Are damages caps regressive? A study of malpractice jury verdicts in California

Health Affairs

Volumn 23, Issue 4, 2004, Pages 54-67

  Studdert, David M ^a   Yang, Y Tony ^b   Mello, Michelle M ^b  

^a HARVARD SCHOOL OF PUBLIC HEALTH   (United States)

^b Department of Health Policy and Law ^*

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COST; COURT; EMOTION; HUMAN; INSURANCE; LAW SUIT; MALPRACTICE; MEDICAL ERROR; MEDICAL LIABILITY; PHYSICIAN;

ADOLESCENT; ADULT; AGED; CALIFORNIA; CHILD; CHILD, PRESCHOOL; FEMALE; HUMANS; INFANT; LIABILITY, LEGAL; MALE; MALPRACTICE; MIDDLE AGED;

EID: 3242702457     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.23.4.54     Document Type: Article

References (51)

1. U.S. General Accounting Office, Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates, Pub. no. GAO-03-702 (Washington: GAO, 2003); and M.M. Mello, D.M. Studdert, and T.A. Brennan, "The New Medical Malpractice Crisis," New England Journal of Medicine 348, no. 23 (2003): 2281-2284.
2. U.S. General Accounting Office, Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates, Pub. no. GAO-03-702 (Washington: GAO, 2003); and M.M. Mello, D.M. Studdert, and T.A. Brennan, "The New Medical Malpractice Crisis," New England Journal of Medicine 348, no. 23 (2003): 2281-2284.
3. R.A. Oppel, "Bush Enters the Fray over Malpractice," New York Times, 17 January 2003; and D.J. Palmisano, "Will Your Physician Be There? The Medical Liability Crisis in America," Address at National Press Club, 9 July 2003, www.ama-assn.org/ama/pub/article/1752-7863.html (11 August 2003).
4. R.A. Oppel, "Bush Enters the Fray over Malpractice," New York Times, 17 January 2003; and D.J. Palmisano, "Will Your Physician Be There? The Medical Liability Crisis in America," Address at National Press Club, 9 July 2003, www.ama-assn.org/ama/pub/article/1752-7863.html (11 August 2003).
5. W. Washington, "Lawyers Back Candidates, Lobbyists to Prevent Malpractice Award Cap," Boston Globe, 19 July 2003; L.V. Boyle, "Are Malpractice Damage Caps Unfair to Patients?" Physician's Weekly, 18 March 2002, www.physweekly.com/pc.asp?issueid=12&questionid=12 (2 April 2003); and "Statement of Senator Edward M. Kennedy in Opposition to the Medical Malpractice Amendment," 26 July 2002, www.senate .gov/~kennedy/statements/ 02/07/2002730306.html (13 May 2004).
6. W. Washington, "Lawyers Back Candidates, Lobbyists to Prevent Malpractice Award Cap," Boston Globe, 19 July 2003; L.V. Boyle, "Are Malpractice Damage Caps Unfair to Patients?" Physician's Weekly, 18 March 2002, www.physweekly.com/pc.asp?issueid=12&questionid=12 (2 April 2003); and "Statement of Senator Edward M. Kennedy in Opposition to the Medical Malpractice Amendment," 26 July 2002, www.senate .gov/~kennedy/statements/ 02/07/2002730306.html (13 May 2004).
7. W. Washington, "Lawyers Back Candidates, Lobbyists to Prevent Malpractice Award Cap," Boston Globe, 19 July 2003; L.V. Boyle, "Are Malpractice Damage Caps Unfair to Patients?" Physician's Weekly, 18 March 2002, www.physweekly.com/pc.asp?issueid=12&questionid=12 (2 April 2003); and "Statement of Senator Edward M. Kennedy in Opposition to the Medical Malpractice Amendment," 26 July 2002, www.senate .gov/~kennedy/statements/ 02/07/2002730306.html (13 May 2004).
8. Harvey Rosenfield, Foundation for Taxpayer and Consumer Rights, testimony before the House Energy and Commerce Committee (Pennsylvania), 10 February 2003, www.consumerwatchdog.org/healthcare/rp/rp003105.pdf (13 May 2004); M.J. Mehlman, "Resolving the Medical Malpractice Crisis: Fairness Considerations," June 2003, medliabilitypa.org/research/mehlman0603/ (14 August 2003); and T. Koenig and M. Rustad, "His and Her Tort Reform: Gender Injustice in Disguise," Washington Law Review 70, no. 1 (1995): 1-90.
9. Harvey Rosenfield, Foundation for Taxpayer and Consumer Rights, testimony before the House Energy and Commerce Committee (Pennsylvania), 10 February 2003, www.consumerwatchdog.org/healthcare/rp/rp003105.pdf (13 May 2004); M.J. Mehlman, "Resolving the Medical Malpractice Crisis: Fairness Considerations," June 2003, medliabilitypa.org/research/mehlman0603/ (14 August 2003); and T. Koenig and M. Rustad, "His and Her Tort Reform: Gender Injustice in Disguise," Washington Law Review 70, no. 1 (1995): 1-90.
10. Harvey Rosenfield, Foundation for Taxpayer and Consumer Rights, testimony before the House Energy and Commerce Committee (Pennsylvania), 10 February 2003, www.consumerwatchdog.org/healthcare/rp/rp003105.pdf (13 May 2004); M.J. Mehlman, "Resolving the Medical Malpractice Crisis: Fairness Considerations," June 2003, medliabilitypa.org/research/mehlman0603/ (14 August 2003); and T. Koenig and M. Rustad, "His and Her Tort Reform: Gender Injustice in Disguise," Washington Law Review 70, no. 1 (1995): 1-90.
11. American Law Institute, Enterprise Responsibility for Personal Injury, Reporters' Study (Philadelphia: ALI, 1991); M. Geistfeld, "Placing a Price on Pain and Suffering: A Method for Helping Juries Determine Tort Damages for Nonmonetary Injuries," California Law Review 83, no. 3 (1995): 773-851; and Mehlman, "Resolving the Medical Malpractice Crisis."
12. American Law Institute, Enterprise Responsibility for Personal Injury, Reporters' Study (Philadelphia: ALI, 1991); M. Geistfeld, "Placing a Price on Pain and Suffering: A Method for Helping Juries Determine Tort Damages for Nonmonetary Injuries," California Law Review 83, no. 3 (1995): 773-851; and Mehlman, "Resolving the Medical Malpractice Crisis."
13. American Law Institute, Enterprise Responsibility for Personal Injury, Reporters' Study (Philadelphia: ALI, 1991); M. Geistfeld, "Placing a Price on Pain and Suffering: A Method for Helping Juries Determine Tort Damages for Nonmonetary Injuries," California Law Review 83, no. 3 (1995): 773-851; and Mehlman, "Resolving the Medical Malpractice Crisis."
14. For an overview of the leading studies of the effectiveness of caps, see D.M. Studdert, M.M. Mello, and T.A. Brennan, "Medical Malpractice," New England Journal of Medicine 350, no. 3 (2004): 283-292. The following study should be added to that group: K.E. Thorpe, "The Medical Malpractice 'Crisis': Recent Trends and the Impact of State Reforms," Health Affairs, 21 January 2004, content.healthaffairs.org/cgi/content/ abstract/hlthaff.w4.20 (8 April 2004).
15. For an overview of the leading studies of the effectiveness of caps, see D.M. Studdert, M.M. Mello, and T.A. Brennan, "Medical Malpractice," New England Journal of Medicine 350, no. 3 (2004): 283-292. The following study should be added to that group: K.E. Thorpe, "The Medical Malpractice 'Crisis': Recent Trends and the Impact of State Reforms," Health Affairs, 21 January 2004, content.healthaffairs.org/cgi/content/ abstract/hlthaff.w4.20 (8 April 2004).
16. Studdert et al., "Medical Malpractice."
17. R.R. Bovbjerg et al., "Valuing Life and Limb: Scheduling 'Pain and Suffering,'" Northwestern University Law Review 83, no. 4 (1989): 908-976.
18. Mehlman, "Resolving the Medical Malpractice Crisis."
19. A.R. Localio et al., "Relation between Malpractice Claims and Adverse Events due to Negligence: Results of the Harvard Medical Practice Study III," New England Journal of Medicine 325, no. 4 (1991): 245-251; and D.M. Studdert et al., "Negligent Care and Malpractice Claiming Behavior in Utah and Colorado," Medical Care 38, no. 3 (2000): 250-260.
20. A.R. Localio et al., "Relation between Malpractice Claims and Adverse Events due to Negligence: Results of the Harvard Medical Practice Study III," New England Journal of Medicine 325, no. 4 (1991): 245-251; and D.M. Studdert et al., "Negligent Care and Malpractice Claiming Behavior in Utah and Colorado," Medical Care 38, no. 3 (2000): 250-260.
21. Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, Addressing the New Health Care Crisis: Reforming the Medical Litigation System to Improve Quality of Health Care, 3 March 2003, aspe.hhs.gov/daltcp/reports/medliab.htm (25 August 2003).
22. California Civil Jury Instructions, No. 14.13.
23. Bovbjerg et al., "Valuing Life and Limb."
24. W.K. Viscusi, "Pain and Suffering in Product Liability Cases: Systematic Compensation or Capricious Awards?" International Review of Law and Economics 8, no. 2 (1988): 203-220; and W.K. Viscusi, Reforming Products Liability (Cambridge, Mass.: Harvard University Press, 1991).
25. W.K. Viscusi, "Pain and Suffering in Product Liability Cases: Systematic Compensation or Capricious Awards?" International Review of Law and Economics 8, no. 2 (1988): 203-220; and W.K. Viscusi, Reforming Products Liability (Cambridge, Mass.: Harvard University Press, 1991).
26. Cal. Civ. Code, sec. 3333.2.
27. Perry v. Shaw, 88 Cal. App. 4th 658 (2001).
28. McAdory v. Rogers, 215 Cal. App. 3d 1273 (1989, 2d Dist).
29. Salgado v. County of Los Angeles, 19 Cal. 4th 629 (1998).
30. M. Sowka, ed., Malpractice Claims: Final Compilation (Brookfield, Wis.: National Association of Insurance Commissioners, 1980).
31. The aggregate verdict totals exhibited this same skew, as is evident in the consistently larger mean than median values noted in the discussion of data presented in Exhibit 2.
32. The four statistical properties of noneconomic damages reported in this subsection are consistent with the results from Bovbjerg and colleagues' study of jury verdicts from Florida and Missouri. See Bovbjerg et al., "Valuing Life and Limb."
33. For this calculation, proportional reduction is the appropriate specification of the change-in-award variable because it is sensitive to underlying mix of economic and noneconomic damages. There is no strong reason why the absolute-dollar value of noneconomic damages should be less for women or the elderly. Rather, the argument is that reductions to this component of the award have a greater effect on these plaintiffs because of the prominence of noneconomic damages in the overall award.
34. For this calculation, the absolute reduction in the size of the verdict is the appropriate specification of the change-in-award variable. We took a natural logarithm of the dollar reduction to normalize the distribution. Hence, the association between severity and reductions is expressed in terms of percentage change in the award for successive levels of severity.
35. F.A. Sloan and C.R. Hsieh, "Variability in Medical Malpractice Payments: Is the Compensation Fair?" Law and Society Review 24, no. 4 (1990): 601-650; K.S. Abraham, R.L. Rabin, and P.C. Weiler, "Enterprise Responsibility for Personal Injury: Further Reflections," San Diego Law Review (Spring 1993): 333-364; and Geistfeld, "Placing a Price on Pain and Suffering."
36. F.A. Sloan and C.R. Hsieh, "Variability in Medical Malpractice Payments: Is the Compensation Fair?" Law and Society Review 24, no. 4 (1990): 601-650; K.S. Abraham, R.L. Rabin, and P.C. Weiler, "Enterprise Responsibility for Personal Injury: Further Reflections," San Diego Law Review (Spring 1993): 333-364; and Geistfeld, "Placing a Price on Pain and Suffering."
37. F.A. Sloan and C.R. Hsieh, "Variability in Medical Malpractice Payments: Is the Compensation Fair?" Law and Society Review 24, no. 4 (1990): 601-650; K.S. Abraham, R.L. Rabin, and P.C. Weiler, "Enterprise Responsibility for Personal Injury: Further Reflections," San Diego Law Review (Spring 1993): 333-364; and Geistfeld, "Placing a Price on Pain and Suffering."
38. M.A. Peterson and G.L. Priest, "The Civil Jury: Trends in Trials and Verdicts, Cook County, Illinois, 1960-1979," Pub. no. R-2881-ICJ (Santa Monica, Calif.: RAND, 1982); M.G. Shanley and M.A. Peterson, "Comparative Justice: Civil Jury Verdicts in San Francisco and Cook Counties, 1959-1980," Pub. no. R-3006 (Santa Monica, Calif.: RAND, 1982); and S. Daniels and J. Martin, Civil Juries and the Politics of Reform (Evanston, Ill.: Northwestern University Press, 1995).
39. M.A. Peterson and G.L. Priest, "The Civil Jury: Trends in Trials and Verdicts, Cook County, Illinois, 1960-1979," Pub. no. R-2881-ICJ (Santa Monica, Calif.: RAND, 1982); M.G. Shanley and M.A. Peterson, "Comparative Justice: Civil Jury Verdicts in San Francisco and Cook Counties, 1959-1980," Pub. no. R-3006 (Santa Monica, Calif.: RAND, 1982); and S. Daniels and J. Martin, Civil Juries and the Politics of Reform (Evanston, Ill.: Northwestern University Press, 1995).
40. M.A. Peterson and G.L. Priest, "The Civil Jury: Trends in Trials and Verdicts, Cook County, Illinois, 1960-1979," Pub. no. R-2881-ICJ (Santa Monica, Calif.: RAND, 1982); M.G. Shanley and M.A. Peterson, "Comparative Justice: Civil Jury Verdicts in San Francisco and Cook Counties, 1959-1980," Pub. no. R-3006 (Santa Monica, Calif.: RAND, 1982); and S. Daniels and J. Martin, Civil Juries and the Politics of Reform (Evanston, Ill.: Northwestern University Press, 1995).
41. Studdert et al., "Medical Malpractice."
42. H.M. Kritzer, Let's Make a Deal: Understanding the Negotiation Process in Ordinary Litigation (Madison: University of Wisconsin Press, 1991); and R.H. Mnookin and L. Kernhauser, "Bargaining in the Shadow of the Law: The Case of Divorce," Yale Law Journal 88, no. 5 (1979): 950-997.
43. H.M. Kritzer, Let's Make a Deal: Understanding the Negotiation Process in Ordinary Litigation (Madison: University of Wisconsin Press, 1991); and R.H. Mnookin and L. Kernhauser, "Bargaining in the Shadow of the Law: The Case of Divorce," Yale Law Journal 88, no. 5 (1979): 950-997.
44. A. Schwartz, "Proposals for Product Liability Reform: Theoretical Synthesis," Yale Law Journal 97, no. 3 (1988): 353-419; and S. Shavell, Economic Analysis of Accident Law (Cambridge, Mass.: Harvard University Press, 1987).
45. A. Schwartz, "Proposals for Product Liability Reform: Theoretical Synthesis," Yale Law Journal 97, no. 3 (1988): 353-419; and S. Shavell, Economic Analysis of Accident Law (Cambridge, Mass.: Harvard University Press, 1987).
46. Bovbjerg et al., "Valuing Life and Limb"; J.M. Corrigan, A. Greiner, and S.M. Erickson, eds., Fostering Rapid Advances in Health Care: Learning from System Demonstrations (Washington: National Academies Press, 2002); P.C. Weiler, "Fixing the Tail: The Place of Malpractice in Health Care Reform," Rutgers Law Review 47, no. 3 (1995): 1157-1193; and M.M. Mello and T.A. Brennan, "Deterrence of Medical Errors: Theory and Evidence for Malpractice Reform," Texas Law Review 80, no. 7 (2002): 1595-1637.
47. Bovbjerg et al., "Valuing Life and Limb"; J.M. Corrigan, A. Greiner, and S.M. Erickson, eds., Fostering Rapid Advances in Health Care: Learning from System Demonstrations (Washington: National Academies Press, 2002); P.C. Weiler, "Fixing the Tail: The Place of Malpractice in Health Care Reform," Rutgers Law Review 47, no. 3 (1995): 1157-1193; and M.M. Mello and T.A. Brennan, "Deterrence of Medical Errors: Theory and Evidence for Malpractice Reform," Texas Law Review 80, no. 7 (2002): 1595-1637.
48. Bovbjerg et al., "Valuing Life and Limb"; J.M. Corrigan, A. Greiner, and S.M. Erickson, eds., Fostering Rapid Advances in Health Care: Learning from System Demonstrations (Washington: National Academies Press, 2002); P.C. Weiler, "Fixing the Tail: The Place of Malpractice in Health Care Reform," Rutgers Law Review 47, no. 3 (1995): 1157-1193; and M.M. Mello and T.A. Brennan, "Deterrence of Medical Errors: Theory and Evidence for Malpractice Reform," Texas Law Review 80, no. 7 (2002): 1595-1637.
49. Age is a reasonably well-established predictor of noneconomic damages. See Bovbjerg et al., "Valuing Life and Limb."
50. A couple of states already employ a sliding-scale approach to setting the level of the cap. For example, Alaska's cap limits noneconomic damages to $400,000, or $8,000 times the years of the plaintiff's life expectancy, whichever is greater (Alaska Stat. Sec. 09.17.010); in cases of severe and permanent impairment or severe disfigurement, the limit is the greater of $1 million or $25,000 times the years of the plaintiff's life expectancy. Ohio's recently enacted cap is set at the greater of $250,000 or three times the plaintiff's economic loss up to a maximum of $350,000 (Ohio S.B. 281). Although innovative, these approaches only partially embrace the logic of a sliding scale because they are tethered to factors - life expectancy and economic damages - that may have a weak relationship to the actual severity of the noneconomic loss.
51. Bovbjerg et al., "Valuing Life and Limb."