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Strengthening Healthcare

A Proven Solution

  • The HHS report also shows that there is a proven solution: liability reforms including reasonable limits on non-economic damages ($250,000-350,000) are working in many states to reduce health care costs and improve access and quality of care.
  • Reasonable caps on noneconomic damages result in lower medical liability costs, resulting in much lower medical liability premiums and stable availability of liability insurance, so that access to doctors is not threatened. Liability premium increases last year averaged 12% in states with caps, and 44% in states without. Liability premiums for OB/Gyns in Florida (no cap) are $100,000-$200,000 but in California (reasonable cap) are $46,000-$57,000. Over the past 25 years since California instituted a reasonable cap on noneconomic damages, liability premiums have increased by less than one third as much as in the rest of the country.
  • If applied nationally, studies based on the experience of these states indicate that: over $60 billion per year in health care costs could be redirected from lawsuits and unnecessary care toward paying for valuable drugs and other treatments; over $30 billion in Federal payments could be redirected toward improving Medicare, Medicaid, and other Federal programs for reducing health care costs; and over 2 million more Americans would be able to afford health insurance.
  • Studies also show no adverse effects on patient care associated with these caps. In fact, quality of care improves because of greater access to physicians.

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