Medical Tort Reform - Case Study

Today's WSJ features an editorial showing the positive effects of medical tort reform in the state of Texas.

Prior to the successful reform effort, personal injury lawyers had put Texas doctors on the run. According to the Texas Department of Insurance, the frequency of claims was increasing at a rate of 4.6% annually--between 1996 and 2000 alone, one out of four doctors was sued.

These surging legal and insurance bills reduced patient access to health care. Texas fell to 48th out of 50 in physician manpower. There were 152 medical doctors per 100,000 citizens, well below the U.S. average of 196. Some 158 counties had no obstetrician. Good, competent doctors were closing their doors, unable to afford the cost of insurance.

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At the core of House Bill 4, led with remarkable courage and dedication by state Rep. Joe Nixon and state Sen. Jane Nelson, was a hard $250,000 cap on noneconomic damages for all physicians, with a separate $250,000 cap on noneconomic damages payable by hospitals and other providers. The law keeps doctors, hospitals and nursing homes liable for all economic damages assessed by a jury. HB 4 was modeled on California's successful 1975 Micra law, still on the books, keeping litigation-related costs under control and allowing competent doctors and hospitals to continue providing care.

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So what has happened since September of 2003, when the new law went into effect? After years of losing doctors, Texas has added nearly 4,000 since passage of Proposition 12, including 127 orthopedic surgeons, almost 300 anesthesiologists, over 200 emergency room physicians, 146 new obstetricians, 58 neurologists and 24 neurosurgeons. The Texas Medical Board is anticipating some 4,000 applicants for new physician licenses this year alone--double last year's numbers, and 30% more than the greatest growth year ever.

The threat of lawsuits has been a particular barrier to attracting and retaining pediatric specialists. Since 2003, Texas has gained 20 pediatric cardiologists, 14 pediatric oncologists, almost 50 new perinatologists (obstetricians specializing in high-risk pregnancies), 10 pediatric surgeons and 8 new pediatric endocrinologists.

Medically underserved counties in Texas are benefiting as well. Jefferson, Webb and Victoria Counties, as well as the counties of Cameron and Hidalgo in the Rio Grande Valley, have all experienced an influx of physicians. Additionally, the market for insurance to protect health-care providers against the cost of lawsuits has become more robust and competitive. In 2002 there were only four companies writing policies. Today that number has more than tripled. And all of these trends are expected to continue.