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The Schultz Perspective (February 9, 2023)

The Schultz Perspective by Senator Jason Schultz

We’ve all heard of malpractice cases in which health care providers have made mistakes and caused harm and suffering.  Sometimes the damage can last a lifetime.  When a lawsuit is filed for damages, the monetary award comes from three different categories:

Economic damages are those damages that are actually quantifiable: Wages that were lost because of the injury, loss of future earning capacity, medical bills, etc.  A plaintiff who wants economic damages must come forward with actual evidence to support these awards. These damages are not subjective.

Noneconomic damages are an amorphous category of damages that is left to the subjective and often arbitrary feelings of the eight jurors who happen to be selected for the trial.  These damages, which include categories such as “pain and suffering,” are so subjective and arbitrary that, for the very same injury, one jury might award a plaintiff $50,000 in non-economic damages and another jury might award $1 million. The variation depends on the emotions of the jurors and is often influenced by the dramatic arguments of trial lawyers.

Punitive damages are damages that are designed to punish egregious and reckless conduct.  Specifically, under Iowa code, the jury can award punitive damages if the defendant’s actions “constituted willful and wanton disregard for the rights or safety of” the plaintiff.” Iowa Code § 668A.1.

For years health care providers such as hospitals, physicians, or any health care provider have pointed out that Iowa’s medical liability laws are their greatest concern.  It causes them higher than average insurance premiums, challenges in recruiting physicians, and pushes them to settle cases that are easily defensible, but could spin wildly out of control due to the uncapped category involving emotion.

The Legislature has wrestled with this issue for six years and we are trying again.  The bill we passed places a $1,000,000 cap on the noneconomic damages for doctors and $2,000,000 for hospitals. The bill leaves economic and punitive damages uncapped.  There is an inflation escalator so the cap moves up over time and the value of the cap doesn’t fall in real terms. Costs to be considered under economic damages are also updated by including the cost of dependent childcare are now to be included.  Our society is changing, and this is a good addition.

This bill is happening due to the growing trend of extreme awards being granted by juries in the noneconomic damages category.  There is a growing trend by trial lawyers making huge opening demands in noneconomic damage and juries are following.  Iowa’s current laws allow any number and studies show the higher the initial demand, the higher a victorious award will be.

Doctors and hospitals who have done nothing wrong are feeling the effects, and this then impacts Iowans across the state.  Iowa hospitals are seeing required medical malpractice insurance premiums grow faster than in states with noneconomic damages caps.  OB/GYNs, birthing, emergency rooms, and residency training programs are especially hard hit.  These services become too expensive to offer, and we see our rural delivery rooms closing as young mothers and their families have to travel farther to get care.  Even more concerning is the new pattern of insurance companies not even offering insurance policies for certain specialties.  Local hospitals tell me they can neither afford or access liability insurance over certain levels around $20,000,000.  If they loses a judgement for much over that, they may have to declare bankruptcy.

Hospitals are also seeing recruitment suffer as physicians and specialists avoid Iowa and practice in surrounding states.  One current senator tells of his medical emergency where he was examined in Council Bluffs but was transferred to Omaha to the same medical system.  The specialist couldn’t come to Iowa due to the higher cost of working on this side of the river.  Western Iowa hospitals have a hard time recruiting doctors when they can work in Nebraska or South Dakota instead and have us drive to them.

Surrounding state have already addressed this issue and that creates our disadvantage.

  • North Dakota – $500,000
  • South Dakota – $500,000
  • Nebraska – $2.25M total damage cap
  • Missouri – $450,098 Non-Catastrophic/ $787,671 Catastrophic
  • Illinois – $500,000 (Overturned by State Supreme Court)
  • Wisconsin – $750,000

Further, 28 states in the country have similar caps on noneconomic damages or on total damage awards.  This problem isn’t new, and it is nationwide.  We need to join the states who have addressed unlimited awards for emotional damages.

Opponents, led by trial lawyers who receive a large fraction of awards, argue against caps.  They claim the patient has a constitutional right to a jury giving as much award money as they choose.  I love our US and Iowa Constitution, but that doesn’t seem correct.  Iowa law limits criminal charges and sentences when a defendant is found guilty.  Juries receive instruction from the judge about their duties under the law before they go into deliberation.

It is a sign of the times that not having a cap on noneconomic damages worked for decades but now must be capped.  Certainly, our culture has become more receptive to emotional arguments and will continue to be even more so.  Trial lawyers have perfected their strategies and study the best places to practice law and market their services.  One hugely successful trial lawyer places a “trophy board’ of huge awards won on the front page of his website.

Medical patients who suffer loss have every right to seek damages.  It is one of the mechanisms that push providers to be more careful and to make patient safety a priority above all others.  But accidents happen, and sometimes a patient’s body doesn’t respond as predicted.  You should be fully restored economically, including future expenses.  If a provider causes damage and covers up the reason or lies, they should be punished economically and there should be no cap.

Western Iowa is seeing fewer medical services, and having to travel farther to access what most take for granted.  I’m working to remove this challenge, hoping it helps keep our delivery rooms and emergency services open for business.

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