Liability Reform

What is the issue?

Medical liability insurance premiums are soaring to the highest rates since the mid-1980s. A 2002 AAN survey of 400 neurologists showed that mean annual premiums increased 35 percent in 2002 and an additional 23 percent in 2003. Fifty percent of the respondents made changes to their practice related to the liability crisis, including scaling back their practices and closing their offices.

Evidence suggests these increases in premiums are due to several factors:

• According to Jury Verdict Research, more than half of all jury awards top $1 million and the average award has increased to $3.5 million.
• Over 75 percent of malpractice lawsuits are closed without payment, and in 83 percent of those cases, the accused physicians are found not to be negligent.
• The average cost to defend oneself in a case that is settled without payment now approaches $94,000.

Why is it important?

The high cost of liability insurance trickles through the healthcare system in problematic ways. For example, almost four in five physicians report they order extra and often unnecessary tests to avoid legal scrutiny. The federal government estimates that over $70 billion a year could be saved if physicians did not feel compelled by the threat of lawsuit to practice this so-called "defensive medicine."

What is the Academy's position?

The Academy has called for MICRA-style reforms, to include:

• Caps on non-economic ("pain and suffering") damages for plaintiffs of no more than $250,000
• Alternative courts to reduce lawsuit-related costs and delays
• Tighter standards for expert-witness review
• Reimbursement of defendant court costs when cases are overpursued??

What can you do to help?

The Academy has developed an advocacy toolkit (to the right) to help you advocate on this important issue.