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Study: malpractice suit caps only benefit insurance companies

| Oct 28, 2011 | Medical Malpractice |

A new study published by the New England Journal of Medicine has revealed that placing caps on the amount that an injured person can be awarded in a medical malpractice lawsuit only really hurts one party — the patient.

This study debunks what many insurance companies have long argued has been a trend in medical malpractice. According to some insurance companies, states that do not enforce compensation caps allow expensive lawsuits to plague doctors and patients alike, causing premiums on insurance plans to increase.

But the study, along with a similar study performed by the American Association for Justice, found that even in states that enforce payout caps, insurance companies continue to steadily increase premiums.

Some proponents pointed to other data revealed by the NEJM study, which revealed that nine out of 10 malpractice claims never resulted in a payout. According to some, this is an indication that the majority of medical malpractice lawsuits are frivolous. But another study at Harvard University seems to show quite the opposite. Researchers at the college found 97 percent of all claims did result in a serious disability or death.

It has always been clear that victims of medical malpractice face a long road to recovery and an equally long road to financial justice, but studies like the one published by the NEJM are helping to squash previous misconceptions on how caps on lawsuit payouts only hurt medical professionals and patients themselves.

Insurance companies will continue to increase premiums even in states where caps allow them to extract more profits. Illinois tried and failed to maintain a $500,000 cap on non-economic damages against doctors and $1 million in cases against hospitals after the 2005 law enforcing the cap was overturned. Now, new data is beginning to show residents why such a cap cannot work.

Source:, “Compensation is difficult to get for patients harmed by medical errors,” Trish Mehaffey, Oct. 25, 2011