Introduction

If your doctor is thinking of quitting his medical practice or moving to another state to practice medicine, chances are that you'd better have a serious conversation with your state legislator. Medical malpractice law is the state legislators' responsibility.

Based on their detailed examination of medical liability laws in all 50 states, members of the Heritage research staff have ranked the states according to their progress in medical liability reform. California, Colorado, Maine, Michigan, and Utah have made the most substantial progress in reforming medical malpractice laws; but most states, including Texas, New York, New Jersey, Pennsylvania, and Washington State, have failed to make similar progress. Ranking at the bottom are Kentucky, Mississippi, Nevada, North Carolina, and South Carolina.

In setting the criteria for ranking the states, Heritage staff examined tort laws that give immunity to medical professionals under certain circumstances, such as the delivery of emergency care; the provision for a statute of limitations on medical malpractice suits; rules guaranteeing the qualifications of expert witnesses; rules providing for periodic payment of large damages; rules providing alternatives to litigation; and limitations on attorney's fees and non-economic damages.

Patients Pay the Price
America may have the best health care system in the world, but the rising cost of malpractice insurance and the state laws that govern medical malpractice jeopardizes patients' access to care. The problem is not only the rise in the numbers of medical malpractice suits, but also the increase in the size of jury awards. The high price of practicing medicine is forcing a growing number of physicians to limit their area of practice, retire, or move their practice to another state.

These ominous developments are damaging the financing and delivery of health care. For example:

• Access to care is being compromised. An April 2002 study by Harris Interactive found that one-third of physicians shied away particular specialties out of fear of greater liability exposure.[1] Since 1995, juries in Mississippi have awarded $1.8 billion to plaintiffs. As a result, the majority of cities in Mississippi with populations under 20,000 no longer have doctors that deliver babies.[2] In Las Vegas, Nevada, the only trauma center was forced to close earlier in 2002 when all of its surgeons quit because they could no longer afford the cost of malpractice insurance that, for some, had increased from $40,000 to $200,000.
• Costs are soaring. Although the size of jury awards is up, plaintiffs in these cases see only a fraction of the amount recovered. According to the President's Council of Economic Advisers, 58 cents from every dollar recovered goes to attorneys for administrative and defense costs and attorney's fees.
• Doctors are demoralized. In January 2003, physicians in West Virginia walked off the job fearing that medical liability is limiting their ability to provide patients with high-quality care. In Pennsylvania, doctors faced premium increases of 40 percent last year, while specialists in Arkansas and Florida faced increases in malpractice insurance premiums of 112 percent and 75 percent, respectively. [3]

State Variations
Not all states face a medical malpractice crisis. Several states have addressed the issue of the runaway cost of malpractice insurance through reform of their tort laws. By limiting the size of jury awards, they have successfully discouraged frivolous lawsuits while keeping the rising cost of malpractice insurance to manageable levels. And by limiting the amounts attorneys can collect from their clients, they have made it less likely that frivolous lawsuits will be brought in the first place.

The Legislative Remedies
State legislators can take a variety of other steps to address the deepening medical malpractice crisis. These include re-focusing malpractice awards on economic losses, such as lost pay or similar losses attributable to the medical injury; targeting punitive damages to the small number of medical malpractice cases in which punishment of doctors or medical professionals is clearly warranted; and limiting attorney's fees to guarantee that the injured patients get the highest possible proportion of awards in medical malpractice cases.

Finally, state legislators should make changes in medical malpractice laws that would encourage a new type of health care insurance for patients: adverse event insurance. In many cases, doctors and other medical professionals are sued because of adverse medical outcomes, even though there is no evidence of fault or negligence on the part of the doctor. This type of insurance product exists in areas, such as airline passenger insurance, in which consumers take out a low-cost insurance policy because there is a remote possibility of an accident. Similar types of insurance products make sense in medical cases.

The Status Of Medical Malpractice Laws In The States
Heritage staff examined the medical malpractice laws and reforms for each state, and what steps they have taken to address the rising costs of medical malpractice through reform of state tort law. The following table summarizes the results of this survey (this table is in Microsoft Word format).

How States Rank On Medical Malpractice Reform
(Note: These rankings do not reflect the rate of malpractice premiums of the various states or the status of physicians; they are simply a ranking of the status of the tort law in each state.)

Passing States

Ten Points-

• California
• Colorado
• Maine
• Michigan
• Utah

Nine Points-

• Alaska
• Maryland
• Wisconsin

Eight Points-

• Hawaii
• Idaho
• Kansas
• Montana

Failing States

Seven Points-

• Delaware
• Florida
• Louisiana
• Massachusetts
• Missouri
• North Dakota

Six Points-

• Arizona
• Georgia
• New Hampshire
• New Mexico
• Texas
• West Virginia

Five Points-

• Connecticut
• Illinois
• Indiana
• Iowa
• New York
• Tennessee

Four Points-

• Alabama
• Arkansas
• Minnesota
• New Jersey
• Ohio
• Oklahoma
• Oregon
• South Dakota
• Washington

Three Points-

• Washington, DC
• Nebraska
• Pennsylvania
• Rhode Island
• Vermont
• Virginia
• Wyoming

Two Points-

• Kentucky
• Mississippi
• Nevada
• North Carolina
• South Carolina

Derek Hunter is a research assistant for Domestic Policy Studies at The Heritage Foundation. Interns Philip Brenner and James Thompson contributed to this report and collected the data and analyzed legislative tort reforms upon which the several states were ranked.

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Appendix: How Heritage Research Staff Ranked States On Medical Malpractice Reform

Overview

Each state and Washington, D.C., was given grades based on laws enacted dealing with the problem of tort reform. Tort reform legislation can encompass many different types of laws.

Therefore, each state was awarded points based on the scope of its tort reform laws.

All of the following categories were deemed relatively equal; therefore, each was assigned a value of 1 point: Immunity, Statute of Limitations, Expert Witness Rules, Periodic Payment of Damages, and Alternatives to Litigation.

Legislation limiting attorney's fees was deemed more important than those categories, and was therefore assigned a value of 2 points.

Limiting non-economic damages was deemed most important, and therefore was assigned the highest point value. In this category, the point value ranged from 3 to 5 depending on the depth of the limit. States limiting non-economic damages in medical malpractice liability cases to $1,000,000 or less earned 3 points. States limiting these damage awards to $500,000 or less earned 4 points. Finally, states limiting these damages to $250,000 or less earned 5 points. This was the only category in which different point values were awarded for different types of legislation.

In all the other categories, a state with any legislation at all dealing with the category would be awarded the point value. For example, a state limiting attorney's fees would earn 2 points, regardless of the limit. (Researchers acknowledge that this method of grading does not recognize the full extent of a state's legislation.)

Definitions of State Legislative Categories

Immunity: Any law that would give either physicians or the general population immunity from malpractice claims in certain situations (for example, a law giving physicians immunity from liability for ordinary negligence when volunteering at the scene of an emergency).

Statute of Limitations: Any law that would limit the amount of time a malpractice claim could be made, either from the date of injury or the date of discovery.

Expert Witness Rules: Any law limiting who may testify as an expert witness (for example, a law requiring that expert witnesses be licensed, practicing physicians).

Periodic Payment of Damages : Any law either requiring or allowing for the periodic payment of damage awards won in medical liability cases (for example, a law allowing a defendant in a medical malpractice case to pay any damage award over $100,000 over the span of a 10-year period).

Alternatives to Litigation: Any law providing for a means of settling medical malpractice cases other than through litigation (for example, a law allowing procedures for arbitration).

Limiting Attorney Fees: Any law that would limit the fees of plaintiff attorneys in medical malpractice cases. Usually limits are in percentage form, and the best limits provide for a sliding scale of maximum compensation an attorney can collect.

Limiting Non-Economic Damages: Any law that would limit the amount of non-economic damages a plaintiff can be awarded in a malpractice case. Non-economic damages include "pain and suffering" awards and, in many states, punitive damages.