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Prop. 46: Drug-testing doctors and raising the cap on ‘pain and suffering’ damages in medical malpractice cases

Stephen Sugarman, Roger J. Traynor Professor of Law | October 31, 2014

Described as a “patient safety” measure, this initiative would do two primary things. First, and the central reason for it being put on the ballot, Prop. 46 would increase from $250,000 to a little over $1 million the amount of money that can be awarded for “pain and suffering” to victims who successfully win medical malpractice cases, and in the future that “cap” would be raised along with increases in the cost of living. Second, and simplifying a bit, Prop. 46 would subject California doctors to a random drug testing regime.

I will only say a few words about the latter, as it is outside my area of expertise. It is true that some doctors are addicted to drugs and as a result are poorly performing their services; and in some cases they are badly injuring their patients. It is also true that some doctors are abusing their role by prescribing addictive drugs to certain patients when they should not be doing so.

Whether the regime contemplated by Prop. 46 is the right way to deal with these problems is another matter. Maybe so. Probably, a legislature seriously interested in doing something substantial about these problems could come up with a much better regime. Will that happen? Probably not, but maybe.  My point is that one could sensibly be against, or possibly for, Prop. 46 solely because of the drug testing part of the initiative. I leave that issue to others.

Increasing the cap

I will focus instead on the portion of Prop. 46 that would increase the cap on pain and suffering awards.

As of early October, about $12 million had been raised in support of the measure – most significantly from plaintiff personal-injury lawyers and their friends. And more than $50 million had been raised by opponents – virtually the entire healthcare industry and its friends. While these opponents are against the drug testing part of the plan, they seem most upset about the projected hike in malpractice awards.

Yet focusing on the increase in pain and suffering awards alone, there is considerable merit to the proposal.

Forty years ago, during Gov. Jerry Brown’s first term in office, doctors won a big victory over lawyers. Since then, those who commit medical malpractice have all sorts of legal advantages over everyone else who is sued for wrongfully injuring other people. Most importantly for purposes of Prop. 46, the amount of pain and suffering damages that can be recovered in medical malpractice cases was capped at $250,000. At the time, many thought this was a reasonable ceiling.

Yet even then it seemed odd to many that in California if a doctor botches surgery and makes you a quadriplegic, your pain and suffering damages would be $250,000. But if someone else carelessly makes you a quadriplegic (like a bus driver or a defective product), you are very likely to win several million dollars in pain and suffering damages. Nonetheless, our California Supreme Court upheld this difference in treatment.

Over the years, the real purchasing power of $250,000 has obviously decreased. Had the original legislation tied that figure to inflation, it would be a bit over $1 million today. Many think this is only fair, and that is what Prop. 46 would do.

International comparisons

In Canada, for example, the Canadian Supreme Court long ago capped pain and suffering damages at $100,000 to be adjusted for inflation; that figure is now more than $300,000. To be sure, $300,000 is closer to $250,000 than to $1 million. But there are many differences between the U.S. and Canada, one of which will be emphasized here.

In Canada, if you win a lawsuit against a careless doctor, the doctor has to pay your legal fees (or at least most of them). In the U.S., the victim has to pay his or her legal fees out of the total award that is made. This makes a huge difference.

My research shows that in serious injury medical malpractice cases in California, the victim’s legal fees generally take all of the pain and suffering damages plus a big chunk of the damages that were supposed to pay for past and future medical care and a lifetime of lost earnings. This is not true in Canada. Nor is it typically the case in California when someone has been rendered quadriplegic by a non-medical wrongdoer.

Put differently, on a net basis, California victims who are very seriously injured by medical malpractice are worse off in terms of their recovery for pain and suffering than those in 20 European Union countries and several other countries around the world that I have studied. Even in the least generous Western European nations (for this purpose) like Greece, Denmark, Portugal and Sweden, very badly disabled victims of negligent conduct at least wind up with some net recovery for pain and suffering and do not have to dip significantly into the rest of their recovery to pay their lawyer as happens in California today.

It probably would be a good idea for California to change our law in a number of ways, including having a losing defendant in personal-injury cases pay the legal fees of the victim. But that is not on the table.

What’s a fair sum?

If our law were changed as Prop. 46 envisions, then our quadriplegic victim today would recover just over $1 million in pain and suffering damages that would probably be enough to pay his or her legal fees with a small amount left over. That would make California more like Denmark and Sweden (and far less generous than countries like Italy, Germany and England). That seems a lot fairer than the current regime.

Opponents claim that Prop. 46 would raise healthcare costs for all of us, since those in the healthcare professions would have to pay more for their medical malpractice insurance. That is true.  But we are probably talking about an annual increase in the cost of health insurance of less than $10 per person. Opponents’ claims of $250 per person seem wildly exaggerated.

Many would probably feel that $10 a year is a fair sum to contribute in order to assure that if you were seriously injured as a result of medical malpractice, you would be awarded enough both to pay your lawyer and cover your lost income and medical expenses, as well as having a modest sum left over for your pain and suffering. Even with this increase in the “cap” remember that, as a bow to the healthcare industry, your recovery would still be considerably less than it would be if some other careless, well-insured party rendered you quadriplegic.

Opponents also claim that doctors facing increases in malpractice insurance costs because of Prop. 46 will retire or leave the state in droves. Don’t believe them. Past experience tells a different story. In due course, as just noted, those higher premiums will be passed on to employers and consumers in the form of very small increases in the cost of health insurance.