The verdict is still out on whether South Carolina's new laws limiting economic damages in medical malpractice lawsuits will drive down doctors' insurance costs.
Earlier this month, Gov. Mark Sanford signed into law a bill limiting noneconomic damage awards in medical malpractice cases to $350,000. If there are multiple defendants, such awards are capped at $1.05 million.
Though supporters say the new laws will help stabilize increasing insurance premiums, opponents remain unconvinced. And a national study released this week shows that lawsuit limits may not mediate insurance costs.
Boyce Tollison, M.D., chair of the South Carolina Medical Association's healthcare council for liability reform, said he expects the caps to drive down malpractice premiums within the first year.
"That's been the experience of other states (that have enacted similar laws)," he said. "Texas had a decrease of about 10% in the first year. This is a very positive thing for doctors."
Insurers base their premiums partly on anticipated losses, said orthopedic surgeon John Evans, M.D., immediate past president of the state medical association. Premiums will follow those amounts, he said.
But lawyer Ken Anthony said the measure will only save insurers money because they can charge the same premiums but not pay out as much in damages.
"It hasn't saved doctors money in any other state," he said, "so there's no reason to think it will do so in this state."
In a report released last week, the Washington-based consumer advocate Public Citizen blames increasing malpractice premiums on greedy insurance companies, not frivolous lawsuits.
Public Citizen reports that in California, while premiums initially leveled off after enactment of a $250,000 cap on noneconomic damages, they then rose significantly.
The group also analyzed statistics from the National Practitioner Data Bank and found that the number of malpractice payouts per 100,000 people dropped 9% in the past 13 years and that the number of multimillion dollar payouts, which represent just 1% of all awards, declined 56% during that time.
"Doctors say it's the fear of large verdicts which drive them to settle ... for even larger amounts," said Chris Schmitt, civil justice research director for Public Citizen's Congress Watch. "But we showed that verdicts are pretty much flat over time, and not the hammer that doctors claim they are."