July 18, 2006

From the Agency for Healthcare Research and Quality newsletter:

A new AHRQ study in the American Journal of Public Health indicates that state laws limiting malpractice damage awards reduce overall state health care expenditures. The report estimates that the average reduction in health expenditures for states with caps on malpractice damage awards is $92 per capita (or 3 percent to 4 percent) over the period of time that the cap has been in place. The study specifically examines noneconomic damage caps—that is, damage caps for pain and suffering as opposed to economic caps that limit awards to cover direct economic outlays in a malpractice suit. The study, entitled, "The Impact of State Laws Limiting Malpractice Damage Awards on Health Care Expenditures," was conducted by AHRQ researchers Fred Hellinger, Ph.D., and William Encinosa, Ph.D. The final recommendations of the study state that future studies should expand the analysis to focus on whether the level of damage caps relates to health care expenditures; the variation of the effectiveness of these laws across States; and whether or not malpractice tort reform law is related to poorer health outcomes.