Physicians flock to states with lawsuit damage caps

States that have enacted limits on noneconomic damages in medical lawsuits have about 12 percent more physicians per capita than states without such a cap, according to a study released July 7 by the Department of Health & Human Services' Agency for Healthcare Research and Quality.

The study is the first of its kind to associate caps on noneconomic damages with increased physician supply. It looks at the growth of physician supply since 1970, before any state had enacted caps, and finds that physician supply has grown more in states with caps than in states without caps.

"Our broken medical litigation system is affecting patients' ability to find a doctor," HHS Secretary Tommy G. Thompson said. "This study confirms and quantifies the association between reasonable limits in medical lawsuits and the supply of physicians available to treat patients who need them. It is critical that we fix this broken litigation system now. In the current system, the fear of excessive awards stimulates wasteful defensive medicine and deters doctors and hospitals from identifying and addressing medical errors, thus increasing costs and decreasing quality."

The study analyzes state experiences over the past 30 years, and adjusts for the impact of multiple factors that are believed to affect physician supply (such as per capita income and physician residency training programs). According to the study's authors, Fred Hellinger, PhD, and William Encinosa, PhD, "these findings demonstrate that state laws limiting noneconomic damages in medical malpractice cases increase the number of physicians who practice in the states."

The authors find that by 2000, states that had enacted caps had a significantly higher number of doctors per 100,000 county residents (135) compared to states that didn't enact caps (120). By contrast, in 1970 there was no statistically significant difference between states in their per capita supply of physicians.

"The robustness of these findings is quite remarkable," said Dr. Carolyn M. Clancy, director of AHRQ, which sponsored this research.

"Even when adjusting for numerous state characteristics, states with caps had a significantly higher number of doctors per person compared to states that didn't enact caps," Clancy said.

President Bush has proposed a framework for improving the medical litigation system, placing limits on noneconomic damages, as has been enacted in many states.

In addition, HHS is devoting new efforts to improving quality of care and reducing medical errors.

The complete AHRQ study can be found at www.ahrq.gov/research/tortcaps/tortcaps.htm.