The Senate on Tuesday approved lowering the cap on medical malpractice awards to $250,000 on the argument that too few doctors and insurance carriers operate in Alaska because of the risk of costly verdicts.
Under the measure by Sen. Ralph Seekins, R-Fairbanks, a court or jury could award no more than $250,000 to a person who successfully sues a doctor or health care provider for non-economic damages, such as pain and suffering, disfigurement, physical impairment, inconvenience and loss of enjoyment of life.
Lowering the cap will make Alaska a more attractive place for doctors and insurers to do business, supporters of the bill contend.
"We are competing with other states to attract physicians," said Jim Jordan, executive director of the Alaska State Medical Association. "In competing with other states, we need to have a gold standard."
Opponents of Seekins' bill contend marketing Alaska to health care professionals should not come at the expense of Alaskans who are hurt or die because of medical mistakes.
Jordan said just five or six states have fewer physicians than Alaska. One of them, Idaho, lowered its non-economic cap to $250,000 two years ago and has been able to draw more doctors because of it, he said. Idaho, with about twice the population of Alaska, has 17 neurosurgeons while Alaska has just three, he said.
California lowered its cap to $250,000 in 1976. As a result, insurance premiums increased at less than a third the rate as the rest of the nation, Jordan said.
There are no guarantees there will be the same effect on insurance premiums in Alaska. There are too many factors that play into the rates, Jordan said.
"No one can say lowering the cap will reduce the rates," he said.
Sen. Hollis French, D-Anchorage, tried and failed to amend the bill to exclude capping damages suffered because of gross negligence, reckless misconduct or intentional misconduct.
The aim was to keep the few bad doctors who make the bulk of mistakes from enjoying the benefit of a cap, he said.
My view is that careful doctors wouldnt be too concerned about where the cap is, French said. My view is that doctors who may have had previous disciplinary problems would be interested in moving to a jurisdiction with low caps.
French said the bill creates a special rule for doctors and nurses that undermines responsibility for the wrongs that are committed.
This is a bad bill. It undercuts the fundamental ideal that you have to be responsible for your actions, French said.
The bill passed the Senate 12-8 without comment or debate from Seekins or any other Republican. The vote was split mainly across party lines, with Sen. Donald Olson, D-Nome, breaking with his party to vote yes and Sen. Tom Wagoner, R-Kenai, voting no.
The bill heads to the House of Representatives, which last year rejected a similar measure to lower the cap.
In 1997, the Legislature set the non-economic damages cap at the greater of $400,000 or the injured persons life expectancy multiplied by $8,000. If the damages are severe, the cap goes up $1 million or life expectancy multiplied by $25,000.
Paul Dillon, a Juneau attorney who represents insurance companies and doctors, told the Senate Judiciary Committee in a hearing on the bill last month that the availability of insurance and the cost of the premiums in the state are acceptable. Insurance premiums in the state have actually declined over the past 13 years, he told the committee.
Jordan on Tuesday said rates have been on the rise since 2001.