California's success with malpractice reform can serve as national model.

As President Bush and Congress search for a durable medical malpractice reform remedy, a dose of MICRA--California's Medical Injury Compensation Reform Act--is frequently prescribed.

MICRA punishes malpractice with fully compensated actual damages--including medical bills, custodial care and rehabilitation. Punitive damages, which can be substantial, are not limited. The only limit is $250,000 for non-economic damages, what some call "pain and suffering," the least objective of all compensation measures.

President Bush and others have mentioned a $500,000 cap, which dramatically reduces the effectiveness MICRA-like legislation. Thus, MICRA merits a fresh, critical analysis.

The California law has a bipartisan heritage and was grounded in patient protection. In calling an emergency legislative session, former Gov. Jerry Brown proclaimed that "the inability of doctors to obtain insurance at reasonable rates is endangering the health of the people of this state, and threatens the closing of many hospitals. The consequences of such closings could seriously limit the health care provided to hundreds of thousands of our citizens." MICRA quickly passed with an overwhelming legislative majority.

Without the possibility of a multimillion-dollar payoff for non-economic damages, long-shot lawsuits are no longer an economic proposition for individuals with weak claims.

The record shows MICRA has had absolutely no impact on court access for those who believe they have been victims of malpractice; indeed, the number of malpractice lawsuits filed per insured doctor in California exceeds the national average by 40 percent, according to statistics published by the Los Angeles Superior Courts.

A $500,000 cap would cost Californians $6.5 billion annually in higher treatment costs, more costly insurance and tax increases to cover government medical programs. Higher non-economic damages encourage providers to order unnecessary tests and perform unnecessary (and sometimes risky) procedures.

Higher non-economic damages drive higher premiums. After the Oregon Supreme Court in 1999 disallowed a $500,000 ceiling, average premiums for internal medicine skyrocketed 155 percent in five years. The impact trickles down--for every $1 increase in premium, doctors fees rise 16 cents for office visits and nine to 17 cents for hospital visits, according to an American Economic Association study.

The Congressional Budget Office reinforced this finding in a 2003 report, estimating that MICRA saves 25 to 30 percent of costs. Lifting the MICRA cap would adversely impact the most vulnerable patients, as well as taxpayers and employers.

Americans living in rural communities and inner cities would be the first hit, as clinics and hospitals with higher costs and less ability to pass on costs restrict services. For example, "safety net" hospitals that treat most of the indigents would have to increase reserves, taking money directly out of the charity care budget.

If the cap is raised, many patients will wait longer and travel farther for treatment, as physicians who service high-risk patients leave their practices.

Employer-provided health insurance would go up or be reduced in scope, in response to an increase in the cap, impacting 52 percent of the population, those covered through employers, according to the Kaiser Family Foundation. Higher insurance costs also hold down wages. A 10 percent increase in health insurance cost drops those covered by 1 to 4 percent, Rand Corp. research found.

MICRA, we found, preserves patient access to care and to courts.

William G. Hamm is a principal with the LECG, a research and analysis firm.