The American Medical Association last week refused to budge from its steadfast demand for a federal limit on noneconomic damages in medical malpractice cases, despite an authoritative report that describes such a strict cap as unfair to injured patients.
In a report released earlier this month as part of a $3.5 million study on medical liability issues by the Pew Charitable Trusts, researchers said caps on noneconomic damages, or pain and suffering, unfairly affect patients who are the most seriously injured by medical errors and negligent doctors, as reported in Modern Healthcare's Daily Dose electronic newsletter June 13.
The Pew report, released just days before the AMA began its annual House of Delegates meeting last week in Chicago, said "patients who recover large amounts of compensation under the current system tend to be victims of true negligence who have suffered serious injury. These are the people who stand to lose under caps."
Donald Palmisano, the AMA's newly installed president and the association's point man on the medical liability issue for years, dismissed the Pew report, saying, "We think the current medical liability system is unfair to patients-that's because patients are being deprived access to medical care."
"These studies have been done in the past," said Palmisano, a New Orleans surgeon who also is the first AMA president with a law degree-he also holds an active license for that profession. "What we're concerned about is a patient who can't find a physician when their baby has a blood clot on the brain."
For years, the Chicago-based AMA has insisted that states and the federal government impose a cap of $250,000 on noneconomic damages. That is the only effective way to reduce medical liability insurance premiums that have increased so quickly in some states that many physicians have been forced to retire, relocate or change the scope of their practice, leaders like Palmisano say.
But the Pew report author, Maxwell Mehlman, an attorney who also is a professor of biomedical ethics at Case Western Reserve University in Cleveland, said flat caps are unfair because they arbitrarily deny compensation to the most seriously injured patients. He is sharply critical of the AMA's insistence on a $250,000 cap.
"That limit is not only abstract, it's absurd," said Mehlman, who added that he wasn't ruling out all caps as unfair, and that an undetermined but higher threshold might be equitable.
Other observers suggested that the AMA must be willing to compromise if it expects any form of a cap on damages to become federal law.
"I think the AMA will have to bend somewhat if they want to see medical liability reform this year," said James Couch, another physician-lawyer and chief medical officer of New World Healthcare Solutions, a consultancy based in New York.
Since identifying medical liability reform as its top issue, the AMA has won several small but important battles, leading a nationwide effort to try to change state and federal law. On the federal level, the full House passed a measure earlier this year capping noneconomic damages at $250,000 (March 17, p. 8). In the Senate, a similar measure has stalled in committee after the AMA rejected a compromise that would have increased that limit to $500,000.
Palmisano adamantly refuses to compromise on the $250,000 limit. That limit was first imposed in a landmark 1975 California law, the Medical Injury Compensation Reform Act, which continues to serve as the model for the AMA. The limit set in California has not changed, even though that figure would translate to about $855,000 today after adjusting for inflation, based on the Consumer Price Index.
The Pew study acknowledged that past surveys have shown that caps on damages, along with measures like a shortening of the statute of limitations, often lead to stabilized premiums, if not reductions in those costs. "However," the report noted, "caps achieve their objectives in an unfair manner."