AIA: Texas Med-Mal Reforms Showing Excellent Results

May 18, 2005

Recent news from the American Medical Association offered more evidence that the medical malpractice insurance reforms that took effect in Texas in 2003, are working, the American Insurance Association announced. The reforms are working so well that the AMA has removed Texas from its list of crisis states.

Specifically, the AMA said:

“Since reforms were passed, signs of improvement are widespread in Texas. Access to care is increasing and claims are down. Physician recruitment and retention is up, especially in high-risk specialties. New insurers are entering the Texas medical liability market creating more choices for physicians. Subsequently, competition is increasing, and all five of the largest insurers in the Texas medical liability market have announced rate cuts. The rate cuts will produce about $50 million in savings for Texans. “

“The landmark reforms passed in 2003, have clearly started to take hold in the Texas medical malpractice insurance market,” said Fred Bosse, AIA vice president, southwest region. “New doctors are coming to the state, along with new insurance carriers, and the number of lawsuits being filed is decreasing. Most importantly, medical malpractice insurance costs are decreasing, which ultimately benefits all the stakeholders in this system including patients, doctors, hospitals and nursing homes.”

Earlier this year, a Texas House committee heard testimony about the marked improvements in the state’s medical malpractice insurance system. Witnesses at the February hearing told legislators that two of the state’s top insurers of physicians are cutting their rates and a third is freezing its rates. More insurers are scheduled to implement rate reductions this month. In addition, Texas has added 82 obstetricians, 94 internists, 35 neurosurgeons, and 475 family practice doctors. Forty-seven new doctors have begun practice in Corpus Christi, which stands in stark contrast to the 40 physicians they lost in the five previous years.

“Access to health care has improved and healthy competition is returning to the medical malpractice insurance marketplace. Health care practitioners can actually comparison shop for coverage now. Without the key provisions in the reforms, such as placing a cap on non-economic damages, this kind of turnaround never would have occurred,” explained Bosse.

“The bottom line is the number of doctors coming to Texas is up and the number of med mal lawsuits filed in Texas is down; the number of insurers coming to Texas is up and the cost of med mal insurance is down,” Bosse concluded.

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