[ Tuesday, September 21, 2004 ]


Update on Texas Malpractice: As discussed below, the last Texas legislature passed some fairly sweeping medical malpractice reforms, primarily non-economic damage caps. The justification was that physicians in Texas were being forced out of the market due to high malpractice premiums, and that instituting the reforms would lower malpractice costs. Trial lawyers scoffed (as trial lawyers are prone to do), and initially hospital insurance rates did drop, but most physician rates did not. TMLT, the largest physician malpractice insurer in the state, did lower its premiums, but other physician malpractice insurers did not.

News today is that TMLT is dropping premiums again. It's not a huge drop, but it shouldn't be compared to a flat rate; the comparison should be against the annual increases of past years. Additionally, even with other physician insurers not following suit, overall premiums paid by Texas physicians dropped by 3.3 percent, as opposed to a 16.4% increase without the reforms (as anticipated by the state insurance commissioner). A decrease as opposed to a double-digit increase is a pretty good result.

Additional good news is that 13 new insurance carriers have either entered the market or indicated that they would. That has been the single greatest piece of evidence that tort reform was needed. Trial lawyers and so-called "consumer advocates" who fought tort reform tended to blame it all on the greedy insurance companies, but the fact was that prior to tort reform, insurers were fleeing the Texas market. If it was all the fault of greedy insurance companies, squeezing doctors and milking the system for unconscionable profits, how come they were running away from Texas, and now they're running to Texas?

Senator Duncan may be right: it's probably too early to tell the final results of tort reform. But the evidence so far is pretty positive.

Jeff [8:52 AM]

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