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January 31, 2013

California's Cap on Medical Malpractice Damages Needs Surgery

Kabateck.jpgBy Brian S. Kabateck '89, Guest Alumni Blogger

Most lawyers don't know that in 1975 Governor Brown signed a law that radically changed medical malpractice litigation in California. That law, known as MICRA (Medical Injury Compensation Reform Act), was born in a time when most doctors were in private practice and the insurance industry was largely uncontrolled and financially crushing doctors by boosting malpractice premiums. Among other reforms, MICRA capped any pain and suffering award at $250,000. In the 38 years since MICRA became law, there has been no change whatsoever in the $250,000 cap - and during the same timeframe, inflation has dramatically affected the value of $250,000. In fact, if you apply a basic cost of living factor for inflation, that same $250,000 would now approach approximately $1.1 million. While under MICRA there is no artificial cap on economic losses such as medical care, life care and lost earning, its $250,000 cap on non-economic damages intended to offset the real costs of human suffering creates an unfair situation in cases involving the loss of a child, a non-income earning spouse or a retired person. Quite simply, the life of a child lost because of medical error is only worth $250,000 in California. Outrageous!

Consider also that the entire practice of medicine has changed in the last 38 years. Most Californians who are insured get their medical care though managed care like an HMO or Kaiser. Gone are the days when private practitioners where the norm. Many patients feel like doctors are restricted in making decisions by administrators and other people who are not doctors but are often making the decisions for them. Patient safety is a serious concern in the United States today. It is estimated that more than 300,000 people die every year from medical errors. To put that number into context, medical errors are the third leading cause of death behind heart disease and cancer. It's the equivalent of two full 747s crashing every day. In California, an estimated 37,500 people die from medical errors every year. Meanwhile, doctors have a more lenient discipline system than lawyers; many doctors go unchecked while wrestling with addiction to alcohol and prescription drugs. The media seem to be reporting stories every day of serious medical errors and negligence. Michael Jackson is the most famous victim of medical negligence.

Our tort system does act as a deterrent. We know that cars are safer because of product liability cases, insurance companies are held accountable when they fail to pay legitimate claims, Big Pharma is responsible for bad and dangerous drugs - the list goes on and on. There are no caps on those other industries. In fact, no profession has artificial caps in place except the medical field. Eliminating the cap entirely and letting juries decide the level of damages would be the best approach, but at a minimum the cap should be adjusted to account for inflation and then adjusted regularly to keep up with the cost of living. Even the original rationale for the cap no longer applies. Shortly after the current California insurance commissioner took office, he forced all admitted malpractice insurance firms to refund premiums because medical malpractice coverage is the most profitable line of insurance in the state. Beyond such administrative steps, the notion of caps is fundamentally contrary to our legal system, the Seventh Amendment and the entire idea that one group shouldn't receive special treatment over others.

We teach a tort system in law schools across the country that is free of artificial limitations on damages. In fact, our entire constitutional civil justice system is based on the notion that juries are best equipped to determine the value of a plaintiff's claim. We need to reconsider the MICRA caps.

Brian S. Kabateck is the founding and managing partner of Kabateck Brown Kellner LLP and president of the Consumer Attorneys of California.