5 years of tort reform: Lone Star success story

Since Texas voters approved a liability cap, specialists have been setting up practices in the state, boosting access to care.

Posted Sept. 15, 2008.

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The doomsday scenario for Texas was bleak: It was increasingly clear that without tort reforms, physicians would not be able to afford medical liability premiums, specialists would shun the state and many patients would struggle to find care.

Lone Star voters took notice and, in 2003, applied their good judgment to the problem. They approved a state constitutional amendment limiting noneconomic damages in medical liability cases to $250,000 for physicians. Five years later, the cap is being credited for slashing liability insurance premiums, boosting the ranks of doctors in the state, and improving medical access to patients.

While a comprehensive national solution has long been a goal of tort reformers -- and long blocked in the U.S. Senate -- Texas serves as a fresh example of the progress that can be achieved at the state level, first demonstrated by California's landmark Medical Injury Compensation Reform Act of 1975.

Texas physicians have witnessed a 25% overall drop in liability rates since 2003, the state insurance department says. For the first time, the state's largest medical liability carrier, Texas Medical Liability Trust, saw a 50% reduction in lawsuit filings, this from 2003 to 2008. Texas went from four insurers to more than 30 during that period.

According to the Texas Medical Board, medical license applications have soared from 2,561 to 4,041 -- a 58% jump. At the same time, the number of neurosurgeons has climbed 12%, while the supply of orthopedic surgeons has risen 9%.

The results seen in Texas, with lowered liability insurance premiums, are repeated in experiences from other states that have enacted caps of varying degrees. In February, the AMA released an analysis of independent research that showed caps on noneconomic damages are effective and have lowered premiums at least 17%, with some specialties seeing even greater drops.

Texas also is a timely example of the unfortunate reality that even carefully crafted reforms will be attacked.

The state constitutional amendment route -- as opposed to solely legislated reforms -- is seen as providing enhanced protection from challenges within the state. But like black-hat gunslingers looking for a showdown, tort reform opponents are staging a legal challenge. They say the cap won't pass U.S. constitutional muster. That case is pending in a federal court.

There have been challenges to caps in other states, including Illinois and Georgia. In both cases, lower state courts voided noneconomic damages caps enacted in the respective statehouses, setting the stage for state supreme court fights. The Litigation Center of the American Medical Association and State Medical Societies is working with those states to prove the caps are constitutional.

In fact, the AMA continues to work with many states to enact and defend liability reforms, providing everything from grants to research. These and other efforts are in keeping with the AMA's leading role as a tort reform advocate in the state and national arenas.

And there is positive news as well. This year, Colorado physicians fought off efforts to raise the state's $300,000 cap. Nancy H. Nielsen, MD, PhD, who was then AMA president-elect, spoke on the issue in the state, and the AMA gave state medical leaders important research to help their fight.

Enacting -- and defending -- state measures will be a long, tough fight. That's been the history of medical tort reform efforts in every venue, hardly surprising given the power of a well-funded and well-connected trial lawyer community. But each state victory -- and every contrast to states yet to reform -- helps make the case to bring tort reform to more places.

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