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New Study: Tort Reform Has Not Reduced Health Care Costs in Texas

More than a decade ago thousands of consumer lawyers in Texas spent countless hours and a huge amount of money trying to warn voters that the “tort reform” bill passed by the legislature would NOT reduce medical costs but would only reduce patients’ rights. Study after study has confirmed our position. Now one more has been added to the pile — one more study showing that Texas voters gave up their rights for nothing. Or rather, gave up their rights simply to enrich the big insurance companies and the lobbyists employed by those companies.

The latest study was detailed in the Austin American-Statesman. Here are excerpts:

A new study found no evidence that health care costs in Texas dipped after a 2003 constitutional amendment limited payouts in medical malpractice lawsuits, despite claims made to voters by some backers of tort reform.

The researchers, who include University of Texas law professor Charles Silver, examined Medicare spending in Texas counties and saw no reduction in doctors’ fees for seniors and disabled patients between 2002 and 2009. A 2003 voter campaign in Texas, and some congressional backers of Texas-style tort reform in every state, however, argued that capping damage awards would not onlycurb malpractice lawsuits and insurance costs for doctors, it would lower costs for patients while boosting their access to physicians.

Tort reform is a controversial topic likely to be resurrected by Republicans and doctors’ groups who hoped to make it part of the 2010 federal health care law.

The researchers’ findings come after a report last fall in which the Ralph Nader-founded consumer group Public Citizen said it found Medicare spending in Texas rose much faster than the national average after tort reform. Critics of that study said that tort reform leaders never promised health care spending would decline and noted that caps on damage awards brought steep drops in malpractice insurance rates for doctors and large increases in new doctors coming to Texas.

Another study yet to be published on physician supply and tort reform, also by Silver’s group, agrees that malpractice suits and payouts sharply dropped after tort reform. But that study strongly disputes claims of a mass exodus of Texas doctors before tort reform and huge increases afterward.

On the question of health care costs, Silver’s group focused on the federal government’s Medicare program, which makes up 20 percent of the $2.5 trillion spent on U.S. health care.

That group — consisting of two Republicans, a Democrat and a foreign national, according to the researchers — analyzed data at the county level in Texas, said Tom Baker, author of a 2005 book, “The Medical Malpractice Myth,” and a professor of law and health sciences at the University of Pennsylvania.

“This is a very highly regarded study, and this team is highly regarded,” Baker said. The study was paid for by the researchers’ universities, Silver said, and the paper was published this month in the Journal of Empirical Legal Studies.

“Their results didn’t surprise me at all,” Baker said.

Medicare spending up

The researchers assumed that doctors who faced a higher risk of being sued — those in counties that had larger numbers of malpractice cases — would perform more tests and procedures than necessary to protect themselves from lawsuits. With tort reform, which limited damage awards against doctors, the need to practice such “defensive medicine” would decline, the argument goes.

But in comparing Texas counties in which doctors faced a higher risk of lawsuits with counties where the risk was lower, the researchers found no difference in Medicare spending after tort reform and indications that doctors in higher- risk counties did slightly more procedures.

“If tort reform reduces spending, it would have the biggest effect on high-risk counties,” Silver said. He noted that those tend to be large and urban.

“This is not a result we expected,” said Bernard Black, a co-author and a professor at Northwestern University’s Law School and Kellogg School of Management.

Health care spending has increased annually everywhere, the researchers said, including in the states with caps on malpractice payouts — now at 30, counting Texas, said David Hyman, a co-author and professor of law and medicine at the University of Illinois.

But, said Hyman, who worked on health policy for President George W. Bush at the Federal Trade Commission, “we found no evidence that Texas spending went up slower in comparison to all other states and may have had an increase.”

Since tort reform, some Texas residents have complained that they cannot find a lawyer to pursue a malpractice case because of the $750,000 cap on payouts for pain, suffering, disfigurement and mental anguish. The limit often makes litigation cost prohibitive, patients and lawyers said. That concern was not raised in the paper, although the researchers said claims of huge malpractice payouts and rampant “frivolous” lawsuits before tort reform are greatly exaggerated by its advocates.

Silver said he was “very pessimistic” that policymakers will heed the study. “The rhetoric on both sides tends to be very extreme,” he said.

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

About This Blog

The title of this blog reflects my attitude toward those government agencies and insurance companies that routinely mistreat injured or disabled people. As a Dallas, Texas lawyer, I've spent more than 45 years trying to help those poor folk, and I have been frustrated daily by the actions of the people on the other side of their claims. (Sorry if I offended you...)

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