The issue of medical malpractice caps is a divisive one in the legal, medical and political communities, and the state of Iowa is the latest to take it up. Proposed legislation in the Hawkeye State would limit juries to awards of $250,000 or less in non-economic damages. Supporters believe the caps are necessary to save healthcare in the rural parts of the state. Critics believe they pose a grave threat to justice.
Current law in Iowa already restricts non-economic damages to $250,000 but does allow for exceptions in the case of substantial disfigurement, loss or death. The new legislation eliminates those exceptions.
To take a brief step back, it’s important to clarify that a plaintiff can still win more than $250,000 in a personal injury case. However, those damages must be directly tied to financial losses, either in the form of medical expenses or lost income. The ability of a jury to assess so-called “punitive” damages is what medical malpractice caps are aimed at.
But critics of the caps believe that misses the mark. They point out that the financial value of a parent who stays at home with children is impossible to quantify. They argue that limiting the focus to potential earnings has the impact of making some people’s injuries more valuable than others—i.e., the CEO would get more in damages than the schoolteacher.
Finally, critics of the caps contend that they ultimately have the purpose of eliminating malpractice lawsuits altogether, because personal injury lawyers will not have the incentive to take them on. An attorney in these cases typically works on contingency, meaning they must win to get paid. The usual rate is one-third of the final award. It’s the prospect of the big payout that makes taking these cases attractive for lawyers.
Supporters of the caps believe otherwise. They argue that liability insurers are forced to drastically increase their rates to protect against the risk of a multi-million dollar jury award. This, in turn, puts economic pressure on medical offices. The burden can be particularly heavy on smaller practices—the kind which often serves rural areas, which are prevalent in Iowa.
The results are higher costs for medical care—spiraling insurance costs are seen by caps supporters as the engine behind out-of-control healthcare costs. In a worst-case scenario, doctors—often burdened by heavy medical school debt and unable to realize a profit—simply decide to leave private practice or go to a state where damages are limited. Again, that leaves communities dependent on a small provider out of luck. Critics of the caps counter that there’s no correlation between damages and healthcare costs.
Wherever you stand on the issue of medical malpractice caps, the debate is clearly not going away and Iowa is the latest battleground.