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Damages: Why Special Treatment for Docs.?
Posted by: Damon Davis
March 24, 2010
Topic: Wrongful Death
In my last entry I wrote about wrongful death damage caps. I'd like to write about damage caps again today. With all the news about medical reform, I'd like to write about the medical malpractice damage caps in Colorado. In Colorado, the medical malpractice damage cap is contained in section 13-64-302, C.R.S. The cap is a total of one million dollars, of which no more than $300,000 can be for non-economic damages. You may recall from my previous entry that the non-economic damages for everyone else are capped at $468,010 with no cap on economic damages. One must question why doctors are entitled to special treatment that the rest of the citizens of Colorado are not.
Regardless of the non-economic damages cap, the unfairness of the total damage cap is evident. If an individual is injured or killed by a doctor who commits medical malpractice, his losses are capped at one million dollars, even if his lost income and additional medical bills will exceed that amount. For example, if you had a forty year old individual who was making $200,000 a year, over the remainder of his work life he could expect to make in excess of five million dollars. If this business person were injured such that he could no longer work, his damages would be capped at one million dollars despite the fact that he lost much more than that. This is quite simply unfair. It is even more unfair when one considers that all of us who are not doctors lack the same protection.
Many people will state that it is necessary to have caps on malpractice damages in order to keep malpractice insurance rates low. However there is no firm evidence that the amount of damage caps, or even the amount of jury verdicts, has a significant effect on insurance premiums. Instead the stock market and investment opportunities have a much bigger impact on premiums. Your insurance premiums are invested in these opportunities and the profits from such investment are used to pay claims. You do not need to take my word for it that legislation regulating damages has little effect on insurance premiums; you can use your own experience. When Colorado eliminated personal injury protection, the people were told that it would result in decreased insurance premiums, because they would no longer have to pay for this additional coverage. However, most of us actually experienced an increase in insurance premiums. This is because the insurance companies lost the income from selling personal injury protection and thus had to make it up with increased charges for other forms of protection. Thus, although the insurance companies complained about making payments on PIP, they were actually making a healthy profit on it.
Many people will also state that damages caps are necessary to prevent the so called litigation lottery, which many politicians talk about when discussing medical malpractice claims. However, the damage caps and other provisions regarding medical malpractice contribute to this far more than an uncapped system would. First, if doctors know that their damages are capped, they have little incentive to settle. Because they know the maximum amount they may have to pay, they know that they have a limited risk. This limited risk encourages them to litigate rather then settle. Further, the provisions of section 13-64-303 also discourage settlement. This provision requires that all settlement be reported to the licensing authority for the healthcare professional. This could possibly result in discipline of the medical professional. Thus doctors are disinclined to settle cases because such settlement may result in professional discipline. The two provisions together especially limit settlement opportunities, because the doctor can obtain insurance in the amount of the maximum damages for which he will be held liable and therefore will have no risk of loss by going to trial. Also, by going to trial he may avoid having to report his misconduct to his licensing authority.
Like any other suit, the best way to avoid a so-called litigation lottery in malpractice cases is for reasonable settlement. However, the provisions of Colorado statutes, including the damage cap provisions, discourage such settlement. As with wrongful death cases, medical malpractice cases should have the same damage limitations as every other claim. There is no practical or moral reason to give health care providers protections that the rest of the citizens of Colorado lack. It is also unfair to plaintiffs to state that because their injuries were caused by one person and not another, the law will provide them less relief. For these reasons, the legislature should put everyone on an equal footing and use the same damage caps for doctors that they use for everyone else.
