Pro

Jury awards and malpractice insurance premiums out of control:
Reformers often point out that the current system of malpractice lawsuits and insurance is simply nonsensical and unfair. Jury awards for non-economic and punitive damages lead to huge increases and inequities in insurance payouts and premiums. According to the Physician Insurers Association of America (PIAA
- pdf), from 1999 to 2003, total awards to patients increased over 30% while the number of malpractice claims remained flat. Non-economic damages can be so high that, in Florida, for example, they make up 77% of awards. As we pointed out on the details page, the cost of premiums vary hugely depending upon where a doctor practices and what kind of medicine she practices.

Driving away doctors and cutting back on care:
Large premiums, it is argued, result in less access to care. Reports of doctor shortages in certain practice areas (particularly OB/GYN) and in rural areas suggest that huge insurance costs are scaring physicians away. According to a 2002 study by the American College of Obstetricians and Gynecologists, 73% of OB/GYN's surveyed in nine states had been forced to retire, relocate, or modify their practice (for example, decrease surgical procedures, abandon obstetrics, or decrease the amount of high-risk care). And it's not just individual doctors who are affected; according to the American Hospital Association and the American Society of Hospital Risk Management, one-third of hospitals saw their liability insurance premiums at least double in 2002.

Raising costs for us all: Reformers claim that steep increases in malpractice premiums force doctors to practice "defensive medicine" - ordering unnecessary medical tests, procedures, and referrals for their patients - which increases the costs for the healthcare system. According to the US Department of Health and Human Services (HHS), defensive medicine is estimated to cost between $70 billion to $126 billion a year.

Caps work: According to the GAO, evidence suggests that when states limit non-economic damage awards, premiums are kept in better check. In 2001-2002, for example, premiums rose 10% in states that had caps of $250,000 for non-economic damages, but rose 29% in states without similar caps. (GAO)

Con

Jury awards are not the only thing pushing up premiums:
Opponents of reform point out that there are other factors besides high jury awards that are pushing up premiums, the biggest factor being the market. Insurance companies make profits from charging premiums and by investing their money. When the market is strong, they can afford to charge lower premiums, but when the market gets weak, they'll charge higher premiums to make up for their slower investment returns. The CBO says that low returns between 2000-2002 could have caused insurance companies to raise their rates by 7.2%, almost a half of the total rise in premiums during that time. (CBO)

Caps don't work: In one study of 19 states with caps and 32 (counting D.C. as a state), Weiss Ratings found that states without caps actually saw malpractice premiums grow more slowly than those with caps.

Problems with access to care are overstated: A GAO study on five states commonly reported to be hurt by high premiums found that, although doctors' actions in response to "malpractice pressures have reduced access to services affecting emergency surgery and newborn deliveries," many of the reported actions by doctors "were not substantiated or did not widely affect access to health care." (GAO)

Costs of medical malpractice on health care system as a whole are exagerrated and/or inconclusive: The costs of medical malpractice account for less than 2% of all health care costs, so reform opponents argue that even if malpractice completely disappeared, consumers would barely notice. (CBO) It's also unclear how much defensive medicine adds to health care expenses, at least according to the GAO and CBO, two of the government's nonpartisan research outfits. In the words of the GAO: "Research indicates that physicians practice defensive medicine in certain clinical situations... however, the overall prevalence and costs of such practices have not been reliably measured." And the CBO: "on the basis of existing studies and its own research, CBO believes that savings from reducing defensive medicine would be very small."

Caps would hurt the real victims and not stop frivolous lawsuits:
Malpractice caps would do nothing to stop the number of actual frivolous lawsuits, but would affect those cases in which there has occurred serious injury. These "serious injury" cases do not make up the majority of cases filed against medical professionals. According to the American Medical Association's own data, nearly 70% of medical liability claims in 2002 were closed without payment to a patient. Of the 7% of claims that went to jury verdict, the defendant won 82.4% of
the time.