Outside View: Tort caps: Verdict's in
By STUART WEINSTEIN
United Press International
Outside View Commentator
WASHINGTON, Oct. 2 (UPI) — Have insurance companies in Texas suddenly become less greedy?
Last week Texas Medical Liability Trust, the state’s largest provider of liability insurance to Texas physicians, announced a $48 million liability cost reduction. Coming on top of three earlier cuts, this is believed to be the largest single-year saving ever offered by a U.S. physician carrier.
TMLT is not alone. In the last three years every major carrier in Texas has cut its rates, most by double-digits.
This is a dramatic turn-around from three years ago, when skyrocketing liability insurance rates were forcing an exodus of highly trained doctors to other states and throwing the state into a severe crisis of access to care. The doctor shortage was particularly acute among “high risk” specialists such as neurosurgeons, orthopaedic surgeons, cardiologists and obstetricians. Poor and rural areas were the hardest hit.
Advocates of medical liability reform — of which I’m one — said that the cause of the crisis was an epidemic of meritless lawsuits and jackpot-sized judgments. It wasn’t for nothing that many counties in Texas had earned the designation of “judicial hellholes.” We said that common-sense liability reform that limits excessive payouts for what are called “non-economic” damages (also known as “pain and suffering”) would solve the problem and bring the doctors back to Texas.
Personal-injury lawyers countered that they were not at fault. They blamed the insurance companies, which they said were artificially raising doctors’ premiums in order to stoke corporate profits. Medical liability reform, they insisted, would do nothing to solve the problem.
To put it more boldly, the question came down to whether it was greedy personal-injury lawyers or greedy insurance companies that were causing the crisis.
Both theories were tested when the people of Texas voted to pass Proposition 12, a constitutional amendment to reform the state’s medical liability laws that was vigorously opposed by the trial-lawyer lobby.
The centerpiece of Prop. 12 was a $750,000 cap on non-economic damages that included $250,000 for physicians, $250,000 for the first hospital or healthcare facility and $250,000 for any additional facilities. Though opponents sometimes try to obfuscate this point, there is absolutely no limit whatsoever on damages for medical expenses and any economic expenses, such as past and future income lost due to an injury.
If personal-injury lawyers had been correct, Prop. 12 should have had no effect on insurance rates. Unfortunately for them — and fortunately for every one else — it did.
In no time, insurance companies cancelled planned rate hikes and announced dramatic cuts — and soon the doctors came flooding back to Texas.
Texas today is licensing an average of 400 more doctors per year than before reform. The Texas Medical Board expects a record 4,100 new applications for physician licenses this year — 38 percent more than last year, which was the previous record!
The number of medical specialists is growing rapidly. Since reform, Texas has gained 146 obstetricians, 127 orthopaedic surgeons and 25 neurosurgeons. And medically underserved communities in the Rio Grande Valley have seen their physician ranks swell, including primary-care doctors, specialists and critically needed emergency medicine physicians.
Hospitals, too, have benefited, saving an estimated $10 million or more in liability premiums since Prop. 12 passed, money they have utilized to buy new equipment, expand emergency care and increase care for the needy.
According to personal-injury lawyers this is all a coincidence and has nothing to do with reform. Interestingly, it’s a coincidence that is being repeated in Mississippi, where the largest insurer of doctors also announced last week that it would be cutting rates for the third time since medical liability reform passed there in 2004. And of course, reforms enacted in California in the 1970s have consistently held down the rise in premiums in that state.
Meanwhile, the national crisis mounts, with 44 states now in crisis or heading that way. Across the country, emergency rooms are closing down and specialists are fleeing high-liability states or abandoning the practice of medicine altogether. Many patients, particularly the poor and disadvantaged, are finding it increasingly hard to gain access to quality medical care. And costs are rising for everyone.
Last spring national reform legislation modeled on Prop. 12 was introduced in the U.S. Senate, but it was blocked by a minority of senators beholden to the powerful trial-lawyer lobby. That’s certainly no coincidence.
The trial lawyers can point the finger of blame as much as they want, but the evidence continues to point back to them. It’s time that the U.S. Senate overcame the special interests, voted for the national interest, and passed vitally need medical liability reform now.
Stuart L. Weinstein, M.D., is a practicing pediatric orthopaedic surgeon and chairman of Doctors for Medical Liability Reform. –
United Press International’s “Outside View” commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.