Lawmakers Mull Malpractice Payout Limits

One way to reduce medical insurance costs would be to limit the amount of money patients collect in malpractice suits, experts on Capitol Hill argued Wednesday.

Insurers and medical professionals want Congress to limit the amount of money that patients can win in malpractice lawsuits, which they say is so over the top that it is causing malpractice insurance to rise. With higher insurance rates for doctors come higher rates and fewer services for patients, they argue.

"Emergency departments are losing staff and scaling back certain services such as trauma units," Dr. Donald Palmisano of the American Medical Association told a House Judiciary subcommittee.

He said that many obstetricians, gynecologists and family physicians "have stopped delivering babies, and some advanced and high-risk procedures are being postponed because surgeons cannot find or afford insurance."

Supporters of limiting suit payouts say more than half of all jury awards exceed $1 million, and that the average jury award has increased to about $3.5 million. The result? An increase in liability premiums by 79 percent in less than 10 years.

"It is clear that the increasing proportion of multimillion-dollar jury awards is driving the boom in claims costs," Palmisano said.

But opponents of the legislation say there is no guarantee that fewer legal cases would result in lower costs. Part of the reason is that insurance companies are still making up from the drop in the stock market, payouts after Sept. 11, and the cost of litigation.

"Today's insurance crisis has absolutely nothing to do with the U.S. legal system, tort laws, lawyers or juries," said Joanne Doroshow, executive director of the Center for Justice and Democracy.

Doroshow said medical malpractice verdicts average only $30,000, and associated costs of medical malpractice, as a percentage of national health care expenses, are at an all-time low of 0.55 percent.

Palmisano has his own statistics. He cited California, where medical malpractice award limits of $250,000 have been in place since 1979. According to the American Medical Association, early liability premiums for obstetricians and gynecologists average between $46,938 and $57,740 in Los Angeles, while in Miami where no limits are legislated, premiums range between $108,043 and $202,949.

"These numbers speak for themselves. There is no doubt that our current system for resolving medical liability claims is critically flaws," Palmisano said.

The Associated Press contributed to this report.