Can Damage Caps on Medical Malpractice Claims Reduce Healthcare Costs After ObamaCare?

Since the Affordable Care Act was enacted in 2010, millions of Americans have access to medical care that had previously been unavailable. With that many more patients entering the nation’s clinics, hospitals, and emergency rooms, it stands to reason that the opportunity for medical errors has increased dramatically. But are more statutory restrictions on the amount of malpractice damages necessary to help keep healthcare costs reasonable?

In 2015, at least six states saw renewed medical tort reform activity in some form. Four state legislatures—Indiana, Kansas, Missouri, and Nevada—introduced new legislation to either increase or otherwise reshape state damages caps laws. In Florida, the Fourth District Court of Appeals confirmed an earlier Florida Supreme Court decision striking down the state’s damage cap on malpractice claims. The Utah Supreme Court declared that state’s damages cap statute in violation of Article XVI, § 5 of the state’s constitution. And, on October 21, 2015, the Missouri Supreme Court heard arguments on a constitutional challenge to that state’s damages cap statute, which should be decided soon. As healthcare access continues to proliferate across the country, we should anticipate as much or more legislative and judicial action in the New Year.

While legislative efforts at medical tort reform may have some effect on rising healthcare costs, however, the costs to medical malpractice insurers remain substantial. Multi-million dollar indemnity payments are only one financial consideration affecting malpractice insurers. Even successful medical malpractice defenses take their financial toll when one considers the legal costs required to retain counsel, hire medical experts, and engage in complex discovery. As access to medical treatment continues to rise, even baseless malpractice claims can lead to increased healthcare costs. Without imposing caps so unreasonably low that an injured plaintiff has little incentive to vindicate her rights, however, these costs may be largely unavoidable.

For further information, we invite you to download the following Legal Insights White Papers:

When Good People Meet Bad Medicine: The Pre-Suit Anatomy & Physiology of a Medical Malpractice Claim

The Affordable Care Act: Mandated Benefits Compliance Standards