Doctors and insurance officials predicted today that the spiraling costs of liability insurance will stabilize for Maryland businesses and institutions, following Monday's passage by the General Assembly of sweeping limitations on claims and awards.
But the new insurance measures -- expected to be signed into law by Gov. Harry Hughes and among the broadest in the nation -- cannot be expected to bring costs down, they said. And consumer group activists questioned whether the measures will do any good at all.
The most controversial of the bills caps at $350,000 jury awards for "pain and suffering," and other so-called noneconomic losses, in personal injury cases.
The bill, which would go into effect July 1, would not affect a number of claims, said J. John Spinella, executive director of Medical-Mutual Liability Insurance Society of Maryland, which insures about 70 percent of the state's doctors.
He gave as an example awards against obstetricians. Most of those, he said, relate to future economic losses including lost wages.
"If anyone is expecting a miracle they are kidding themselves," said Leo Doyle, who lobbied in support of the legislation for Medical-Mutual.
Perhaps the measure will help convince plaintiffs that there's a limit to what they should expect, he said. "The lottery mentality that people have picked up has been diminished," he said. "There's no longer a pot of gold at the end of the rainbow."
The average citizen will not be helped, and may be hurt by the new liability cap, said Jay Angoff of the National Insurance Consumers Organization.
"It will reduce the incentive for manufacturers, doctors and others to take reasonable care, because they will know the most they can be made to pay for pain and suffering is $350,000," he said.
To pass the legislation without requiring that insurance companies in return agree to limit their insurance rates, he said, "is crazy."
Experience shows that limits on liability pay-outs do nothing to control insurance rates, said Harvey Rosenfield, a consumer advocate and Ralph Nader associate in California.
That state enacted a $250,000 limit on noneconomic damages in medical malpractice cases in 1976. Since then, he said, doctors' liability insurance premiums have gone up 150 percent.
Lawyers' groups, meanwhile, argued that the state had stripped the right of fair compensation from those suffering horrible injury or death because of negligence. They predicted several lengthy legal challenges to the new measures.
Liability insurance is paid by private and public officials who fear lawsuits claiming they were negligent or otherwise liable for damages and injuries suffered by someone else.
In recent years, insurance companies have complained that juries are awarding victims far too much money for their injuries, forcing companies to raise insurance rates. Doctors, especially those in "high risk" areas, have complained they are being driven out of business by the insurance premiums they must pay.
According to testimony before legislative committees here, Maryland's approximately 6,000 physicians were hit with increases of about 28 percent in 1985 alone.
Since the legislation passed Monday affects only suits filed after July 1, it could be several years before it is clear what affect it has had.
"We don't have any hopes that its going to reverse the situation," said Dr. Israel Weiner, head of Marylanders for Malpractice Liability Reform.
"But that it would level off is a reasonable expectation."
Some of those suffering greatly from increased liability insurance rates have been local governments, but a spokesman for the Maryland Municipal League said today he expects to see little significant impact as a result of the new measures. The cities were counting on another piece of legislation, said Steve McHenry, that died on the last day of the session.