News
May 04 2006
Editorial: Prodigal State
DALLAS -- The Senate is once again taking up the issue of medical justice reform. If senators want to expand access to health care by increasing the number of physicians and lowering costs, they need to look at Texas.
In the summer of 2003 the Texas legislature enacted important medical litigation reform. A voter-approved constitutional amendment, Proposition 12, followed later that year to solidify the changes. As a result, physicians are returning to the state, particularly in underserved specialties and counties. Insurance premiums to protect against frivolous lawsuits have declined dramatically, with the state's largest carrier reporting declines up to 22% and other carriers reducing premiums by an average of 13%. The number of lawsuits filed against doctors has been cut almost in half.
Prior to the successful reform effort, personal injury lawyers had put Texas doctors on the run. According to the Texas Department of Insurance, the frequency of claims was increasing at a rate of 4.6% annually -- between 1996 and 2000 alone, one out of four doctors was sued.
These surging legal and insurance bills reduced patient access to health care. Texas fell to 48th out of 50 in physician manpower. There were 152 medical doctors per 100,000 citizens, well below the U.S. average of 196. Some 158 counties had no obstetrician. Good, competent doctors were closing their doors, unable to afford the cost of insurance.
Other industry players suffered as well. Hospital premiums to protect against the onslaught of lawsuits more than doubled between 2000 and 2003. From 1999 to 2002, the annual per-bed cost of litigation-protection insurance in nursing homes increased from $250 to $5,000 -- a factor of 20! Texas seniors were being displaced and deprived of care, as nursing homes closed, unable to afford the cost of escalating insurance premiums.
At the core of House Bill 4, led with remarkable courage and dedication by state Rep. Joe Nixon and state Sen. Jane Nelson, was a hard, $250,000 cap on noneconomic damages for all physicians, with a separate $250,000 cap on noneconomic damages payable by hospitals and other providers. The law keeps doctors, hospitals and nursing homes liable for all economic damages assessed by a jury. HB 4 was modeled on California's successful 1975 Micra law, still on the books, keeping litigation-related costs under control and allowing competent doctors and hospitals to continue providing care.
Additional provisions of HB 4 included periodic payments for all awards greater than $100,000, procedural changes to address claim frequency, and Good Samaritan protections. This new law passed by a two-thirds majority in both chambers of the legislature and was integrated into the Texas constitution by voters later that same year. Importantly, the constitutional amendment prevents activist judges from ignoring the law and imposing a subjective opinion.
So what has happened since September of 2003, when the new law went into effect? After years of losing doctors, Texas has added nearly 4,000 since passage of Proposition 12, including 127 orthopedic surgeons, almost 300 anesthesiologists, over 200 emergency room physicians, 146 new obstetricians, 58 neurologists and 24 neurosurgeons. The Texas Medical Board is anticipating some 4,000 applicants for new physician licenses this year alone -- double last year's numbers, and 30% more than the greatest growth year ever.
The threat of lawsuits has been a particular barrier to attracting and retaining pediatric specialists. Since 2003, Texas has gained 20 pediatric cardiologists, 14 pediatric oncologists, almost 50 new perinatologists (obstetricians specializing in high-risk pregnancies), 10 pediatric surgeons and 8 new pediatric endocrinologists.
Medically underserved counties in Texas are benefiting as well. Jefferson, Webb and Victoria Counties, as well as the counties of Cameron and Hidalgo in the Rio Grande Valley, have all experienced an influx of physicians. Additionally, the market for insurance to protect health-care providers against the cost of lawsuits has become more robust and competitive. In 2002 there were only four companies writing policies. Today that number has more than tripled. And all of these trends are expected to continue.
Gov. Matt Blunt and the Missouri legislature enacted similarly tough medical liability reform in 2005. The state's citizens can expect to benefit from more doctors with lower liability premiums in the coming years as well, assuming no meddling by the courts.
The legislation to be considered by the Senate would ensure more predictability in our justice system by reining in the most egregious abuses by personal injury lawyers. In deference to states' rights, it does not pre-empt the noneconomic damage caps in place in 26 states whether they are higher or lower than the proposed federal standard. Thus, Texas, California, Missouri and Mississippi with strong caps will not be affected; similarly, a state like Nevada with weak damage caps also will not be touched. The Senate bill would only apply to states that currently have no damage caps in place.
Proper medical justice reform plays a central role in ensuring the availability and affordability of health care for families everywhere, and our elected officials should not underestimate how deeply this issue resonates with the American people. A March 2006 Gallup poll showed that "availability and affordability of health care" topped a list of 12 issues of most concern to Americans. A full 68% of respondents said they worried about this a "great deal," compared to 51% who were worried a great deal about social security, the next highest issue area.
In the coming days, our senators in Washington will have a chance to stand up with America's doctors and patients against the personal injury lawyers. Expect a brawl. On one side will be the lawyers, frantically attempting to protect and pad their wallets, while driving up costs for the American people and limiting our access to health-care providers. On the other will be the positive, pro-patient, pro-health-care story from Texas, a state which has taken an important first step toward creating a 21st-century health justice system that meets the needs of doctors and patients alike.
Mr. Gingrich is the former speaker of the House and founder of the Center for Health Transformation. Dr. Gill is an orthopedic surgeon in Dallas.
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