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Will malpractice awards climb in wake of court ruling?

by Lisa Owad
Feb 17, 2010


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Chart: Lisa Owad/MEDILL

Data: Illinois Department of Insurance

Although medical malpractice awards climbed in the years before Illinois put limits on them, opponents disagree on the impact of the recent Supreme Court’s ruling striking down the caps.   

The average award for emotional harm in medical malpractice cases increased 437 percent in the seven years leading up to creation of the 2005 law capping non-economic damages, according to data from the Cook County Jury Verdict Reporter. Rates were highest in 2004, the year before award caps were enacted, with an average award of $4.8 million.  

Physicians argue that high awards drive up insurance premiums and make health care more expensive.  

“When the cap was reinstated in 2005, premiums for Chicago physicians stabilized and even began to shrink,” said J. James Rohack, president of the American Medical Association in a statement after the court ruling. Before caps on damages, premiums rose steadily 10 to 12 percent a year between 1997 and 2005, Rohack said. 

The Medical Malpractice Act limited the amount victims could receive for emotional harm to $500,000 from doctors and $1 million from hospitals.The Illinois Supreme Court ruled the law  unconstitutional earlier this month. This was the third time the court ruled against medical malpractice award caps.

Critics of award caps say the averages don’t tell the entire story.

“A single larger case can skew those numbers,” said Peter Flowers, president of the Illinois Trial Lawyers Association. “So looking at [the award amounts] as an average, isn’t really a clear assessment.”

While the average award amount increased prior to 2005, state data show that only a small percentage of medical malpractice plaintiffs are awarded money. Only 4 percent of medical malpractice cases resulted in damage awards between 1998 and 2004, according to the Illinois Department of Insurance.

“Non-economic damages of any significance occur in a case of a terrible catastrophic event,” Flowers said. “It happens very rarely. It has very little impact on the overall system.”  

Bruce Ottley, a professor at DePaul University’s College of Law, also said the ruling would have only minimal impact since few plaintiffs are ever awarded such large damages.

“There are a lot of us that don’t think it will make a noticeable impact on costs,” Ottley said. “The caps [were] fairly substantial. Judgments above that are fairly rare.”  

However, cases that do not result in payout still have an impact, according to a 2005 study released by the Illinois State Medical Society and ISMIE Mutual Insurance Company. ISMIE is the largest liability insurance provider for Illinois physicians.

“Eighty percent of the claims filed against ISMIE Mutual policyholders result in no payment to the plaintiff,” the study said. However, between 2000 and 2005, ISMIE Mutual “paid over $150 million in defense costs for these non-meritorious claims.”