Obama, AMA, & Med-Mal Reform

Before President Obama's speech to the AMA yesterday, there was some speculation that he would offer a federal "fix" of punitive damages in medical-malpractice cases in return for the doctors' endorsing a so-called "public option" for health insurance (in reality, another government program in need of perpetual taxpayer bailouts).

My first reaction was: "How naive are the doctors?" Come on! Surely they realize that "Medicare/Medicaid/SCHIP for all" would erode private coverage and subject physicians to ever declining reimbursements and more control of their profession by Uncle Sam. Like similar government programs, these drawbacks would not cause it to "fail", but lead to perpetual demands for even more money and control. A federal cap on punitive damages, on the other hand, would be a fragile thing, constantly threatened by trial lawyers.

The AMA has endorsed legislation by Rep. Gingrey, a physician from Georgia, that would impose a cap of $250,000 on punitive damages - like California's MICRA. (The AMA website reports a stale version of the bill. The bill in the current, 111th, Congress, is H.R. 1086.)

As readers know from my postings on federal pre-emption of states' product-product liability law for FDA-approved medicines, I lie pretty far on the states' rights end of the spectrum when it comes to federalism in civil liability. And I lean heavily towards the same policy for medical malpractice.

H.R. 1086 asserts the interstate commerce clause, which I simply don't see relevent to medical care. Yes, the federal government pays for a lot of medical care, through Medicare, Medicaid, etc., but that is an unrelated problem. H.R. 1086 also preserves states' rights by allowing a state law that caps punitive damages at either a higher or lower rate than the proposed $250,000 to trump the proposed federal cap. (Many states do not have punitive damange caps, as I report in the Index of Health Ownership, using research by my colleague Lawrence McQuillan.)

So, a federal cap on punitive damages, as proposed by H.R. 1086, is not the worst thing since unsliced bread, but it still lets the "camel's nose under the tent." The important benefit of leaving medical-malpractice law to the states is that states with appropriate limits on the ability of trial layers to go wild will see more appropriate medical care and immigration of doctors from states with out-of-control med-mal.

The fact is, nobody know the "perfect" level of liability for med-mal punitive damages. Observing the behavior and movement of doctors in different states, in response to different reforms, allows every state to reform its laws as needed.