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Read Making a Killing

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National Public Radio (NPR) Marketplace (6:30PM)
Feb 10, 2003


National debate continues on nationwide cap on pain and suffering malpractice jury awards


Tomorrow Congress takes up the country's medical liability problem with a joint hearing in front of the Senate Health and Judiciary committees. Renewed pressure for federal legislation to control malpractice insurance costs comes as New Jersey begins to recover from the latest and largest of several doctor walkouts around the country. Nationally, the proposed solution with the biggest head of steam is a limit on pain and suffering malpractice jury awards fashioned after a law in California, but critics say such a cap won't work. From WHYY in Philadelphia, Beatrice Black reports.


Dr. Richard Corlin has absolutely no doubt that limiting non-economic damages in medical malpractice cases will cure the medical liability insurance crisis.

Dr. RICHARD CORLIN (Gastroenterologist; Former President, American Medical Association): And the reason I believe is that is our 27 years' experience with having that in California.

BLACK: Corlin is a Santa Monica gastroenterologist and immediate past president of the American Medical Association. California's cap is $250,000, and Congress is considering making that the national threshold. Remember, Corlin says, this would limit only pain and suffering damages. Corlin uses a hypothetical example: a victim who usually makes $60,000 a year, but can't work for four months because of bad medical treatment.

Dr. CORLIN: 60 divided by three is $20,000. They get the $20,000 that they would have lost. They don't get what Tom Cruise might have made during those same four months just because they're a real nice guy.

BLACK: Health-care providers and insurers point to a trend of rising jury awards for pain and suffering as evidence for the need to set a limit. But critics say the cap is oversold as a solution. Jamie Court of the Foundation for Taxpayer and Consumer Rights in Santa Monica says insurance regulations enacted in the late 1980s are responsible for California's reasonable rates. Court says doctors elsewhere are doomed to disappointment if they pin their hopes on a cap.

Mr. JAMIE COURT (Foundation for Taxpayer and Consumer Rights): They're expecting to see a premium decrease, and many states have caps on damages, but they have an insurance crisis now, too, because they don't have rate regulation.

BLACK: The AMA counters that California's regulatory framework is not particularly unusual and maintains that the cap is the critical factor controlling that state's malpractice costs. But in New Jersey, where an estimated 70 percent of doctors closed their offices last week, the Legislature has stopped short of calling for a cap. Democratic state Senator Joseph Vitale is a key lawmaker in New Jersey's attempt to control malpractice rates at the state level.

State Senator JOSEPH VITALE (Democrat, New Jersey): We've done an analysis of all markets and all states that have had caps in place or do not have caps and have spoken with actuaries who understand this business better than I do. They insist, really, that a cap on the non-economic side would have very little impact on the actual premium that a physician pays.

BLACK: Vitale thinks caps have become a mantra for doctors and insurance companies, obscuring other strategies, namely preventing medical errors in the first place. Nationally, the debate tends to be split along party lines, with President Bush and Republican members of Congress supporting a cap and Democrats opposed. I'm Beatrice Black for MARKETPLACE.

GLASER: Way up in the ivory tower business school, things are changing. Ethics education's in full bloom. But will the lesson survive the harsh exposure of the real world?

CHARLES DUHIGG: The high level of ethical soul-searching around here, frankly, is irrelevant for the people who are ethical to begin with and of no help to the minority who aren't.

GLASER: Coming up, testing the moral bounds of free marketeers.

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