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Who really benefits when damages are capped in medical malpractice lawsuits?

Des Moines attorney Roxanne Conlin (left), with her client, Sarah Dudley. Conlin took on a medical malpractice case filed by Sarah and her husband, Joe, after a physician’s assistant at an urgent care clinic misdiagnosed Joe with the flu when he had bacterial meningitis. The infection caused permanent brain damage. A jury awarded the Dudleys $27 million in non-economic damages last year.
On Feb. 17, 2017, Joe and Sarah Dudley were getting ready for a late Valentine’s Day celebration when Joe started complaining about feeling sick. He had a bad headache.

“So I told him to go lay down, and we’d just celebrate another time,” Sarah said.

Shortly after, Joe started running a high fever – 103.6 degrees. He could barely walk, so Sarah brought him to an urgent care clinic in Des Moines, Iowa.

The physician’s assistant on duty diagnosed Joe with the flu – despite a negative test – and sent him home.

He was too weak to walk out of the clinic.

“They brought a guy back with a wheelchair, put a gurney bill down and physically put him in the wheelchair – physically sent him home,” Sarah said.

Joe got sicker, and two days later, ended up in the emergency room.

At the hospital, doctors told Sarah that Joe didn’t have the flu. It was much worse. He had bacterial meningitis, which by then was on track to cause permanent brain damage.

Sarah watched it unfold over the next few weeks. Joe had three strokes – two while hospitalized in the intensive care unit.

“When he was actually able to come out of it, he had to relearn to walk, relearn to talk. [He had] permanent nerve damage on his right side, lost his hearing,” she said.

Sarah said the illness drastically changed Joe. The man she married was calm and avoided conflict. The one who left the hospital became prone to anger and bouts of paranoia.

“You never know what mood he’s going to be in, or what’s going to set him off, and there’s no cure for it,” she said.

Shortly after, the Dudleys decided to pursue a medical malpractice case against the clinic.

The case took up the next six years of the Dudleys’ lives.

The case went to trial in late 2022 after the Dudleys could not reach a settlement with the clinic’s insurance company.

A jury last November awarded the Dudleys $27 million in non-economic damages for Joe’s initial misdiagnosis and the lifetime of support he will likely need for his brain injury.

The clinic has appealed the case, so the Dudleys have yet to receive any money.

When – or if – they do, Sarah said much of the award will go toward Joe’s medical care in the future.

“With his brain injury, he’s going to go downhill pretty quickly – dementia, it’s going to come eventually,” she said.

If the Dudleys were to pursue their case now, under a new Iowa law, their outcome would look much different.

Iowa joined most Midwestern states, including Missouri, Kansas and Wisconsin, when it passed a law in February putting a hard cap on non-economic damages that can be awarded by a jury for medical malpractice.

Iowa’s new law caps non-economic damage jury awards at $1 million when an independent clinic is involved, like in Joe Dudley’s case. For hospitals, the limit is $2 million. Starting in 2028, that cap will increase by 2.1% each year. The law also created a task force to make recommendations to reduce medical errors.

The health care industry has long pushed for these caps on damages awarded for things that can’t be assigned a monetary value — like pain and suffering. They claim the caps help clinics stay open by avoiding sudden high-dollar financial blows while helping to attract much-needed health care providers.

But some question whether these caps help – or hurt – Midwesterners seeking justice for medical errors.

‘It sucks to be sued’

The Dudleys case was one of two high-dollar medical malpractice jury awards that grabbed headlines in Iowa last year.

The other was a nearly $98 million award to an eastern Iowa couple whose infant sustained extensive brain damage from a botched delivery. About half that award was non-economic damages. It’s believed to be the highest payout in state history.

These cases are one of the reasons the health care industry has sought hard caps on non-economic damages.

Andy Conlin, a lobbyist for the Iowa Independent Physician Group, shared his opposition to the bill at a subcommittee hearing on the bill in January.

“You never know when you're going to end up…seeing one of these, these judgments come down the pike and really negatively impact your facility, maybe even put your facility out of business,” Conlin said.

However, these high-dollar jury awards are exceptionally rare in the U.S.

For the past six years, Iowa has averaged 160 medical malpractice case filings a year. They make up a fraction of a percent of the average 666,000 civil cases filed in the state, according to the Iowa Judicial Branch.

The vast majority of medical malpractice cases don’t go to trial because they either get dismissed by a judge or reach a settlement before.

From 2018 to 2022, just 48 cases in Iowa ended up before a jury, and of those cases, juries ruled in favor of the plaintiff – people like the Dudleys – seven times.

Mikayla Brockmeier, a third year medical student at Des Moines University, lobbied for a hard cap on non-economic damages that can be awarded by a jury for medical malpractice. She said before Iowa passed the law, she was considering practicing in a neighboring state like South Dakota that has a hard cap. Natalie Krebs / Side Effects Public Media

These big awards aren’t the health care industry’s only concern. They say caps also lower the rate of increasing medical malpractice insurance premiums and help to entice badly-needed doctors to Iowa’s rural areas.

Mikayla Brockmeier, a third year medical student at Des Moines University, helped lobby for the caps.

Brockmeier said before Iowa passed its law, she and other med students were seriously considering leaving Iowa to practice in neighboring states like South Dakota, which has a non-economic damage cap of $500,000.

“If you do not feel like you have the support of the state, then honestly, it makes it really incredibly hard to practice,” she said.

But opponents say caps do little, if anything, to help the growing financial and staffing challenges the health care industry is facing.

“I think the story here is pretty simple. It sucks to be sued. It's really not fun,” said Charles Silver, a law professor at the University of Texas at Austin who has studied the effects of Texas’ non-economic damage cap extensively.

Texas passed a constitutional amendment in 2003 that capped non-economic damages at $250,000 for an individual.

The Texas Medical Association claims the move has since brought more licensed physicians into its rural areas.

Silver said his research contradicts this claim.

“If you have a growing population, you need to control for that,” he said. “And when you control for that, in Texas, what you find is that the physician population actually grew slightly more slowly after tort reform than before.”

Federal projections of obstetricians and gynecologists, or OB-GYNs, in the Midwest also paint a conflicting picture of this concern.

OB-GYNs have one of the highest rates of medical malpractice claims.

According to federal figures, by 2030, Iowa, Kansas and North Dakota — states with non-economic caps — are projected to have the greatest shortage of OB-GYNs in the Midwest, while Illinois, a state with no caps, is among states projected to have more than enough OB-GYNs.

It’s also unclear how much influence caps have on premium rates for medical malpractice insurance.

According to the Medical Liability Monitor, Iowa had the fifth-lowest average premium rate in the country in 2022.

Minnesota, which has no caps, had the lowest average rate in the country. While Illinois, another with no caps, had the second-highest rate.

A 2003 Government Accountability Office report studied the reason for a sharp increase in medical malpractice premiums in the early 2000s, which sparked tort reform policies in places like Texas.

It found several factors played into the increasing premiums, including the fact that insurer losses on malpractice claims had increased overall in the past decade, but other significant factors had nothing to do with the liability system. They included the fact that insurance companies had recently taken a financial hit on their investments and also that the number of companies competing in the medical malpractice marketplace had dropped since the 1990s.

There’s no clear consensus from research on how non-economic damage caps affect things like premium rates and physician recruitment, said Robert Leflar, a retired law professor at the University of Arkansas, who’s an expert in tort reform.

But he said there’s one group that clearly benefits from the caps: “the insurance companies who have smaller payouts and who have less risk of huge payouts.”

The Iowa Insurance Institute did not respond to requests for an interview.

Leflar said it’s also clear who is hurt by caps.

“The seriously disabled people,” he said. “The people who suffer through a lifetime of paralysis or pain and the family members of disabled people who have to give up a lot of their lives to take care of them.”

Damage caps can make it harder for such people to sue because medical malpractice lawyers will be less likely to take on their pricey cases with less payout, Leflar said.

‘There’s not much left’

Roxanne Conlin, the Dudleys’ attorney, said it’s likely she wouldn’t have been able to take their case now, as the total payout would be capped at just $1 million.

Conlin, who has no relation to Iowa physician lobbyist Andy Conlin, spent six years and a lot of money on the Dudleys’ case, doing things like hiring pricy medical experts.

“The worth of that case is $1 million. It may cost me…$100,000 to $200,000 to bring that case. There's not much left,” she said.

It’s common for medical malpractice attorneys to put up the costs for clients, who often don’t have the funds to pay an attorney an hourly rate, and cases often take years to get through.

When lawmakers cap non-economic damages, they only hurt those who don’t have high economic losses, Conlin said.

“They are disadvantaging children. They have no earnings….They're disadvantaging old people who don't work anymore,” she said.

She said that includes Joe Dudley. He was able to go back to work after his illness, but will never be the same person again.

This story comes from a collaboration between Side Effects Public Media, based at WFYI, and the Midwest Newsroom — an investigative journalism collaboration including IPR, KCUR 89.3, Nebraska Public Media News, St. Louis Public Radio and NPR.

Copyright 2023 Side Effects Public Media. To see more, visit Side Effects Public Media.
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Side Effects Public Media

Side Effects is a health news service exploring the impacts of place, policy and economics on Americans' health.

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