Insurance Journal Reports on Two Rand Studies
The Insurance Journal, an influential publication for the insurance industry, recently published the findings from two new studies associated with RAND Corporation. The first concerns how raising the bar for medical malpractice claims affect the practice of defensive medicine. We wrote about that study here. The Insurance Journal reported on another RAND study involving caps on non-economic damage —on the average size of medical professional liability (MPL) insurance claim payments, and also compared how the impact differs according to the dollar amount of the cap. Unsurprisingly, the study found that “overall, non-economic damage caps reduced average payments by $42,980 (15 percent), compared to having no cap at all. A $250,000 cap reduced average payments by $59,331 (20 percent), and a $500,000 cap had no significant effect, compared to no cap at all.” Of course, a cap on non-economic damages would be expected to lower payment rates. The more important question however regards the equity in capping non-economic damages. Any arbitrary cap on non-economic damages fails to account for the particular circumstances involved in each medical malpractice case. Each malpractice case is different as is the suffering and impact each case has on a victim of malpractice. Treating each case as if they were equal in terms of suffering and non-economic loss is a diminution of justice and fair play.
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