HB 1068: Cap Medical Malpractice Awards at $100K

Rep. Mike Verchio (R-30/Custer) is putting medical malpractice and tort reform on the Legislature's agenda. Verchio's House Bill 1068 would reduce South Dakota's cap on total general damages for injury or death from medical malpractice from $500,000 to $100,000.

$100,000: that's less than half the average annual salary for doctors in South Dakota... or perhaps the price of Dr. R. Blake Curd's garage.

Before reducing the cost of failure for doctors, Rep. Verchio and his colleagues might want to consider the following:

• Medical malpractice makes up 1.5% to 2% of U.S. health spending.
• Texas caps medical malpractice damages at $250K, yet McAllen, Texas, has one of the highest per capita health care spending rates in the country.
• Most malpractice lawsuits have merit:
  
  

  Eighty percent of malpractice claims involve significant disability or death, a 2006 analysis of medical malpractice claims conducted by the Harvard School of Public Health shows, and the amount of compensation patients receive strongly depends on the merits of their claims. Most people injured by medical malpractice do not bring legal claims, earlier studies by the same researchers have found [Tom Baker, "Liability = Responsibility," New York Times, 2009.07.11].

  
  
• In South Dakota, the average time between a malpractice "incident" and a patient receiving payment was 3.26 years (in 2006... and that's the fastest average time in the nation). Three years is a long time to rack up lawyer bills. $100,000 might not cover that, and folks who really have been harmed by medical mistakes might not be able to get a lawyer to help them.
• From 1990 to 2006, South Dakota reported fewer than 400 medical malpractice payments against doctors. That's 25 a year.
• In 2006, the median malpractice payment to patients in South Dakota was $75,000, the third lowest in the country, tied with California. A few whoppers must have skewed our mean payment all the way up to $422,000... but these numbers still suggest that more than half of the patients receiving awards don't even reach HB 1068's proposed low cap, let alone the current cap of $500K.
• 75.4% of South Dakota hospitals registered with the National Practitioner Data Bank have never reported a malpractice payment.

These statistics don't make a slam-dunk case against HB 1068. Still, I get the impression Rep. Verchio is trying to solve a problem that just isn't that big in South Dakota. I can more easily see how capping damages at $100,000 would fail to make a big dent in health care costs and only make it harder for patients to hold hospitals accountable and get justice when harmed.