Does medical liability reform help the bottom lines of physicians who never get sued? Texas’ experience suggests that the answer is yes.
The board of governors of Texas Medical Liability Trust (TMLT), a physician-owned malpractice insurer, announced that it will reduce rates for the ninth consecutive year. For 2012, the average rate decrease will be 6.9%, varying by the specialty and location of the practice. In addition, the trust is paying out an 18.5% dividend for renewing policyholders, effective January 1, 2012. Combined, the rate reduction and dividend save TMLT policyholders nearly $35.8 million in 2012 premiums, according to the trust.
Insurance rates started on a downward trend when medical liability reform was passed in Texas in 2003, and with the 2012 cuts, physicians have saved $745.5 million in decreased premiums since that time, TMLT said. With the latest rate announcement, policyholders have seen their rates drop 56.7% since liability reform went into effect.
This is the seventh time TMLT has declared a policyholder dividend, which will represent about a $25.4 million benefit to the group’s policyholders in 2012.
"Physicians work within an environment of decreasing reimbursements and increasing operating costs. We are hopeful that these reductions and dividends will help physicians as they help patients," said Charles R. (Chip) Ott Jr., TMLT president and chief executive officer.
On its Web site, the Texas Medical Association (TMA) points out that all major physician liability carriers in Texas have cut their rates since the passage of the reforms, most by double-digits and by an average of 27%. That has meant $879 million in cumulative liability cost savings since January 2004, according to the association.
In addition, lawsuit filings in most Texas counties have dropped by half, TMA said.
Texas also has adopted a constitutional amendment to thwart challenges from trial lawyers, now operating under an organization called the American Association for Justice (AAJ). On its Web site opposing tort reform, AAJ argues that “Medical negligence lawsuits serve an important role in promoting public health and patient safety.”
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