Abstract

The United States is in its fifth year of what is now widely referred to as “the new medical malpractice crisis.” Although some professional liability insurers have begun to report improvements in their overall financial margins, there are few signs that the trend toward higher costs is reversing itself - particularly for doctors and hospitals. In 2003-2004, the presidential election and tort reform proposals in Congress brought heightened public attention to the need for some type of policy intervention to ease the effects of the crisis.The darling of tort reformers at both the federal and state levels has been legislation to limit, or “cap,” damages awarded to plaintiffs in malpractice cases. Health care provider groups, liability insurers, and the Bush Administration have all seized on the example of California's MICRA law, which since 1975 has capped noneconomic damages in malpractice cases at a flat $250,000, as the path to financial recovery.