It actually adds to the frivolous defenses and gives insurance companies reasons not to pay. It’s the equivalent of getting rid of holding in a football game by taking passing out of the game.
The expert change, is far less complicated than the proponents try to make it. Basically, they are making it harder to qualify experts. This becomes important in cases with newer issues. So faulty products can get away with the damage they do, by claiming that, "Gee how could we have known?" and since the plaintiffs expert would be dealing with a new issue, they can’t be qualified.
But each of these pale in comparison to the the damage to society with a cap on punitive damages. When you look at punitive damage cases, there really aren’t that many. Thing is, when they do get awarded, they are done so because a company did something real bad and we want to make sure they never do it again. Remember the Exxon Valdez? $200,000 penalty! That’s pocket change and they could give it to you in oily money. Why in the world would the legislature think it was a good idea to allow grossly negligent companies to now create a cost benefit analysis on how much damage they could do? It’s making murder a misdemeanor or a petty misdemeanor. Wisconsin native Jeffrey Dahmer would have loved that.
A founding partner with Bradshaw & Bryant, Mike Bryant has always fought to find justice for his clients—knowing that legal troubles, both personal injury and criminal, can be devastating for a family. Voted a Top 40 Personal Injury "Super Lawyer" multiple years, Mr. Bryant has also been voted one of the Top 100 Minnesota "Super Lawyers" four times.
12 Comments
Mohammad
I agree that caps aren't the way to go. Patients need compensation when something goes badly wrong. There does need to be a solution though for frivolous claims. Caps do their job in keeping too many claims in the system. They also bring down medical malpractice insurance premiums which helps keeps doctors in the state. (see http://www.equotemd.com/blog ). States with caps like TX hardly help the patient with caps so low. However no caps like in NY is a disaster for doctors. Caps aren't the answer but a doctor shortage isn't either. It will be interesting to see if the government really makes a push for new reform.
Mike Bryant
Minnesota says otherwise. Low claims, low premiums and great health care. The doctor shortage isn't because of claims, they actually make a lot of money off of the "defensive medicine". The blog that you linked seems to suggest that the shortage is because more people will be getting care. I do appreciate you reading and the comment.
Mohammad
You make a good point. Doctors DO make a lot of money off defensive medicine. It is an interesting question to ask, if there was strong tort reform, would physicians still practice defensively and drive up the costs. That would be an interesting study to read.
Mike Bryant
Since it would involve "strong tort reform", I hope to never see it. Thanks for the follow up comment.
Michael End
Mohammad,
There is really no relationship between caps and doctors' malpractice premiums nor is there a relationship between caps and the number of doctors practicing in a state. Minnesota has never had a cap on damages in medical malpractice cases yet has the lowest malpractice insurance premiums in the country according to the 2010 Annual Rate Survey conducted by Medical Liability Monitor. Obstetricians in Texas and California, the two model states for capping noneconomic damages at $250,000, pay as much as $124,962 (Texas) and $89,953 for premiums, compared to Minnesota's $16,449.
Interestingly, the premiums doctors pay does not seem to affect the number of doctors practicing in a state. According to the 2011 AMA publication, Physician Characteristics and Distribution in the U.S., the states with the highest number of practicing doctors per capita, in order, are District of Columbia, Massachusetts, Maryland, New York, Vermont, Connecticut, and Rhode Island. Check the insurance premiums paid by doctors in those states and you will see that malpractice premiums really have little to do with where a doctor chooses to practice.
As proof that caps do not affect so-called defensive medicine, look at Wisconsin, where I practice law. Doctors here have the third lowest malpractice premiums in the country for purchasing a $1 million/$3 million policy. The doctors also pay rather minimal assessments to Injured Patients and Families Compensation Fund, which pays any judgment or settlement in excess of the limits of the primary insurance coverage. There is currently more than $800 million in the Fund, more than has been paid out in its 35 years of existence. Thus, in Wisconsin no doctor ever has to pay a penny out of his or her pocket to an injured patient. Thus, there is no motivation in Wisconsin for a doctor to order an unnecessary test, since the doctor can never be personally liable for malpractice. Do you think that results in low health care costs in Wisconsin? We are among the most expensive states in the country for health care. I almost forgot to point out that in 2008 there were only 64 Wisconsin people who recovered compensation because of doctor negligence according to the National Practitioner Data Bank. That equates to only 3.7 doctors per every 1,000 practicing doctors having a payment made for him or her during the year. Any Wisconsin doctor who should claim that he or she is practicing defensive medicine is trying to pull your leg.
Mike Bryant
Thanks for the comment Micheal.
james O'Hare RPLU AIC AIS
wow - 750k is not large enough for a cap on nursing home cases? Is there such a number that is enough? These cases are about patients rights more than malpractice. Yes another sunrise for the resident is priceless but that is not an evaluation. People get discharged from nursing homes, usually when they die. It isnt always somebody's fault.
Mike - Are you actually complaining about raising the standards of those experts that testify?
Doctors have no motivation to order unneccesary tests??? What does that mean? Really?
Caps are not used to prevent defensive medicine. They are used because you can not measure nor weigh pain. It is an upper limit and not a starting point.
Isnt a policy limit a cap? you should argue for higher limits and target the other causes of action. i can measure all other C of A.
The high cost of health care is due to the high cost of health care and not defensive medicine. Competition is prevented by McCarron- Ferguson. Dump that and watch the prices plummett.
regards Jim
Mike Bryant
If a case is worth 750,000 it can be worth more. So either there is no fear and there is no reason for the cap or you are truly harming a person or family with horrific damages. Not a thing would have been done to stop a frivolous case, but a lot to insure frivolous defenses.
I think the Frye-Mack standard is much better and a lot fairer. Daubert is abused in courts across the country and has been used to throw out a lot of meritorious cases that should have gone to juries.
james O'Hare RPLU AIC AIS
Mike - I am curious about the word "worth". The measurement of value. What are you using to measure? I guess your answer would be a jury? What do they use to measure? My point is that you cant use anything objective( a ruler, scale, or cash)to measure something subjective. This is an upper limit protection, and probably beyond the insureds protected assets and policy limit.
Raters cant calculate infinity into their equations, but can work with a variable , like 750, to create meaningful data.
If 100 people evaluate a pain case, you would get 100 different answers. The lowest "worth" is equivalent to the "highest" worth. Which of the 100 is THE worth?
jim
Is an amputated finger worth $100 million dollars?
It sure is if it belongs to Eric Clapton.
Mike Bryant
You are confusing collection with value. Those are two separate things. Once you put a artificial cap on cases you have an amount that will never be paid until a jury goes over it. It is the institutionalization of a limit that there is no need for and it unfair to the person that it really hurts.
Your Eric Clapton example is an excellent one for why artificial caps don't work.
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