MEDICAL MALPRACTICE AWARD CAP AIDS INSURANCE INDUSTRY HERE Series: THE CONTRACT AND YOU SIDEBAR

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MISSOURI'S NINE-YEAR experience with capping medical malpractice awards offers lukewarm support for the effort in Congress to limit court awards to patients hurt by sloppy medical care.

After Missouri passed its cap in 1986, malpractice insurance premiums for doctors stabilized, and the number of frivolous suits appeared to decline. But other results were not entirely expected. More claims have gone to court, and jury verdicts have gone up.

Altogether, the biggest beneficiary appears to have been the insurance industry.

In Congress, the original Contract with America proposal did not include a cap on court awards for "pain and suffering" - the big money in malpractice suits. But doctors, hospitals and malpractice insurers have prodded Congress to include the cap in an amendment.

Supporters of malpractice caps say runaway awards have caused insurance premiums to skyrocket, driven up the cost of medical care and caused some specialists to stop practicing altogether.

Opponents say that's exaggerating. Malpractice suits are a useful tool to check a profession that inadequately polices itself, they say.

The ascendance of Republicans in several state legislatures has spawned similar moves to change the civil justice systems in state courts. Last week, the Illinois Legislature approved a $500,000 cap on awards for "pain and suffering" from most personal-injury suits.

During the debate in the Illinois House, Rep. Ron Stephens, R-Troy, blamed high malpractice premiums for the lack of any obstetrical care in hospitals in 42 counties in Southern Illinois. Stephens said he feared that without malpractice legislation, Illinois would lose doctors to states like Missouri.

The effects of the 1986 Missouri malpractice law are far from clear, however.

In 1986, the Missouri Legislature imposed new requirements on malpractice suits, including a $350,000 limit on awards for pain and suffering. That cap, which rises or falls with inflation, is now about $500,000.

One result of the 1986 changes is that insurance companies are flocking to Missouri to do business. It's not hard to understand why: The amount of money that insurance companies are taking in has continued to rise while the amount they are paying out in claims has declined sharply.

In the two years before the Legislature acted, insurers had paid out more in claims than they got in premiums. After the law passed, that ratio dropped dramatically, evening off in 1988 to 1993 when the companies paid out only 50 cents for every dollar in premiums. That's a much higher percentage than for property, casualty and homeowners insurance, say state insurance officials.

One unexpected result of the 1986 law is that it has helped to more than double the number of cases going to court - from 558 in 1986 to 1,123 in 1993. …