August 2, 2012
The Missouri Supreme Court's recent decision striking down a law capping damages for medical malpractice injuries because it violated the state constitutional right to trial by jury highlights ironies and inconsistencies in the views of conservative supporters of so-called "tort reform." Damage caps are a key feature in the playbook of corporate-funded tort reform organizations such as ALEC, the American Legislative Exchange Council, but they do little to address the problems their supporters claim they can solve: rising health care costs and shortages of doctors. Also, because caps restrict the historical role of juries as established by the federal and state constitutions, their popularity with many conservatives illustrates the selective and outcome-oriented nature of much conservative "originalism."
In its decision, Watts v. Cox Medical Centers, et al., the Missouri Supreme Court struck down a controversial 2005 state law that limited non-economic damages in medical malpractice cases to $350,000. Naython Watts was born with "catastrophic brain injuries" which a jury found were a result of malpractice by the doctors treating his mother during her pregnancy. The jury also found that Naython had suffered $1.45 million in noneconomic damages, which, under the damage caps law, were reduced to the statutory limit of $350,000. His mother challenged the law on his behalf, arguing that it violated the Missouri constitution, which provides that "the right of trial by jury as heretofore enjoyed shall remain inviolate." A majority of the Missouri Supreme Court, based its reading of the historical role of Missouri juries dating back to the adoption of the state constitution in 1820, agreed.
Medical malpractice is a serious problem. As Sanjay Gupta, the associate chief of neurosurgery at Grady Memorial Hospital, (and chief medical correspondent for CNN), noted in a July 31 New York Times op-ed:
According to a 1999 report by the Institute of Medicine, as many as 98,000 Americans were dying every year because of medical mistakes. Today, exact figures are hard to come by...[b]ut a reasonable estimate is that medical mistakes now kill around 200,000 Americans every year. That would make them one of the leading causes of death in the United States. [The New York Times, 7/31/12]
By reducing incentives for quality care, damage caps threaten to make the malpractice problem worse. As economist Shirley Svorny, an adjunct scholar at the Cato Institute, has written, "[m]uch of the protection consumers have against irresponsible and negligent behavior on the part of health care providers hinges on oversight and incentives created by the medical professional liability insurance industry." By limiting damages, caps reduce the incentives insurers have to engage in costly and time consuming oversight of physician behavior. Thus, according to Svorny, damage caps can "result in more cases of negligence and substandard care."
Damage caps have proven ineffective in reducing health care costs. Dr. Atul Gawande's New Yorker article examining highest-in-the-nation heath care costs in McAllen, Texas found that although damage caps adopted in that state greatly reduced medical malpractice lawsuits, health care costs continued to rise sharply. In addition, a 2009 study from Americans for Insurance Reform found that Missouri's longstanding damages cap (the state has capped damages since the mid-1980s, with the 2005 law at issue in the Watts decision merely being the latest version) failed to keep the state's medical malpractice insurance premium costs from exceeding that of neighboring Iowa, which has no cap on damages.
The Americans for Insurance Reform report criticized some state insurance regulators for approving rates based on data from the Insurance Services Office, an “industry-controlled, for-profit company." The practice can dampen competition, according to the group.
For a copy of the complete article, contact AIR.