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Economics Professor Explains Harm Caused By Medical Malpractice Caps

Those who have followed the medical malpractice “reform” debate over the past few years know that at the end of the day it seems that the disagreement is only about money. Both sides point fingers at others and claim that greed is at the root of the problem. Our Chicago medical malpractice lawyers have repeatedly explained on this blog that we believe virtually all so-called “reform” efforts are nothing more than money grabs by certain big interests seeking to avoid paying for the consequences of their actions. However, we realize that those on the other side just as quickly claim that medical malpractice attorneys are greedy as well and advocating against these efforts only for their own gain. Of course, it would be remiss not to point it is the tort reformers who want to make specific decisions about award amounts, while attorneys are simply advocating for preservation of allowing the jury to make these decisions-as has been the case since the Founders enshrined the right in the U.S. Constitution.

However, beyond the predictable name-calling, it is important to point out that the vast majority of non-lawyer experts who have evaluated the situation also raise significant concerns beyond mere money matters. As is so often forgotten, medical malpractice damage caps hurt patients across the board. This point was made last week in an editorial published in the Huffington Post by an economics professor. Beyond simply making it impossible for victims of terrible medical mistakes from receiving the redress they need, the caps would also reduce liability insurer’s financial incentive to reduce practice risk.

Most patients are unaware that many of the protections in place to prevent negligent medical behavior are put in place by the healthcare insurance industry via an oversight and incentive structure. The reason is simple: they want doctors to practice safely so that they are not sued and not required to pay out for the consequences of the error. However, a nationwide shift to cap medical malpractice damages removes that incentive and will likely result in more cases of neglect and inadequate care. This is an incredibly serious consequence of these caps that has been largely ignored.

The travesty of that worsening care is made even more disgraceful when one realizes that the calls for these changes are based almost exclusively on anecdotal observation, not systematic and reliable evidence. The average community member is often under the assumption that high jury awards are common, when in reality nearly ¾ of filed cases result in no award and the vast majority of others settle for much less than the headline grabbing jury amounts. In fact, most reliable studies estimate that ¾ of cases that go to trial are won by the defendant. In other words, the truth is much different from the public portrayal of the justice system as a mere money grab. The inaccurate portrayal of the legal system would be merely unfortunate if not for the fact that many critics are using the inaccuracies to push changes to the system. Those changes would do nothing more than hurt victims and weaken quality care incentives across the board. In that way, these inaccurate portrayals are much more than merely unfortunate but are actually downright dangerous.

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