The Texas medical community collectively scratched its head recently as newspaper headlines trumpeted a new study claiming that increases in physicians’ medical liability insurance premiums were not the result of skyrocketing claim costs.
Many within the health care community, such as Texas Alliance for Patient Access (TAPA) Director Jon Opelt, feel that the study, Stability, Not Crisis, Medical Malpractice Claim Outcomes in Texas, 1998-2002 (Black, et al), is flawed and inaccurate—flying in the face of proven results exhibited in states that have passed effective medical liability reforms such as California, Colorado, and Texas. Since reforms were passed in 2003, the Lone Star State has seen fewer lawsuits, more physician recruitment, and a decrease in malpractice insurance premiums for most of the state’s doctors.
“Four of the five largest physician insurers in Texas have cut rates since the Legislature enacted meaningful reforms, and the other has frozen rates for this year,” Opelt said. “So it was confounding when four law professors released this study claiming that lawsuits and settlements don’t drive rates.”
Opelt called the study “seriously flawed,” claiming the authors “cooked the numbers to the point that they cooked the truth.” Opelt also noted that claims against Texas physicians occurred at nearly twice the national average between 1995 and 2002.
Data from the state’s largest medical liability insurer, doctor-owned Texas Medical Liability Trust (TMLT), indicate that for claims between 1988 and 2001 in which a plaintiff received compensation, the payment to the plaintiff more than doubled from $152,773 to $342,616, and the cost of defending those claims tripled from $33,439 to $96,564.
The authors of the Texas study contend that the number of lawsuits and high dollar payouts in the state remained relatively stable between 1988 and 2002, when adjusted for several factors—including population growth, frequency of visits to healthcare providers, healthcare costs, and the change in the value of the dollar.
“We don’t get to adjust the number of claims by some economic value that has no bearing on medical liability insurance or pay today’s claims in 1988 dollars,” said Tom Cotten, president and CEO of TMLT. “So it makes no sense to massage and distort claim counts and payouts for such irrelevant reasons.”
As evidence that caps on noneconomic damages work to reduce premiums, Lawrence Smarr of the Physician Insurers Association of America noted that California doctors have seen rates rise only 245 percent since effective reforms were passed 30 years ago compared with 755 percent for all other states during the same time period. The highly effective Medical Injury Compensation Reform Act of 1975 (MICRA) set a cap of $250,000 on noneconomic damages in medical malpractice cases and limited attorneys’ contingency fees. It also provided for joint and several liability and collateral source rule reform that should be central to any serious attempts at medical liability reform.
The Texas Alliance For Patient Access is a coalition of doctors, hospitals, nursing homes, and physician liability insurers dedicated to improving access to health care and improving the availability and affordability of health care liability insurance.
The PIAA is an association of doctor/provider owned and/or operated medical liability insurance companies which insure over 60 percent of America’s private practicing physicians as well as dentists, hospitals, and other healthcare providers.
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