Ok, so today I will be much shorter, and start right up with our findings. I ended my last post with a bunch of points, including our estimation that the Texas cap will reduce payouts in tried cases by 27%, and settled cases by 18% (assuming no change in the volume and mix of cases). In dollar terms, that corresponds to a reduction of $60M in payouts for tried cases, and $780M in settled cases. (For reasons that the paper outlines, these figures are in 1988$ -- to get to 2008$, multiply by 1.83 – and you get $110M, and $1.47B.
Whose hide do those savings come out of? Predictably enough, it is claimants with non-economic damages that exceed the cap – and the greater the percentage of one’s award that is non-economic and above the cap, the larger the impact. Payouts in tried cases are larger than in settled cases, and size does matter: 47% of the tried cases (and 18% of the settled cases) have paid non-economic damages that exceed the cap.
Who has paid non-economic damages that exceed the cap? We have demographic information on age, employment status, and whether the plaintiff is deceased or not. The following table shows how payout is affected, in the tried and settled cases, for various groups defined by these categories.
The table shows that some types of cases (death cases, cases in which the plaintiff is unemployed, and cases in which the plaintiff is elderly) had higher aggregate and per-claim reductions in payout. The reduction is larger in tried cases than in settled cases – which makes sense, since as noted above, the payouts in settled cases are smaller. This means that fewer cases are over the cap, and those that are have a smaller “haircut” from the cap. The differences are statistically significant for per-case mean reductions in tried cases, comparing death with non-death (23% v. 12%), and unemployed with employed (19% v. 11%) – but not for elderly v. adult-non-elderly (19% v. 14%).
The next table provides a finer breakdown for adult, non-elderly plaintiffs.
There is a striking gap between the 53% aggregate reduction in payout for unemployed deceased plaintiffs, versus 17% for employed deceased plaintiffs or 15% for employed non-deceased plaintiffs. The gap for unemployed non-deceased plaintiffs v. employed non-deceased plaintiffs is more modest (24% v. 15%). Within the death and non-death groups, the per-case mean differences are not significant -- perhaps due to small sample size, but they become so in the last comparison, between unemployed deceased plaintiffs and employed non-deceased plaintiffs (31% v. 9%).
To summarize, the Texas cap hits hardest those with large non-economic damage awards – and those plaintiffs are disproportionately likely to be deceased, unemployed, and perhaps elderly.
My next post will address how “tweaking” cap design affects the impact. Stated differently, it will address which of the 31 states has the most severe and least severe cap -- and how a $250k flat cap compares to a $1.75M total damages cap in terms of its impact on payouts.
Related Posts (on one page):
- Damage Caps and Medical Malpractice VII
- Damage Caps and Medical Malpractice Litigation: VI
- Damage Caps and Medical Malpractice Litigation: V
- Damage Caps and Medical Malpractice Litigation: IV
- Damage Caps and Medical Malpractice Litigation: III
- Damage Caps and Medical Malpractice Litigation: II
- Damage Caps and Medical Malpractice Litigation
My daughter's due date is effectively being decided by lawyers - the OB's won't go beyond a certain date for fear of lawsuits, not for medical reasons!
I suppose this study was worthwhile conducting, as it would have been very surprising if it had happened to find otherwise.
As the recently retired Associate Director for Research and Disputes of the National Practitioner Data Bank, I know of many instances of physicians with multiple malpractice payments but no action by State Medial Boards to restrict or revoke their licenses. The NPDB data also show that a very small percentage of physicians are responsible for the majority of all the money paid out for malpractice. If the Boards took action against these physicians, malpractice payments would be reduced because there would be less malpractice. Both the vast majority of good physicians and the public should demand strong action by the Medical Boards rather than lowering compensation to injured patients.
The case would revolve around whether the treatment provided comports with the medical standard of the area where the treatment is rendered. So your daughter's doctor, in determining a due date "deadline", is simply taking into account the opinions of many doctors who have won in lawsuits, i.e. whose opinions have taken the day over other doctors whose opinions have been deemed to be wrong.
Maybe this results in a more conservative kind of medicine, but wouldn't you rahter an oversafe doctor, rather than one open to experiment?
If I'm right, then uncapping non-economic damage awards would be yet another bait-and-switch social program, sold as a protection for the poor and weak and then feasted on by the comfortably-off.
It turns out that the factors which sway juries are not identical to the factors which improve patient care. The factors which improve a physician's malpractice risk are not the same ones which improve patients' risk.
People (particularly juries) are likely to think that a nonindicated blood test is harmless, and that it's great if doctors order them "just in case". But a nontrivial fraction of tests are abnormal even in healthy individuals. Ordering defensive tests may result in a great deal of patient harm, even though they sound "conservative".
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