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Study Finds Physician Supply Increases in States with Caps on Malpractice Lawsuit Awards, with the Greatest Impact in Rural Areas

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Press Release Date: May 31, 2005

States that have capped malpractice lawsuit awards have seen a larger growth in the number of practicing physicians than those States without such caps, according to a new study from HHS' Agency for Healthcare Research and Quality (AHRQ).

Between 1970 and 2000, the number of physicians per 100,000 residents more than doubled in the 13 States that enacted caps on non-economic damages during the 1980s, compared to an 83 percent physician growth rate in the 23 States that didn't cap malpractice awards before 2000, according to the authors, AHRQ's William E. Encinosa, Ph.D., and Fred J. Hellinger, Ph.D. The study is being published today on the Health Affairs Web site at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.250.

"Malpractice litigation reforms can ensure better access to quality care for all Americans," HHS Secretary Mike Leavitt said. "Our Nation's health care system should no longer be held hostage to frivolous medical lawsuits, which only drive up health care costs, lead to defensive medicine, and make it harder for America's doctors to provide safe and accessible care."

Drs. Encinosa and Hellinger found that the dollar amount of the cap also had an impact on the supply of physicians, especially in rural areas. Between 1975 and 2000, the growth in the median number of rural physicians per 100,000 residents in States with caps of $250,000 was 9 percent higher than in States with caps above $250,000. Currently, 27 States have caps on malpractice awards; of those, five States have caps with a $250,000 limit.

Surgeons and obstetrician/gynecologists—who are most likely to be sued and who often pay the highest malpractice premiums—were the specialists most likely to be affected by caps of $250,000. The median number of surgical specialists per 100,000 increased by 41 percent for States with caps of $250,000, but only by 31 percent for States with caps above $250,000. For obstetrician/gynecologists per 100,000 women ages 15 to 44, the increases are 61 percent in States with caps of $250,000 and 49 percent for States with higher caps.

"This study contributes to the growing foundation of evidence underpinning efforts to reform malpractice laws in this country," said Carolyn M. Clancy, M.D., director of AHRQ. "This research will help inform States as they work to balance the concerns of physicians and the need to ensure access to services for their citizens."

Drs. Encinosa and Hellinger used county-specific data from the Area Resources Files maintained by HHS' Health Resources and Services Administration. They compared physician supply in 49 States, excluding Alaska and the District of Columbia, from 1985 to 2000 to study the impact of the malpractice caps. Caps generally increased physician supply by 2 to 3 percent three years after adoption, after accounting for other factors that impact physician supply. These other factors included fixed differences across counties, such as socioeconomic, political, cultural, and regulatory factors, as well as factors that could impact the demand for physicians, including HMO and Medicare enrollment, whether the county has a medical school, disease rates, and the county's birth rate. In addition, the authors also accounted for the effects of four other State malpractice reforms, including collateral source rule reform, prejudgment interest reform, joint and several liability reform, and caps on punitive damages.

For more information, please contact AHRQ Public Affairs: (301) 427-1855 or (301) 427-1865.


 

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