Law360, Los Angeles (November 05, 2014, 1:18 AM ET) — California voters on Tuesday rejected a measure that would have raised the cap for medical malpractice damages to $1 million from $250,000 and subjected doctors to drug tests, ending a campaign that had been characterized as pitting doctors against lawyers.
With 68 percent of voters rejecting the proposal and 24 percent of precincts reporting, the Los Angeles Times late Tuesday night projected a loss for Proposition 46, known as the Troy and Alana Pack Patient Safety Act. The measure trailed 871,034 votes to 1,849,885 in early results.
The proposition had been touted by consumer groups as a way to protect people from dangerous doctors who abuse their access to prescription drugs and who themselves may be under the influence of drugs or alcohol on the job.
But opponents — including hospitals, insurers and doctors — warned of the potentially steep cost to businesses, the government and taxpayers of raising the malpractice cap and adding the burden of drug testing to practitioners. They said it would exponentially increase the amount of medical malpractice litigation, benefiting lawyers and virtually no one else.
“Proposition 46 would increase state and local government health care costs by hundreds of millions of dollars annually,” Matt Cate, executive director of the California State Association of Counties, said in an advertisement that ran statewide. “Taxpayers like us will be on the hook for it.”
The reform measure, authored by a father whose two children were killed by a driver allegedly addicted to pain medication, wouldn’t impact punitive damages, but the new cap would have been tied to inflation and periodically adjusted, according to the act’s text. The cap addressed only noneconomic damages.
Trial attorneys, including the Consumer Attorneys of California, backed the initiative in a campaign that pitted trial lawyers against doctors, hospitals and medical malpractice insurers.
“With medical negligence the third leading cause of death in the U.S., the Troy and Alana Pack Patient Safety Act is needed to deter malpractice, weed out substance-abusing M.D.s and thwart prescription drug abuse,” the CAOC said in a statement urging voters to approve the measure.
The proposition set out to reform the state’s Medical Injury Compensation Reform Act, which had been designed to keep medical malpractice liability insurance premiums for health providers down by reducing their risk of liability. But proponents of the reform measure said the low cap deters plaintiffs attorneys from taking cases and should be raised to align with decades of inflation.
The bill’s opponents pointed to the potential steep cost of the cap, saying it would raise health care costs up to $1,000 a year for a family of four.
That number cites the high range of the findings of a study by the nonpartisan Legislative Analyst’s Office, which found that changes under Proposition 46 would result in an increase in medical malpractice costs ranging from 5 percent to 25 percent.
Medical malpractice costs represent about 2 percent of total health care spending, so raising the cap would likely increase total health care spending by 0.1 percent to 0.5 percent, according to the LAO.
“There would likely be a very small percentage increase in health care costs as a result of raising the cap,” the LAO wrote in a September report on the measure. “However, even a small percentage change in health care costs could have a significant effect on government health care spending.”
The group estimated state and local government health care costs in raising the cap would range from tens of millions to several hundred million dollars annually, according to the report.
–Additional reporting by Erin Coe. Editing by John Quinn.