By Jacob Barker
Premiums collected by medical malpractice insurers have dipped by 28 percent since 2004, the year before Missouri lawmakers lowered a cap on noneconomic, or "pain and suffering," damages in medical malpractice cases.
In the wake of the Missouri Supreme Court's decision declaring the caps unconstitutional, that trend likely will reverse, medical professionals say.
"We're alarmed that this is going to bring back, if you will, the bad old days," said Rick Royer, president of health care consulting firm Primaris and a contract specialist for local physicians group Missouri Medical Affiliates.
The 4-3 ruling on July 31 overturned a $350,000 cap on pain-and-suffering damages imposed in 2005. Since the cap took effect, premiums declined from $192.3 million in 2005 to $145.3 million in 2010, according to a 2011 report from the Missouri Department of Insurance.
The losses covered by malpractice insurers have fallen as well, from a high of $167.9 million in 2002 to $44.3 million in 2010.
Premiums have held steady since the caps were lowered from an inflation-adjusted $579,000 in 2005, said Raman Puri, president of Magnolia Critical Care & Internal Medicine. He expects premiums, and practices such as his that rely on a high number of patients covered through Medicare will be especially squeezed, he said. "Insurance companies never bring anything down, you know."
The ruling's effect on patients is uncertain. Most of the savings associated with caps go to the insurers and to doctors, Royer said. But "if you look at the enormous pressure on medical costs, this certainly doesn't help," he added. "There's no way."
The bigger issue could be insurers refusing to cover doctors in fields at high risk of lawsuits. In the early part of the past decade, Royer said, there was a "malpractice crisis," during which there was a shortage of physicians and it was extraordinarily expensive to get malpractice insurance.
Indeed, payouts were more erratic before the caps. Insurer payouts leapt from $79 million in 2001 to $167 million in 2002, according to the state report.
But attorneys say they file very few malpractice cases anyway, and they point to injury cases that aren't litigated because of the expense and the cap.
"When you have a $350,000 cap, it takes tens of thousands, if not $100,000, to process a case," said former Missouri Bar President Skip Walther, who said he has not litigated medical malpractice cases. "A lot of lawyers are going to say, 'No, that doesn't make any sense.'"
Noneconomic damages, Columbia personal injury attorney Wally Bley noted, tend to mostly affect children, the elderly and other classes who aren't losing wages because of a medical mistake.
"There have certainly been cases that my firm has not been able to take because there have been limited noneconomic damages," he said. "We're so selective in the medical malpractice that we take. We only take about 1 to 2 percent of the cases we get called on. I don't expect that to change at all."
Columbia attorney Hamp Ford, who specializes in professional liability defense, said he expects the number of medical malpractice cases filed to increase. Absent the cap, he noted, there's a lot more room for negotiation of a settlement.
"There's a lot more to the matter of claims made than verdicts," he said. "Most cases are resolved by, after discovery, parties reaching some sort of resolution of the case or the case being abandoned completely."
Reach Jacob Barker at 573-815-1722 or e-mail email@example.com.