California Medical Malpractice Initiative Qualifies For November 2014 Elections

Presidio Logo Color_smallCalifornia physicians will be facing an upcoming battle in the golden state (California) in the coming month’s. If Obamacare wasn’t enough to leave you shaking your head, a new initiative that aims to increase liability limits for physicians is coming to a ballot box near you. Physicians who practice in California are currently limited to $250,000 in pain and suffering damages that can be awarded to a plaintiff of a Medical Malpractice lawsuit. The ballot initiative hopes to increase this to $1,100,000.00 (1.1 Million) and it will be pegged to inflation so that it may increase as inflation does.

The effort to raise California medical malpractice liability limits has been going on for quite some time and consumer groups probably feel that consumers who have been beaten up by a slow economy may now be sympathetic to the cause. The liability limits were enacted by the Medical Injury Compensation Reform Act in 1975.  The new initiative – coupled with another ballot measure that would give the state’s elected insurance commissioner the power to reject health insurance rate increases is expected to produce a costly battle pitting lawyers against doctors, hospitals and insurance companies.

The measure also would mandate random drug and alcohol testing of doctors and would require that physicians check the state’s prescription drug database before prescribing drugs to curb abuse.

Opponents of the initiave include the California Medical Association and California Hospital Association. One of their key arguements is they feel the initiative would raise health care prices by driving up medical professional liability insurance costs. It is logical in our opinion,  that will be the case. If  Medical Malpractice Insurance carriers are required to pay out more for liability claims, they will eventually raise the rates physicians pay. It’s simple economics.

According to a study by Diedrich Healthcare, California Medical Malpractice lawsuit payouts were the third highest in 2012, only two states had higher payouts, New York and Pennsylvania.

Malpractice Insurance Industry Data

A total of $3.6 billion was paid out for medical malpractice lawsuits in 2012, and 48% of those payouts occurred in five states, according to Diederich Healthcare’s 2013 Medical Malpractice Payout Analysis. In 2012, there were a total of 12,142 medical malpractice payouts in the United States – accounting for one about every 43 minutes. The medical malpractice insurance company based its analysis on 2012 data from the U.S. Department of Health and Human Services’ National Practitioner Data Bank.

The states with the highest medical malpractice payouts were as follows: New York — $763,088,250; Pennsylvania  — $316,167,500; California — $222,926,200; New Jersey — $206,668,250; Florida — $203,671,100.

Settlements were responsible for the bulk of the payouts (93%), whereas judgments were responsible for only 5% of the payouts. States with the lowest per capita malpractice payouts were Texas, North Dakota, Wisconsin, Mississippi and Indiana.

Malpractice allegations were primarily related to diagnosis (33%), followed by surgery (24%), treatment (18%) and obstetrics (11%). Diagnosis-related malpractice allegations accounted for more than $1 billion in payments — 20% of all payments for this type of allegation were related to failure to diagnose. Women received more payouts than men (57% vs. 43%). For both sexes, patients aged 40 to 59 years had the highest number of payouts by age at 39%.

A similar proportion of payouts were awarded to both inpatient (45%) and outpatient (41%) malpractice allegations, and 9% of payouts were attributable to both inpatient and outpatient treatment.

In terms of injury severity, 31% of payouts were awarded in cases that involved a patient’s death, 19% were in cases that involved significant permanent injury and 18% were for cases that involved major permanent injury. Only 0.4% of malpractice payouts were related to insignificant injury, whereas 1% was based on emotional injury only, and 3% were based on minor temporary injury.

Despite an increase in the number of payouts awarded from 1998 and 2001, the monetary value of malpractice awards has been dropping steadily since 2003 –  2012 payouts were 3.4% lower than in 2011.




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