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Impact of Malpractice Caps on Macroeconomics

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Summarize the impact that placing caps on Medical Malpractice will have on the macroeconomic system.

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https://brainmass.com/health-sciences/health-insurance/impact-malpractice-caps-macroeconomics-40695

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Background Information

Let's look at some background information first for a basic grounding of the events leading up to caps placed on the Medical Malpractice. This often gives a good indicator on whether the end results will have a positive or negative overall effect.
Malpractice Caps Medical Malpractice Reform on February 5, 2003, representative Jim Greenwood (R-PA) introduced the Help Efficient, Accessible, Low Cost, Timely Healthcare (HEALTH) Act of 2003. This bill would reform the nation's medical liability system by enacting a three-year statute of limitations, permitting evidence of collateral source benefits and limiting non-economic benefits to $250,000. This bill passed the House on March 13, 2003 by a vote of 229-196. The White House has endorsed similar legislation. The medical malpractice reform effort faces more difficult obstacles in the Senate where threats to filibuster the bill would require proponents to produce 60 votes to cut off debate. One of the few Senate Democrats who support some form of medical malpractice reform, Senator Dianne Feinstein (D-CA) had been negotiating with the Republican Majority Leader, Senator Bill Frist (R-TN), and Senator Mitch McConnell (R-KY) on compromise legislation which would have raised the $250,000 limit in the House bill to $500,000. However, on March 27, 2003, Senator Feinstein announced she was giving up on trying to back compromise legislation because of opposition to the higher caps by physician groups.

For a list of caps by state see p. 83 http://etd.lib.fsu.edu/theses/available/etd-07122004-100943/unrestricted/DissertationText.pdf In 2002, fault-based third party liability claims - economics 51.3 billion dollars and non-economic 55.9 billion US dollar. With such high figures it seems that placing caps on Medical Malpractice through legislature may have been imperative and have a positive outcome for the macroeconomic system, however that does not seem the case.

Causes of the Crisis leading to the Caps In looking at the reported causes of the crisis, helps us envision the potential long-term effects on the macroeconomic system - of capping malpractice expenditures. The following information is based on the testimony received in 2002 by the Florida Governors Select Task force of Healthcare Professional Liability Insurance on what started the crisis and, which ties into the impact of the caps in the future. It is hoped that the caps will act as a deterrent for the following situations that may have lead to the crisis:

Physicians
-Rising frequency and severity of cases.
-Rising severity of claims and severity of jury awards.

Insurers
-Rising ...

Solution Summary

Summarizes the impact that placing caps on Medical Malpractice will have on the macroeconomic system. References and supplementary articles on the topic are also provided,

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