Dive Brief:
- California voters have decisively rejected a proposal that would have dramatically raised a cap on non-economic damages in malpractice suits and required drug and alcohol testing of doctors. It would have also insisted that doctors check a statewide prescription database before prescribing painkillers and other impairing drugs.
- While the drug tests and the database checking didn't seem to raise a too many hackles, interest groups including insurers and physician organizations pulled together $60 million to fight the malpractice cap change. The proposal would have raised the cap on "pain and suffering" awards in malpractice cases from $250,000 to $1.1 million.
- The cap has been in place since 1975, and according to the California Medical Association, has dramatically lowered malpractice premiums.
Dive Insight:
So what would have happened if the medical malpractice in Proposition 46 passed? For one thing, according to the nonpartisan Legislative Analyst's Office, raising the cap would have cost the government anywhere from tens of millions to several hundred million dollars per year. That being said, the physician drug testing and prescription monitoring pieces of the measure would have offset those costs by some degree of savings, possibly a significant degree, the Office said.
Meanwhile, some consumer advocacy groups contend that the argument was based on false premises. One such group, ConsumerWatchdog.org, cites data concluding that California's medical malpractice premiums actually shot up for more than a decade after the passage of the pain and suffering cap.
Their data suggests that med mal caps didn't stabilize until state residents enacted strong insurance rate regulation, Proposition 103, in 1988. Prop 103 resulted in a rate freeze, a rate rollback and stringent regulation that reduced premiums in all lines of insurance including med mal. Within three years of Prop 103 being enacted, the consumer group says, med mal rates fell by more than 20%.
This issue is likely to resurface again and again, in other states as well as California, as the relationship between medical malpractice premiums and damages remains a subject of extremely hot debate. Expect to see more battles of this kind spring up nationally.