August 2003

Non-economic damage limits influence
supply of physicians

States that have enacted limits on non-economic damages in medical lawsuits have about 12 percent more physicians per capita than states without such a cap, according to a study released by the U.S. Health and Human Service’s Agency for Healthcare Research and Quality (AHRQ).

The study is the first of its kind to associate caps on non-economic 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."

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 non-economic 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 complete AHRQ study can be found at http://www.ahrq.gov.

Source: Health and Human Services, www.hhs.gov

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