TPPF: 2003 Lawsuit Reforms Increased the Number of Texas Doctors
By Chuck DeVore
Texas Public Policy Foundation
Three law school professors asserted in an American-Statesman commentary published April 9 that Texas’ 2003 medical lawsuit reforms had no effect on the number of physicians in Texas. (“Tort Reform not the tonic it’s touted to be”).
2003’s landmark lawsuit reform did have its intended impact: encouraging insurance companies to provide the medical malpractice insurance coverage doctors require to practice medicine.
In the early 2000s, this problem became so acute that high-risk professions such as gynecologists and anesthesiologists found it increasingly hard to obtain coverage. The cost of medical liability insurance in Texas doubled from 1999 to 2003. By the summer of 2002, 6,200 Texas physicians were dropped from their liability coverage by insurance companies that were losing money to the surge in lawsuits.
Lawsuit reform wasn’t easy and needed a constitutional amendment to become reality. In September 2003, the people of Texas voted for reform. The medical, legal and insurance systems began to reorder themselves soon after, with the major turnaround in insurance coverage for doctors not taking root until 2005, when the number of doctors in Texas began to rise significantly (which the chart accompanying the commentary we are responding to does show).
So, the question is, why did the surge in new doctors only just keep pace with the growth in the Texas population after 2005? Professors Black, Silver and Hyman suggest it might be because the number of insured patients isn’t high enough in Texas.
We think another factor might be at play: Texas’ explosive growth beginning in 2005. According to the U.S. Census, Texas annual net interstate immigration more than quadrupled in 2006, going from an average of just under 50,000 per year from 2000 to 2005 to about 225,000 in 2006 then remaining at almost 150,000 per year for the next three years.
This massive migration to Texas more than explains why the ratio of doctors to the general population has remained flat over the past few years. As a state’s population expands and the need for medical services grows, doctors respond to the increased demand for their services—but this is a lagging phenomenon, especially among established doctors who have to uproot their existing practices and start over in another state.
Further, when a doctor moves to Texas, they must get licensed by the state. From 2004 to 2010, the number of new physician applications outstripped the ability of the state bureaucracy to grant licenses. New physician applications rose 72 percent from 2001 to 2010.
Texas’ medical lawsuit reforms have garnered national attention, with New York Mayor Michael Bloomberg remarking in a 2011 speech to the New York State Bar Association: “After Texas enacted malpractice reform, the shortage of doctors they had long suffered from disappeared. And can you guess which state the most doctors came from? You got it—New York. Reforming our medical malpractice laws would help drive down costs, improve care, and improve access to doctors…”
Is there any merit at all to the suggestion that the rates of people with health insurance are a bigger driver than medical lawsuit reform? California and Texas both have medical lawsuit reform laws, with 20 percent of Californians not having health care insurance vs. 24 percent in Texas. According to the U.S. Bureau of Labor statistics, 567,220 Texans worked in the medical sector in 2012, a 0.91 ratio as compared to the U.S. California however, has a medical service workforce ratio of 0.86 to the national. So, clearly, the number of people with health insurance does not appear to be a major driver in the number of people in the medical service sector.
Further, looking at the high-risk medical professions that were under the most pressure from medical lawsuits before 2003, obstetricians and anesthesiologists, federal data show that Texas now has 1.27 obstetricians/gynecologists for every 1 in the nation with 1.08 Anesthesiologists for every 1 in the U.S.
Black, Silver and Hyman’s case doesn’t hold up.