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J Contemp Health Law Policy. 1993 Spring;9:337-75.

Statutory caps: an involuntary contribution to the medical malpractice insurance crisis or a reasonable mechanism for obtaining affordable health care?


A medical malpractice insurance crisis occurred in the mid-1970s and mid-1980s evidenced by escalating malpractice insurance rates and increasing numbers of malpractice claims. Insurance companies maintained that the increase in insurance rates was necessary because of the sharp rise in the number of malpractice lawsuits, astronomical damage awards, and ineffective mechanisms to prevent and to eliminate nonmeritorious claims. Physicians responded by forming their own insurance companies, cancelling high-risk procedures, and orchestrating intensive legislative lobbying for tort reform. Insurance companies, physicians, and the legislature collaborated efforts to resolve this medical malpractice crisis. A national debate erupted regarding the proper way to address the medical malpractice insurance crisis. Insurance companies and physicians pressured state legislatures to reform liability laws that, in their opinion, permitted recovery of excessive damage awards by plaintiffs. Consumer groups and lawyers suggested tighter regulation of the insurance industry. State legislatures, in an attempt to remedy the perception that injured plaintiffs were overcompensated for their injuries, enacted "tort reform legislation," which included statutory caps on damages recoverable in medical malpractice actions. As a result of the extensive lobbying effort by physicians and insurance companies, twenty-seven states enacted statutes limiting recovery of damages in medical malpractice lawsuits. Lawyers responded by challenging state malpractice legislation on constitutional grounds, alleging violations of federal and state equal protection and due process clauses and the Seventh Amendment right to a jury trial. Opponents of the cap also asserted violations of state constitution provisions such as the "open courts" provision or the "special legislation" clause. To date, the state courts have held that statutory caps are unconstitutional. Statutory caps and other tort reform measures are extremely important in light of proposed health care legislation entitled the Health Care Liability Reform and Quality of Care Improvement Act of 1992 [the "Health Care Bill"]. This Comment critically examines the constitutionality of statutory caps on damages in medical malpractice actions. It focuses on the public policy behind the caps and the constitutional issues embodied in limiting an individual's recovery. It also analyzes the impact of the Health Care Bill on statutory caps. Part I outlines the medical malpractice insurance crisis, describes the statutory reforms and discusses the public policy behind tort reform. Part II examines the constitutionality of statutory caps and summarizes the arguments of the proponents and the opponents of these caps. Part III discusses the Health Care Bill and its impact on medical malpractice legislation with respect to statutory caps. This Comment concludes that a compromise must be reached that addresses both the growing health care insurance crisis and the protection of individual rights. The Health Care Liability Reform and Quality of Care Improvement Act of 1992 attempts to achieve this compromise.

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