Is it a bad thing if physicians benefit from Texas malpractice caps?

October 27, 2011

A liberal advocacy group says that liability reform in Texas shouldn’t be a model for the rest of the nation because the only beneficiaries are doctors and malpractice insurance companies. It also maintains that healthcare is scarcer in the state and more expensive than the national average-claims disputed by supporters. You might be interested in what the report says about the drops in the frequency and dollar amounts of liability payments since malpractice caps were instituted.

Physicians definitely benefited from medical liability caps in Texas.

So says the liberal advocacy group Public Citizen, which published a report condemning the state’s 2003 liability reform, claiming healthcare is scarcer in the state and more expensive than the national average. The report also maintains that the liability restrictions prevent the most severely injured patients from being fully compensated for damage caused by medical errors and have not reduced medical costs or the use of expensive diagnostic tests.

Despite those concerns, you might consider the following information to be good news. Since the caps were imposed, the number of payments made on behalf of Texas doctors to compensate patients for medical errors fell more than 50% from 2003 to 2010, and the value of those payments fell by nearly 65%, according to the report, which noted that malpractice insurance premiums for doctors have declined, but not as quickly as insurance company costs.

“Despite the sales campaign to promote Texas as an exhibit of the merits of limiting doctors’ liability for mistakes, the real-world data tell the opposite story,” said Taylor Lincoln, research director of Public Citizen’s Congress Watch division and author of the report. “Healthcare in Texas has become more expensive and less accessible since the state’s malpractice caps took effect.”

According to the report, the following has occurred since Texas put in malpractice caps:

  • Per-enrollee Medicare spending in Texas has risen 13% faster than the national average.

  • Medicare spending specifically for outpatient services in Texas has risen 30.7% faster than the national average.

  • Medicare diagnostic testing expenditures in Texas have risen 25.6% faster than the national average.

In addition, the study maintains that the increase in the number of doctors per capita practicing in Texas has slowed to less than half the rate in the years leading up to the caps, whereas the per-capita number of primary care physicians has remained flat, compared with a sharp increase in the years leading up to the caps.

Tom Smith, director of Public Citizen’s Texas office, said, “This report shows that the rest of the nation should not hold up Texas as a model. The only winners in Texas are the doctors and the insurance companies.”

A range of Texans, including Gov. Rick Perry, who is running for president, disputed the report.

On its Web site, the Texas Alliance for Patient Access, a lobbying group representing the Texas Medical Association, the Texas Hospital Association, several nursing home organizations, and more than 250 healthcare providers from throughout the state, said that because of reforms, “doctors are flocking to Texas in record number, returning to the emergency rooms, taking complex cases, and establishing practices in medically underserved areas of the state. This has allowed more patients to get the timely and specialized care they need closer to home.”

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