Medical Malpractice Caps Proposed by Bush

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JAN HOPKINS – Anchor: President Bush is proposing limits to the amount of money patients can win in medical malpractice lawsuits. California passed a similar measure years ago to help these rising malpractice insurance costs. Casey Wian looks at whether it’s worked.


CASEY WIAN – Reporter (voice-over): From buying a house to driving a car, it’s more expensive to do most things in California. But practicing medicine here is a bargain because unlike in many states, medical malpractice insurance rates adjusted for inflation are lower than they were 25 years ago.

In 1976 California faced a malpractice insurance crisis of its own, with high premiums forcing doctors out of business. Doctors blamed frivolous lawsuits and big jury awards for pain and suffering.

ALAN MILLER, CHMN., UNIVERSAL HEALTH SERVICES: If you can get a jury to be sympathetic to the individual and then you can get a paint the case as a large institution, insurance company against the institution with a good lawyer who makes a good story, it’s break the bank.

WIAN: So California capped noneconomic malpractice awards at $250,000. Damages for lost wages or increased medical costs remained unlimited. Now the typical surgeon in Los Angeles County pays about $37,000 a year in malpractice premiums compared to 88,000 in Wayne County, Michigan and 174,000 in Dade County, Florida.

DR. JACK LEVIN, CEO, CALIF. MEDICAL ASSN.: It has worked better than any tort reform legislation, anywhere in the country. People who are injured get compensated fairly. But it’s kept premiums down so that doctors can still be in practice and community clinics and public, particularly the safety net, doesn’t go bankrupt.

WIAN: Trial lawyers and consumer advocates are fighting the Bush administration’s proposed cap on noneconomic damage awards nationwide. They’ve seized on the recent case of Linda McDougal who was misdiagnosed with breast cancer and underwent a double mastectomy as an example of why $250,000 is not enough for pain suffering. They also credit stricter regulation of the insurance industry, not the cap on malpractice awards for California’s lower premiums.

JAMIE COURT, FOUNDATION FOR TAXPAYER & CONSUMER RIGHTS: It’s not frivolous lawsuits that are driving this crisis. It’s frivolous business practices by unregulated insurance companies and if we had better regulation, we’d take care of this problem.


WIAN: Democrats are expected to counter the White House with proposals for more insurance industry regulation. Also they’re proposing or expected to propose a national malpractice insurance program that would offer a plan similar to the way flood insurance now operates and also are expected to propose premium rebates for doctors — Jan.

HOPKINS: But as you were reporting, Casey, the way that it works in California seems to be working.

WIAN: Absolutely. It’s just a matter of which reform measure you give credit to, the trial lawyers and the consumer advocates say it’s tighter regulation of the insurance industry. The doctors say that it’s capping those damage awards.

HOPKINS: Casey Wian in California. Thank you.

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