By: Michelle Mello, JD, PhD
Stanford Law School and Stanford University School of Medicine
On November 4, Californians will vote on Proposition 46, a ballot initiative to adjust the $250,000 state’s noneconomic damages cap in medical malpractice cases for inflation, raising it to $1.1 million virtually overnight. It’s a long overdue move – California has one of the most stringent damages caps in the country, and the cap really affects access to the legal system. Now is the perfect time to do it, because after years of turbulence, the medical liability environment has calmed.
In an analysis published October 30 in the Journal of the American Medical Association (JAMA), David Studdert, Allen Kachalia and I report that data from the National Practitioner Data Bank show that the frequency and average cost of paid malpractice claims have been declining. The rate of paid claims against physicians decreased from 18.6 to 9.9 paid claims per 1,000 physicians between 2002 and 2013, with an estimated annual average decrease of 6.3% for MDs and a 5.3% decrease for DOs. Among claims that resulted in some payment, the median amount paid increased from $133,799 in 1994 to $218,400 in 2007, an average annual increase of 5%. Since 2007 the median payment has declined, reaching $195,000 in 2013, an average annual decrease of 1.1%.
Trends in insurance premiums vary more according to which market you’re looking at, according to data from the Medical Liability Monitor’s Annual Rate Survey, but also look pretty favorable overall. None of the locations we examined showed large increases over the last 10 years, and most showed flat or declining premiums. Read More