State Rep. Says Reforms Are Healthy For Texas

February 21, 2005

Texas’ landmark medical lawsuit reforms, passed just 18 months ago, are producing healthy benefits for the state’s doctors, patients, hospitals and nursing homes, according to State Rep. Joe Nixon.

A Texas House panel recently heard several signs of improvement, including announcements that physicians are moving to Texas, especially in the most needed areas, and that two of the state’s top insurers of physicians are cutting their rates and a third will be freezing its rates.

“Physician recruitment is up. Lawsuit filings are down. Texas patients are experiencing better access to health care and many doctors and hospitals are saving on their liability costs,” noted Nixon, chairman of the House Committee on Civil Practices, in an announcement released by the Texas House. Nixon worked for passage of the medical reform bill.

“In the past 18 months the state has added 82 obstetricians, 94 internists, 35 neurosurgeons, and 475 family practice doctors. Some 47 new doctors have begun practice in Corpus Christi. That is a stark contrast to the 40 physicians they lost in the five previous years”, noted Nixon.

American Physicians Exchange (APIE), the state’s third largest insurer of physicians, told the House panel it will be reducing rates 5 percent for many obstetricians and surgeons effective May 1, 2005. An estimated 2,200 of the physicians insured by APIE will receive a rate reduction, saving doctors an estimated $3.5 million in future premiums. Likewise, The Doctors Company, the nation’s leading physician-owned medical malpractice carrier, announced that they too will be implementing a May rate cut; with reductions ranging from 9 to14 percent.

According to the Texas Alliance For Patient Access, the announced rate cuts mean that Texas doctors will have seen their out-of-pocket insurance costs cut $41 million since the passage of medical liability reforms.

Texas Medical Liability Trust, which insures nearly half of the doctors in Texas against medical malpractice claims, has cut rates 17 percent since the passage of Proposition 12. GE Medical Protective, the state’s second largest physician carrier, also announced it would not seek a rate increase this year. The company cited a reduction of claims and lawsuits as cause for the rate freeze.

“Medical malpractice filings in the state’s most populous counties—Harris and Dallas-have been cut in half since the legislature placed a cap on pain and suffering-type damages”, stated Nixon. In other counties, suits against doctors are down by two thirds. “In that doctors won 85 percent of all lawsuits filed against them, it is appropriate to see this reduction in filings against doctors,” Nixon explained.

Thirteen new carriers are entering the Texas market, and existing ones are seeking new business, Jose Montemayor, the Texas Insurance Commissioner explained. “Competition is good for consumers and we believe this will translate into lower rates for the average doctor,” he said. “The newcomers know that they will have to competitively price their policies and existing carriers will have to reduce their price to hold market share. Either way, doctors will benefit from this healthier and more competitive insurance market,” said Montemayor.

“For the first time in years, Texas physicians can competitively shop their policies,” said Nixon, noting that the number of doctors in the JUA, the state pool of last resort, has dwindled and two new carriers, Advocate MD of the Southwest and Medical Liability Insurance Company of America have begun aggressively competing for business. “Since January of last year 3,520 Texas physicians have opened new professional liability policies, Nixon said. “If combined into a single company, newly insured doctors would comprise the third largest grouping in the Texas physician market,” he added.

Hospitals are finding healthy savings, as well. A year ago Texas hospitals were hit with an average 54 percent hike in their liability costs. This year, with a new damage cap in place these same hospitals are seeing their liability costs slashed 17 percent. “Most hospitals have had an easier time recruiting physicians because of the state’s more favorable liability climate,” Nixon said.

CHRISTUS Health is saving over $20 million this year from tort reform “and we have every reason to believe these savings will continue and, perhaps, even grow,” said Randy Finley, director of risk management for the Catholic-owned hospital system.

Finley noted CHRISTUS is reinvesting their savings into the community and expanding their already high level of charity care. Finley reported that in CHRISTUS Spohn is building a new community clinic for the indigent and developing a diabetes excellence program in Corpus Christi. In other Texas hospitals, CHRISTUS will be launching training programs for nurses and issuing grants for innovative patient safety initiatives, he said.

“Increased access to health care was improved through the reduction in the number of lawsuits and lower rates,” Nixon concluded. “More doctors are coming to Texas, and hospitals are expanding services. What we set out to achieve with House Bill 4 and Prop 12 is being achieved. Seldom is legislation this successful, and I couldn’t be happier with the results of HB 4, ” Nixon said.

Representative Joe Nixon serves House District 133 in Houston. He was first elected in 1994.

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