Studies: Texas Tort Reform Has Had No Effect on Physician Supply, Lowering Costs

Conventional wisdom for many is that the 2003 Texas constitutional amendment limiting medical malpractice lawsuits has created in an influx of physicians from out-of-state and tempered healthcare costs.

Others argued that medical malpractice caps would bring down healthcare costs. The assumption is that physicians would be less inclined to practice defensive medicine. Also, fewer malpractice cases would be filed, with savings from lower litigation costs and less expensive malpractice premiums resulting in lower healthcare costs.

However, three studies have sharply challenged all of these assumptions.

Four researchers—including a University of Texas law professor—concluded that there was no evidence that Texas physicians were leaving the state prior to the 2003 law, or that there was a significant increase in physicians moving to Texas because of better liability climate.

The 2003 legislation, which resulted a 70 percent decrease in medical malpractice claims, limited non-economic damages to $250,000 for a healthcare provider and $500,000 for healthcare facilities. Malpractice claim payouts dropped by more than 75 percent. Insurance premiums fell by about one half.

Gov. Rick Perry, during his failed presidential campaign, claimed that Texas has added 21,000 physicians because of the law. PolitiFact, a news organization that attempts to verify political statements, disputed that figure and the number of practicing physicians was 12,788, and quoted experts who credited the state’s increasing population rather than its liability climate.

The researchers reached much the same conclusion. They pointed out that Perry cited Texas Medical Board (TMB) license applications for his claims. Those figures, they said, do not reflect whether the licensees are actually practicing medicine and ignore the number of physicians who are retiring or leave the state. They said other factors contributed to the increase in physicians, such as Hurricane Katrina relocations.

Researchers relied on data from the Texas Department of State Health Services, which they said begins with TMB data and then makes adjustments to determine the number of physicians directly treating patients. They found that there was no evidence that the number of active Texas physicians is larger than it would have been without tort reform.

They point out that advocates tend to credit every post-reform license to tort reform. However, there was a spike in direct-care physicians after Hurricane Katrina struck Louisiana in 2005. Licenses also do not take into account how many physicians are engage in patient care rather than occupying research or administrative roles. For example, only 39 percent of licensed Texas physicians actively treat patients, a slight decrease from prior to tort reform.

Researchers also noted that the number of licenses do not reflect the number of physicians leaving the state or retiring. They say the increases in licenses may be related to departures, suggesting that new licensees were attracted by job openings rather than tort reform.

Based on their analysis, the number of direct-patient care physicians grew more slowly after malpractice reform—although the researchers acknowledge could have been worse without reform.

“Physician supply appears to be primarily driven by factors other than liability risk, including population trends, location of the physician’s residency, job opportunities within the physician’s specialty, lifestyle choices, and demand for medical services,” the researchers wrote. “For some physicians, malpractice insurance rates and the risk of being sued may be important factors. But for many physicians, other factors matter more.”

Perry criticized the study’s conclusions and argued in a July op-ed column in The Statesman in Austin that tort reform, in fact, had boosted the number of physicians in Texas and charged that Charles Silver, a UT law professor who was one of the researchers, has “close ties to the trial lawyer lobby” and the study was “another in a long line of attacks” against tort reform.

In an interview, Silver said the researchers benefited from the fact that Texas is one of the few states with a robust medical malpractice database. He said an interesting research question would be to explore why more physicians are not attracted to Texas if the cost of doing business is less expensive because of tort reform.

“I think the answer is that one has to assume a static environment for that to be true,” he said. “If I am in New York and threaten to leave to go to Texas, perhaps my salary is raised. Tort reform may make states respond in other ways to make practices more attractive. It is only one of many variables or considerations that affect doctors’ decisions to relocate.”

The same group of researchers also looked at the effect of tort reform on healthcare costs and found no evidence that they fell after 2003. The researchers compared healthcare costs in Texas counties where doctors faced a higher risk of lawsuits with those with a lower risk. The assumption was that physicians in high-risk counties were practicing more defensive medicine prior to 2003, and that fewer unnecessary procedures would be performed after 2003. However, they found that there were slightly more procedures performed in high-risk counties after the law was passed.

In seven categories of risk, Dallas and Tarrant were in the third-highest category while Collin and Denton were in the fourth-highest category.

A third report by non-profit advocacy group Public Citizen in October 2011 echoed the conclusions of both research studies. The report, called “A Failed Experiment,” found that Medicare spending and private insurance premiums both have risen faster than the national average since tort reform.

That group also examined the trend in direct-care physician growth between 1996 and 2010. It found that those physicians grew by more than 9 percent prior to tort reform, and about 4 percent afterward. It also said physician growth in rural Texas fell by 1 percent since reform, after having grown more than 23 percent prior to the law.

Steve Jacob is editor of D Healthcare Daily and author of the new book Health Care in 2020: Where Uncertain Reform, Bad Habits, Too Few Doctors and Skyrocketing Costs Are Taking Us. He can be reached at steve.jacob@dmagazine.com.

27 comments on “Studies: Texas Tort Reform Has Had No Effect on Physician Supply, Lowering Costs

  1. Interesting conclusions reached from the researchers. Fromm the TMB website….Active physicians 2004 =39631, 2012=51,217,an 11586 increase in the number of physicians (29%!!) . And then to argue that this was a Katrina effect (meaning all the physicians in LA. moved to Texas) or that only 39% of active MD’s actually see patient is ludicrous. That may be an accurate number for the legal profession but it’s not for the medical field. Consider the source.

    Reply
  2. Pingback: Studies: Texas Tort Reform Has Had No Effect on Physician Supply, Lowering Costs | Texas Watch

  3. My liability insurance premiums went from $20,000/year to $14,000/year by 2005 and are now $8,000/year. I returned that savings to my patients by not increasing my fees for 4 years 2003-2007) and again from 2007 until the present–all while my other costs have gone up dramatically. If no one else, it has helped my patients a lot.

    Reply
    • Sounds like it has helped YOU more than your patients…based on what you wrote there. Unless you offer free medical care or see patients on a cash-only basis, your patients must pay for medical insurance ~ have you asked your patients how much “their” premiums have gone UP since 2003? Have you?

      Reply
  4. Pingback: Studies: Texas Tort Reform Has Had No Effect on Physician Supply … | Tha Malpractice Lawsuits Blog

  5. If you have a loved one who dies a terrible death in a nursing home in Texas, due to egregious mistakes ~ Be Prepared for the harsh reality of Texas’s Tort Reform.

    If you don’t have $250,000 at the very least in your bank account, it will be very difficult (since 2003) to hire a Trial Attorney ~ a Trial Attorney who can help you take your civil case before a jury of fellow Texans who will learn what happened and provide the appropriate punishment or lack of punishment based on the evidence presented in the case. So, if your Mother or Father or Grandmother or Grandfather dies in front of you due to a nurse’s or doctor’s egregious error, the nursing home facility will know in that moment that there’s very little most of us can do about it.

    Those Texas politicians who voted for TORT Reform did Texas nursing homes a huge favor in 2003 and also made it alright to be carefree with the medical care that our vulnerable loved one(s) deserve. Did you know ~ nursing homes carry very little medical malpractice insurance since 2003. And why should they?

    By default, Texas’s Tort Reform makes it alright to cover up negligence resulting in death. Most of these cases never make it into a court of law, now….so, for nursing homes in our state, there is no real incentive to correct problems. Justice? What’s that? TORT Reform provides a major roadblock to any form of justice.

    Tragically, TORT Reform has contributed to ending the lives of many older Texans ~ Texans who lived honorable lives and deserved to die peacefully and without pain.

    Reply
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  7. As the first person in Arlington to sign up as a member of Texans for Lawsuit Reform, the driving forces behiind Texas tort reform, I strongly supported their efforts. Two years ago, I started asking Dick Weekley, TLR’s founder, why insurance premiums continued to rise unabated (almost a 100% increase in 10 years). I have yet to receive an answer. Maybe D Magazine should ask him.

    Tort reform did indeed save money. It saved the insurance companies a bundle on lawsuit settlements, it saved physicians, hospitals, medical device manufacturers and drug companies by reducing their liability premiums and legal fees. It has not saved squat for the commonbred Texan.

    Futhermore, it was supposed to cut-out redundant testing and procedures performed by care givers due to their wanting to protect themselves from lawsuits. Nothing has changed. These unneeded tests and treatments are nothing more than revenue streams that the doctors and hostpitals do not want to do away with.

    Reply
    • @John Johnson: The Texas Republican Party is ruthless when it comes to maintaining power. (Just take a look at the recent redistricting maps…maps that tear apart neighborhoods and communities all across Texas.) Keeping neighborhoods and communities from forming coalitions on the really important issues in their communities is the goal. They divide and conquer by creating issues to polarize us.

      21st Century Texas Republican Party power brokers will “frame” things a certain way (so as not to sound like demonic monsters) when really they are making sure to take care of their political power. 2003 TORT Reform threw out the baby with the bathwater. And kills a lot of older Americans, too.

      Texas’s so-called TORT “Reform” prevents trial lawyers from bringing egregious medical negligence cases to the courts by setting a cap for lawsuits. It prevents Texas trial lawyers from taking on cases on a contingency basis that they have deemed violations of laws.

      Texas Republicans don’t mind hurting the everyday person from having a case brought to trial while telling us they are doing it ALL for our benefit. Realizing this is a hugely bitter pill to swallow. Ultimately, ALL Middle Class Texans lose.

      Reply
      • S

        S. Read…you’ve gone overboard in your criticism. Lawsuit reform was necessary in Texas. Frivolous lawsuits were out of control. Every plaintiff’s attorney in the U.S. wanted to file their suits in South Texas counties.

        Reply
        • Unfortunately, Texas’s 2003 TORT “Reform” is nothing more than smoke and mirrors. So, what you have here (as has already been pointed out) ~ The baby has been thrown out with the bathwater. Frivolous lawsuits can be “controlled” without giving up the rights to a trial by jury for those of us who have witnessed clear cases of medical negligence. TORT Reform is a very “lazy” reform since it sweeps everything under the carpet.

          Let’s talk about “control.” Abraham Lincoln was a trial lawyer. So, let’s not demonize them, please. Making it nearly impossible for Middle Class Texans to hire a trial lawyer is the result of Texas’ TORT Reform in 2003. This is a terrible change to our legal system. It is hurting people and making it more difficult to know when medical facilities in Texas are not doing a good job.

          We have laws and we have courts of law. TORT Reform has taken away our constitutional rights to having a jury hear about egregious cases of neglect leading to death. You clearly haven’t had a loved one die a horrific death from medical negligence (since 2003)…negligence conducted while medical personnel thought no one was watching. Let’s talk about Right- to-Life. And then let’s get rid of the shameful 2003 TORT Reform that keeps critical cases from ever being heard in our courts of law.

          Reply
        • There’s the old biased tort reform Republican meme, the Crux of it being that the People are not to be trusted to decide for themselves what is frivolous.

          Reply
      • A few years late to reply, but you are right. They have lied to take our Constitutional Rights away from us. The Tort reform comes from the British so I feel like all our Texas Republicans are in the wrong Country. What they are doing is taking our rights as Americans away from us. The CORRUPTION is so thick over this I don’t no how we can undue what they slid threw. People need to understand It is also impossible to sue a E.R. Doctor because of the way the Law reads WILLFUL AND WONTON means you need to prove that the E.R. doctor made the mistake on purpose. That in it self makes them impossible to sue. And did you know there is no CAP for an attorney on how much he can charge or take out of that 250,000.00…So it is clear this Law was passed for Doctors and Lawyers with no care for the hard working people of Texas.

        Reply
  8. Pingback: The Low Down – Another Report on Lack of Tort Reform Effects in Texas

  9. As a Texas anesthesiologist, I know that I was sued four times prior to tort reform, none of which had any merit and all of which were dropped. Even though they were all dropped, each required 1-2 years investment of my time and money for defense attorneys. I have not been sued since tort reform took effect.

    Since the passage of reform, I have heard about local cases where there were obviously huge mistakes made. In those cases, I know that lawsuits were filed and I know that some of the patients were from middle and low income families who were very unlikely to have $250,000 cash on hand to hire a lawyer. That said, I have been concerned that some have been trying to take reforms too far, where it is indeed impossible to hire an attorney. I suspect that reforms do not need to be “tightened up” any further.

    The issue of costs of health insurance premiums continuing to increase at a rapid rate is directly related to lack of regulation of insurance companies by our governor, Rick Perry. If our state does not require justifications for a company to raise premiums, there is an unchecked desire for all insurance companies to make more money. If all are playing the same game, competition will not be effective in controlling costs. One only need look at recent rollbacks in consumer protections by the TDI to confirm this. Some say this is directly related to large political contributions from health insurance companies to our governor.

    There have been no efforts made and no incentives applied to translate decreased risk of lawsuits to less “wasteful” ordering of medical tests.

    Reply
  10. S.READ, You are correct. The authors of Tort Reform, and their elected minions, our “representation”, believe that “We the People” are stupid. Unfortunately, based on the fact that we Texans blindly followed their direction, they are correct. We were “stupid” for passing this horrible law, but we now are beginning to realize we were lied to, and “we the People” will force change. Since 2003, the life of a victim, who pays the ultimate price, is considered nothing more than collateral damage for the corporate interest, who are controlling the laws being passed by their paid politicians. Those lives, who are usually our most vulnerable (our seniors, our handicapped, our poor, and our young), are not worth the reward of profits to the corporations in the state of Texas. The representatives we thought we elected have sold us down the river in favor of protecting the corporations, who fund their campaigns. Ironically, this law goes against everything a Republican is supposed to stand for. If our elected representation refuses to protect the rights and the lives of our most vulnerable, they must be replaced. They know what is happening, yet are scared that their political life will end, as it has for others, if they go against the TLR. This TLR Lobby and the TAPA Lobby have WAY too much power, and shame on our elected representation for allowing this travesty to continue.
    Can’t wait to see what new surprises, that strip away the rights of Texans, are coming this upcoming session. This “stupid” republican predicts that Tort Reform will begin expanding into other industries soon. Why not? “We the People (stupid)” believed their lies the first time around.

    Reply
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  16. They all ways get these bad bills passed by lying to the people. This tort is not good for patients it’s but it’s good for doctors. They have been given a free pass to be medically negligent because this bill protects them. The laugh is on the people receiving care! Doctors are running to states that have this devils contract tort. I know someone who died because of University Hospital. Before they died not one Lawyer in the Yellow pages would touch the case because of this tort. Imagine being told that your going to die because a procedure went wrong and not one Lawyer had the guts to take the case. This tort is evil and prevents the injured party from getting justice. People wake up! Lies about reductions in medical cost in exchange for your right to get justice. People Wake The Heck Up!

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