Full article in Sacramento Business Journal

By Julian Cañete

Californians are subsidizing a multibillion-dollar industry that’s profiting at their own expense. And many don’t even realize it’s happening.

The state allows for excessively large damages to be awarded in personal injury lawsuits, primarily in medical malpractice suits — damages to such great extents that they are actively driving up premiums for health insurance and disincentivizing other businesses from ever opening their doors in California.

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Tort reform, which means adjusting the state’s legal system to prevent frivolous lawsuits, can be enacted while protecting plaintiffs at the same time. But well-funded attempts by lawsuit abusers are taking advantage of systems designed to benefit patients. For example, California has legislation that technically limits non-economic damages in medical malpractice cases, but the cap imposed by the Medical Injury Compensation Reform Act has recently been raised from $250,000 all the way to $750,000 by 2033. The economic reality of today is that many health care providers cannot shoulder the cost of these damages. As a result, they must operate under the constant threat of litigation.

This constant threat compromises the well-being of a patient in our health care system by the potential for large jury awards in medical malpractice cases. As a result, many doctors are forced to practice with the risk of lawsuits hanging over their heads. This type of care is characterized by an overly conservative approach to treatment, with multiple rounds of duplicative tests to cover any potential angle of a malpractice lawsuit. Other doctors, who aren’t able to treat their patients in this manner, are forced to leave the state entirely, depriving our communities of critical health care providers.

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The legal system in California is not properly balanced and the state’s taxpayers are fronting the consequences. California’s legal system costs $72 billion, equal to over $5,000 per household, and the state leads the nation in jury verdicts worth $10 million or more. Frivolous lawsuits with inflated payouts are occurring at the direct expense of taxpayers and Hispanic communities, who will only see more and more enterprises and services shut down. Meaningful, lasting tort reform is needed to prevent this situation from worsening.