The Problems with Punitive Damages in Lawsuits against Managed-Care Organizations

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Abstract
Five years ago, a jury in southern California awarded $89 million to the estate of Nelene Fox because her insurer, Health Net, did not approve treatment with autologous bone marrow transplantation and high-dose chemotherapy for breast cancer. Nearly 90 percent of the amount awarded ($77 million) consisted of “punitive damages” — a special supplement to the award designed to punish the defendant. Fox v. Health Net made headlines as an example of the kind of retribution that managed-care organizations could face for withholding medical care.1 However, its effect was limited, in part because the case was later settled during an . . .