Med Mal Update: Reasons for decrease in frequency and recent Illinois court decision to strike down damage caps

By Marc Lanzkowsky – February 5, 2010

In response to my post, medical malpractice report shows increased severity despite lower frequency, I received a number of LinkedIn comments that I felt offered an interesting perspective on this topic. I have included some of that discussion below.

Additionally below, I review the news that the Illinois Supreme Court has struck down that state’s damage caps. The overturning of limits on non-economic loss will most certainly have repercussions for anyone involved in malpractice claims.

Tort reform and high cost to bring medical malpractice actions are seen as main reasons for lower frequency

An interesting discussion on the LinkedIn Medical Professional Group discussion board developed in response to my post on the increase in severity, but decrease in frequency, in medical malpractice suits. Generally, many in the industry commented that the high cost to bring a medical malpractice actions has swayed the plaintiff’s bar to file fewer claims. With other types of cases easier to prosecute, and cheaper to file, plaintiff’s attorneys can get a higher return on their investment by taking on other types of claims. Michael Snyder, a medical malpractice defense attorney in California, noted that “the cap on general damages has not increased [in California] since MICRA was enacted in the seventies. At the same time the cost for both prosecuting and defending these cases increased, so that most plaintiff’s attorney  “will only take cases where there are substantial special damage.”

Pat Tazzara, Litigation Attorney in Washington D.C., has seen a shift in jury attitudes against plaintiff’s attorneys bringing actions. “Once the prevailing theme was hostility [and] skepticism towards health care providers generally. Now, the focus is much more on skepticism towards plaintiffs bringing a law suit [or] suing their doctor.” Pat also feels that there there is a “shift in societal attitudes about those who sue.” This statement was also echoed by malpractice insurance expert, Peter Reilly, who added that “the plaintiff’s bar is wiser about what action it will bring against a medical provider.”

Consulting Actuary, Christopher Tait, points to Tort Reform in Pennsylvania as a main reason for lower frequency and severity. Pennsylvania adopted a Certificate of Merit procedure requiring plaintiff’s attorneys to secure a written statement of malpractice from a qualified expert prior to bringing suit. In addition, the state eliminated “venue shopping” which decreased the number of claims being brought in “bad” forums such a Philadelphia. Again, this created a value proposition for the plaintiff who had to ask themselves if it is worth having to spend money to bring an action where verdicts could be lower.

The costs to defend these claims is also rising as was again made clear in the Ohio Insurance Department’s annual report Medical Professional Liability Closed Claim Report. In this study it was shown that the average defense costs almost doubled from 2005 to 2008 from $24,443 to $42,249. Bottom line: These are expensive cases for everyone and costs for bringing or defending these claims continue to rise. Clearly, this is having some impact on the plaintiff’s bar.

Illinois strikes down damage caps on Medical Malpractice claims

In upholding a Cook County decision from 2007, the Illinois high court ruled that limits on pain and suffering and non-economic damages are unconstitutional. Based upon the State Constitution’s separation of powers clause, the judges struck the caps by holding that lawmakers were interfering the rights of juries to determine damages. (see ruling in Lebron, a Minor v. Gottlieb Memorial Hospital)

The Illinois Hospital Association said it best in their statement:

The hospital community is deeply concerned that this decision will renew the malpractice lawsuit crisis and make it more difficult for Illinoisans to access or afford health care as liability costs for physicians and hospitals are driven to unsustainable levels. Hospitals across the state will again face even greater challenges recruiting and retaining physicians, especially specialists such as neurosurgeons and obstetricians, who were leaving Illinois during the height of the crisis.

The Illinois Supreme Court has faced this decision before and has struck down similar laws in both 1976 and 1997.  Whether the legislature will try again is unknown at this time.

What do you think? Join in the conversation. Post your comments, questions, observations, thoughts, suggestions, musings, ideas for future topics, or other feedback. Or email me directly.