Malpractice Reform in Texas: a Review

This is mostly from an old post (at my old blog), but with the entry of Gov. Perry into the race, it seems like time to wheel it out.

Over a year ago, a reader emailed me the following:

I’ve read your site and seen you go on and on about how malpractice isn’t the problem with health care costs.  Can I tell you how tired people are getting about your distortions?  How can you say that when there are clear examples that it’s true.  For instance, Governor Perry and Speaker Gingrich said:

Texas, for example, has adopted approaches to controlling health-care costs while improving choice, advancing quality of care and expanding coverage. Consider the successful 2003 tort reform.

Everyone knows that Texas has brought down health care costs, which is how you get more people insurance.  They’ve attracted doctors to the state.  But you deny it, even when Republicans say it over and over (and your liberal media ignores it).

When will you admit the truth?

On Sunday, Gov. Perry said:

“We’ve had the most sweeping tort reform in the nation,” he said, asserting that as a result of the law passed in 2003, there are 20,000 more physicians in Texas. He spoke of cutting taxes and sparking the best job growth of any state in the nation.

Where to start?

A lot of what I’m going to show you comes form the good work of Public Citizen.  I’m using their graphs (or creating some from their data) and cite them at the bottom.

Let’s start with what Texas did.  They capped non-economic damages on malpractice lawsuits at $250,000.  It’s pretty much what they Republicans want to do with health care reform as well (see their plan).  And, yes, let’s be honest and say that when you cap damages, the total cost of payments goes down.  For instance, here are the total malpractice payments made in Texas from 1997-2008 according to the National Practitioner Data Bank.

As you can see, total malpractice payments dropped by about two thirds since reform was enacted in 2003 (the line).  Is that good?  I don’t know.    That depends on the goal.  One goal is that it should result in cheaper malpractice insurance; it did.  But such insurance dropped on average by only 27% for physicians.  Where did the rest go?  Did the insurance companies keep it as profit?  Let’s push that off for another day.  Because no one is denying that capping damages will lower malpractice payments and therefore lower premiums.

The contention under dispute is that capping damages will be “health care reform”.

Did tort reform lower the costs of care?  Not according to the Dartmouth Atlas of Health Care (Selected Medicare Reimbursement Measures):

Hmmm.  It appears that Medicare costs per enrollee went up faster than the national average.  In fact, Texas reimbursement rates in 2007 were the second highest in the country.

Did tort reform lower the rates of uninsurance in Texas?  Not according to the US census:

In fact, Texas has the highest rate of uninsured people in the United States.

Did tort reform result in health insurance costs going down?  Not according to the Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey:

Did tort reform result in doctors flocking to Texas to practice? Not according to Public Citizen and the Texas State Department of Health Services:

Gov. Perry might be accurate in that the number of physicians increased since tort reform (but not by close to 20,000), but that’s mainly because the total population increased. Doctors did not preferentially move there above and beyond all sorts of other people in massive numbers. The number of physicians per population hasn’t changed that much.

So let’s recap.  If you believe that tort reform will work than you must believe that (1) it makes doctors want to practice there and (2) lowers medical costs which will then (3) lower the cost of insurance and (4) result in fewer people being uninsured.  And, it seems, many of you believe Texas proves this to be true.

You couldn’t be more wrong.  Since tort reform, the number of doctors per population remains stable, health care costs have gone up (along with insurance costs), and the number of uninsured remains the worst in the nation.

There are probably some examples that can support the cause of tort reform, but Texas sure ain’t one of them.  Please stop using it.

If you want to get even more detail, read Public Citizen’s Liability Limits in Texas Fail to Curb Medical Costs and Defensive Medicine and Disappearing Doctors.  And, if you are really engaged in this topic, read Tom Baker’s The Medical Malpractice Myth.

UPDATE: Edited for clarity and to add a link.

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