Editorial: Report a rap on caps

Thursday, June 2, 2005 | 9:04 a.m.

In 2002 many doctors threatened to leave Nevada unless a law was passed capping jury awards for non-economic damages in malpractice cases. They said this was the only way to stop the escalating costs of their malpractice insurance. A legislative special session that year set a cap of $350,000, except in cases of gross negligence or "exceptional circumstances." Voters last November, afraid of losing their doctors, approved a ballot question removing the two exceptions.

This week a report, based on statistics from a federal malpractice data base, was published in the journal Health Affairs. The statistics "suggest that ... large jury awards ... have not been the key drivers" of the malpractice crisis, the report stated.

The report did, however, suggest a link between the premium increases imposed on doctors by insurance companies, and the insurance companies' declining investment revenues on the bond market. The report is not definitive, but it is more evidence that caps on victims are not the solution.

President Bush favors a national cap of $250,000. Before such a proposal can be taken seriously, the insurance industry should come under federal regulation. Currently, it's regulated by states, which do not have the resources or the will to thoroughly investigate premium increases. Insurance companies should be required to fully justify their premium increases -- before a federal panel that has the resources to thoroughly investigate them.