I think it's a very good question, about how to evaluate intangible losses.
I read a Med Mal newsletter from time to time, which goes through cases which have been litigated and talks both about the medical issues, and the legal issues involved. Some years ago, I read about a case where a woman had a sponge left in after a hysterectomy. The sponge count was incorrect, but it wasn't confirmed until the patient had been taken to the recovery room. She was not awake, not in the sense of remembering anything yet, and when the erroneous count was confirmed, she was x-rayed, the presence of the sponge confirmed, and she was immediately returned to the operating room, reanesthetized, and the sponge removed. Her hospital stay was the same as would have been expected for the operation in the first place, and she suffered no complications as a result of the second procedure or the sponge which had remained an extra hour or less in her abdomen.
Upon finding out about the error, she sued the surgeon, and the case went to court. The jury found against the surgeon and hospital, and a ONE MILLION DOLLAR VERDICT was rendered. Now, remember, IF there were any real costs in this case, it would have been if the surgeon and hospital billed the patient for the second anesthetic and procedure, which I am quite sure they did not (not billing for such things is a known strategy for PREVENTING lawsuits). Even if they did, we'd be talking a few thousand dollars in bills. The patient had no additional postoperative pain or disability -- her award was, as far as I could tell, for the EMOTIONAL distress of knowing she had a sponge left in that was promptly removed!
Capping intangible rewards would undoubtedly be a disservice to a few plaintiffs, but it would go a long way toward controlling excessive awards.
I also spoke, some time ago, with an attorney from a southern state, who told me their state had decided to fight EVERY malpractice case to court -- to settle nothing. In about five years, the number of cases filed dropped to less than ten percent of what had been happening before, and over 90% of them were won by the defendant. I do believe that people who are injured by clear malpractice (and it happens) should be compensated -- but those cases will be brought and tried, and if the evidence is clear, I still believe that the right thing will be done. It's the lottery we have to stop.