According to a study by Kenneth Thorpe, chairman of the health policy and management department of Emory University’s Rollins School of Public Health, malpractice insurance costs less in states that limit damage awards but does not explain why medical malpractice premiums increased more than 23% in states the do not have such caps.
The study found that in 24 states with some limit on damage awards, insurance premiums were 17% lower. Larger awards and settlements as well as declines in insurers’ investment income and a reduction in the number of insurers have contributed to premium increases. Nearly 8% of all awards now exceed $1 million, double the share five years ago.
Thorpe said that although a federal limit would “ultimately result in lower premiums,” he questions whether such a measure would benefit doctors and insurers at the expense of their patients.
More on the study can be found at: http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.20