California’s hotly contested Proposition 46 includes a provision that raises the state’s cap on noneconomic damages in medical malpractice cases from $250,000 to $1.1 million.

A new study, released this week by Health Affairs, found that a $250,000 cap on noneconomic damages for medical malpractice reduced average payments by 20 percent.

The study looked at the impact of medical malpractice reforms on the average size of malpractice payments nationally in several physician specialties over 25 years, comparing how the effects differed according to the size of the cap. 

It found that, overall, noneconomic damages caps reduced the average payments by 15 percent compared to no cap. On the other hand, a less restrictive $500,000 cap had no significant effect on average.

The authors also found specialty variations, with the largest impact involving pediatricians and the smallest for claims of surgical subspecialties and ophthalmologists.

“For the proposed California ballot initiative, our findings suggest that it would lead to about a 20 percent increase in average indemnity payments, with larger increases in obstetrics and in pediatrics,” said lead author Seth Seabury, associate professor of research at the Leonard D. Schaeffer Center for Health Policy and Economics and the Keck School of Medicine at USC.

A national sample

The authors analyzed a national sample of malpractice claims for the period 1985 to 2010, merging that information with data on state liability reforms. One of the comparisons made was how average payments in 10 different specialty categories differed according to the restrictiveness of the cap, making this the first study to look at how malpractice caps influence specific physician specialties differently.

Damages for pediatrics claims dropped the most — more than 37 percent — under a $250,000 cap, followed by obstetrics and gynecology (-32.9 percent). The least affected areas of practice under that cap was ophthalmology (-6.9 percent) and anesthesiology (-12.4 percent)

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“We found that specialties like neurosurgery, which have high rates of malpractice claims but award sizes that are average in magnitude, were less affected by damage caps than a field like pediatrics, which is known to have the lowest rates of malpractice suits but among the largest average malpractice awards,” said study author Anupam Jena, assistant professor of health care policy and medicine at Harvard Medical School and a physician at Massachusetts General Hospital.

Eric Helland, William F. Podlich Professor of Economics and George R. Roberts Fellow at Claremont McKenna College and the RAND Corp., was a co-author on the study, which was supported by the RAND Institute for Civil Justice, the National Institute on Aging and the National Institutes of Health.

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