Supposedly, the caps imposed by FS 766.118 discussed in parts 1 and 2 of this series, were designed to address a medical malpractice insurance crisis in Florida. Based on a report submitted by a taskforce set up by Governor Jeb Bush, the legislature claimed (in 2003) that the increase in medical liability insurance premiums has resulted in quality doctors leaving Florida, refusing to perform high-risk procedures or retiring early, thereby limiting the availability of health care. However, the Florida Supreme Court conducted reviewed the available data and has determined that the number of doctors available in both urban and rural areas has increased (and was increasing at the time the legislature enacted the statutory caps).
In addition, while many think of runaway juries inappropriately entering inconceivably large verdicts, studies revealed that this is by far the exception and not the rule. In fact in evaluating Florida cases which resulted in payments over $1,000,000, over a 14 year period, one study found that only 7.5% involved a jury verdict. Over 10% were resolved without a legal action ever being filed (reads: sometimes the doctors know and acknowledge that they made huge mistakes and willingly paid fair value). In fact, jury trials, constitute a very small portion of medical malpractice payments and settlements post-verdict tend to be significantly smaller than the original jury award.
The Center for Justice and Democracy reported that the so-called crisis is nothing more than an underwriting cycle. Every time the insurance industry cries crisis dig deeper and you’ll find a severe drop in investment income for those insurers compounded by underpricing of insurance premiums. In other words: the insurance industry was simply not making money due to causes wholly unrelated to malpractice claims (stock market, poor business decisions) and sought a scapegoat for which to blame their lack of profits.