The Connection Between Medical Malpractice Caps and Medical Harm

We write often about the misguided, unfair movement to cap the amount of money plaintiffs in medical malpractice cases are allowed to receive. We’ve often detailed how these efforts, backed by the medical and insurance industries and conservative lawmakers who claim that they impair the efficient delivery of quality care, in fact do not result in the benefits their supporters pretend they will.

Now, a couple of studies from last year explained in The National Law Review show how such damage caps potentially can cause additional harm to patients, not to mention the health-care industry.

The authors reviewed five U.S. states that have malpractice caps imposed under the description of “tort reform,” as well as their records on what is known as Patient Safety Indicators (PSIs). Using various data, “Do Doctors Practice Defensive Medicine, Revisited” (a Northwestern University Law & Economics Research Paper from October 2014), showed a rise in the rate of PSIs after caps were implemented, and subsequently found “consistently gradual relaxation of care or failure to reinforce care standards over time.”

They also determined that this decline was widespread, that it applied to care that’s more likely to lead to a malpractice suit (for example, “never events” such as leaving an unintended piece of medical equipment inside a surgical patient’s body, operating on the wrong side, etc.), as well as care that’s less likely to cause legal action, such as a central line bloodstream infection.

In addition, the authors found evidence “that reduced risk of med[ical] mal[practice] litigation, due to state adoption of damage caps, leads to higher rates of preventable adverse patient safety events in hospitals.”

So … implementing these damage caps leads health-care facilities to relax their care standards, which leads to an increase of otherwise preventable incidents, which leads to … more malpractice suits.

Good idea, huh?

A study earlier last year, “The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform” (Northwestern University Law & Economics Research Paper No. 13-09, July 2014), suggested that physicians might practice riskier medicine in states that have caps. “For example,” according to The Review, “the physician might perform ‘high-risk services or procedures’ that would be otherwise avoided in noncapped states, or in states with common laws where an uncapped tort system would provide further deterrence from such riskier procedures.”

Here we go again: As the authors wrote, “damage caps have long been seen by health policy researchers and policymakers as a way to control health-care costs: We find, in contrast, no evidence that adoption of damage caps or other changes in med[ical] mal[practice] risk will reduce health-care spending.”

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