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Tort Reform State-by-State: Texas

July 18, 2012

In today’s post, we again address the issue of tort reform. In previous months, we have published pieces on the pro victims’ rights documentary Hot Coffee, how tort reform has affected the healthcare system of Ohio and “loser pays” rules in Texas. As part of our continuing focus on the insurance industry’s tort reform campaign, we turn to the state of Texas.

In 2003, Texas passed draconian tort reform legislation that effectively closed the courthouses of Texas to victims of medical malpractice. This legislation limited the amount of noneconomic damages (like pain and suffering) that could be collected by a victim of medical negligence. The goal of such measures was alleged to lower medical malpractice insurance premiums, encourage more doctors to practice in Texas, and lower overall healthcare costs. None of the stated goals were realized by this legislation.

During his presidential campaign, Governor Rick Perry claimed that his state added 21,000 doctors as a result of the tort reform package (known as Proposition 12) he helped pass. But this assertion just does not match up with reality.

PolitiFact.com (a nonpartisan news organization associated with the Tampa Bay Times) found that Texas’ rise in the physician census was driven almost entirely by population growth. As Texas’ population grew by 20 percent, its number of doctors increased by 24 percent. When we don’t count administrators, research doctors and medical teachers (none of whom deal with patients regularly), there has perhaps been a gain of 5,000 doctors in total since 2003. Plus, and this is an important point, in each of the nine years before tort reform, the number of Texas doctors grew at twice the rate of Texas’ population. Tom Banning of the Texas Academy of Family Physicians pointed out that the vast majority of new physicians have gone to work in the wealthiest suburbs of Texas’ biggest cities. This is a far cry from providing crucial medical services to the state as a whole.

The University of Texas recently published a study (with researchers from Northwestern University and the University of Illinois) in which they sifted through records from 2002–2009 to determine what effect this legislation has had. In the words of Business Insider’s Erin Fuchs, “they found absolutely no evidence that tort reform saved money.”

In a less pithy discussion of the study, the editorial board of the Austin American-Statesman writes that when Texas’ tort reform package went into effect, the state was already at a four-year low regarding medical malpractice lawsuits and payouts. They add, “There were other reports showing that many malpractice claims resulted in no compensation paid, that malpractice litigation wasn’t a significant factor in overall health care costs, and that malpractice claims and awards had little to do with the rise in medical malpractice insurance rates.” Researchers also point out that Medicare costs in Texas have risen 1 to 2 percent faster than the national average.

It’s also worth noting that University of Pennsylvania Professor of Law Tom Baker estimates medical malpractice litigation accounts for between 1 and 1.5 percent of the nation’s total healthcare costs. By comparison, a Cornell University study in April of this year established that obesity accounts for about 21 percent of these costs. This just gives you some idea of how overblown the issue of tort reform has become in some circles. All of these legislative measures exist for the purpose of shrinking the costs in a sector that only makes up about one percent of total spending.

Texas’ tort reform package has not saved patients’ money, nor has it has added new doctors to the rural areas of Texas where they are most needed. The only thing it has done is make it harder for victims of medical negligence to file suit in civil court and to obtain adequate compensation for their injuries and losses.

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