Update: Proposition 46

By Emily Largent

I previously wrote about California Proposition 46–which proposed to raise the cap on pain and suffering awards in malpractice cases from $250,000 to $1.1 million, require doctors to check a statewide database of drug prescriptions before prescribing some narcotics, and require doctors to undergo random drug and alcohol testing–here.

What happened?  On Tuesday, voters “soundly defeated a proposal to lift a decades-old cap on courtroom damages for medical negligence, after a multimillion-dollar political duel pitting trial lawyers against doctors and insurers.”  Proposition 46 was defeated by a 2-to-1 margin, with 67% of voters rejecting it. (There is some speculation that an error in translation for voter materials could have affected the way Vietnamese-speaking voters voted on Tuesday; however, there is no suggestion this would have changed the outcome.)

Proposition 46 was the most expensive race in California this election.  The No side spent close to $60 million in its efforts to see the Proposition defeated, almost seven times the spending on the Yes side.

The Medical Liability Climate: The Calm Between Storms Is the Time For Reforms

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

Prop. 46: Lawyers v. Doctors

By Emily Largent

California Proposition 46, the Medical Malpractice Lawsuits Cap and Drug Testing Doctors Initiative, is on the November 4, 2014 ballot.  If approved by voters, the initiative would: increase the state’s cap on non-economic damages that can be assessed in medical negligence lawsuits; require hospitals to test certain physicians for drugs and alcohol; and require healthcare providers to check a statewide prescription drug database before prescribing or dispensing certain drugs to a patient for the first time.

The  debate over Proposition 46 has been framed as a battle between doctors and lawyers.  See also here or here.  It’s not hard to see why.  Attorneys have contributed the vast majority of the “yes” campaign‘s $9 million fund.  By contrast, nearly three-fourths of the “no” campaign‘s $57 million has come from six insurance companies; other big backers include the state medical and dental associations.  (It is the most expensive campaign in California this year.)  While the two sides have made a variety of arguments for and against Proposition 46’s various provisions, I want to focus on the putative costs and cost-savings:

First, Proposition 46 would increase California’s current $250,000 limit on non-economic awards (which dates to the Medical Injury Compensation Reform Act of 1975) to $1.1 million, and provide for annual adjustment for inflation going forward. The non-partisan Legislative Analyst’s Office estimates that increased state and local government health care costs from raising the cap likely range from the tens of millions of dollars to several hundred million dollars annually.  On the other hand, a RAND study of EDs in three states with strict malpractice limits found the caps had little effect on the cost of care.  Read More