Proponents Laud Success of Medical Liability Reforms

It’s been a year since the voters of Texas passed Proposition 12, which ushered in reforms designed to lower the cost of medical liability insurance for doctors and health care institutions, and its supporters are declaring the measure a success to one degree or another. At least one consumer organization, however, remains skeptical.

Speaking recently at Driscoll Children’s Hospital in Corpus Christi, Texas, Gov. Rick Perry proclaimed, “One year after the Legislature and voters acted, we have good news: Texas patients are experiencing better access to health care, communities are recruiting new physicians, insurance costs are down significantly for many hospitals and some doctors, and health care lawsuits have declined dramatically. The medical insurance reforms we passed last year are working.”

Perry’s statement followed announcements by the Texas Hospital Association (THA) and the Texas Medical Association (TMA) that surveys of their respective members showed decreases in liability costs for Texas hospitals and a slowing of the pace at which Texas doctors are cutting services.

According to the THA, some hospitals began to see a drop in their premiums in 2004, with an average decrease of 8 percent. For the upcoming 2005 renewal period, a significant number of hospitals reported either a decrease or a leveling off of their premiums. A 17 percent decrease was reported by Texas hospitals for the period 2004-2005.

“The positive benefits of the comprehensive tort reform measures passed in 2003 are beginning to materialize,” said Richard Bettis, president/CEO of THA. “Patients across the state have better access to health care services, and hospitals have more resources to invest in caring for their communities instead of defending themselves against frivolous lawsuits.”

The TMA noted that while reforms are starting to positively impact Texas physicians, more remains to be done.

“We’ve started to turn the corner,” said TMA President Bohn Allen, MD. “But we still have a long way to go.

“This survey shows that Texas physicians have definitely slowed the rush to cut back on services. Some have begun to reinstate some services. But the pace of improvement will pick up when and if all professional liability insurance carriers cut their rates.”

The THA stated that although hospitals experienced a flurry of lawsuit filings prior to the effective date of the new law, nearly 40 percent of those cases were dismissed, and the number of cases filed since then has dropped 70 percent.

“I see the benefit of medical liability reform firsthand in my hospital and community,” said Dan Stultz, M.D., president/
CEO of Shannon Health System in San Angelo and chairman-elect of THA. “My hospital is beginning to see a savings in its overall liability costs, and our ability to recruit physicians—particularly specialists—has improved dramatically.”

According to the THA study, many hospitals indicated that they plan to reinvest their financial savings in patient care.

TMA conducted an e-mail survey in mid-August of 12,506 actively practicing member physicians in direct patient care. The response rate was just over 10 percent.

“During the legislative debate on liability reform and the campaign to pass Proposition 12, physicians documented how health care lawsuit abuse was constricting Texans’ access to quality medical care, especially in some parts of the state, for certain specialists’ services, and for the sickest and most seriously ill patients,” TMA’s Dr. Allen said. “Now we’re seeing the beginnings of the turnaround we expected.”

Dr. Allen noted that those specialties most affected by lawsuit abuse—notably obstetrics/gynecology, neurosurgery, and orthopedic surgery—are showing signs of improvement, but at a slower pace than other specialties.

Among the key findings of the TMA survey:
Only 13 percent of respondents said they have stopped providing certain services to patients since the liability reforms took effect on Sept. 1, 2003, down significantly from the 51 percent of physicians who answered “yes” to that question in a similar survey TMA conducted in April 2003.

Professional liability pressures were “very” or “somewhat important” factors for 90 percent of the doctors in the 2004 survey.

A larger portion of neurosurgeons (32 percent), orthopedic surgeons (24 percent), and obstetrician/gynecologists (18 percent) are still cutting back on their services.

The percentage of physicians who say they have begun denying or referring complex or high-risk cases has dropped by two-thirds, from 62 percent in 2003 to 20 percent in 2004. Another 4 percent of doctors say they have begun accepting complex or high-risk cases they had previously referred or denied, and nearly all of them based their decision on a perceived or expected improvement in Texas’ liability climate.

About one-fourth said they have tried to recruit new physicians to their practice, hospital, or community since the new law took effect last September. Of that group, 54 percent say they have found physician recruitment easier. While 46 percent said they found it more difficult to recruit new doctors, almost 19 percent of that group blamed something other than liability pressures.

Not so fast
According to the consumer rights organization, Texas Watch, Texas families have yet to see any real benefits from the reforms.

“By all measures relevant to Texas families and Texas patients, the one-year reports show that Proposition 12 has been a failure,” Texas Watch Executive Director Dan Lambe said in a statement released by the organization.

“The important measures of the impact of Prop 12 are not whether hospitals and insurance companies are making more money, but whether promises are being kept to Texas doctors and Texas patients,” Lambe said. “So far, Prop 12 has been a lesson in broken promises. Real tort reform would protect everyday Texans—not the big insurance companies and HMOs.”

Lambe pointed out that the “lower health care costs, improved quality of care, greater access to healthcare, and lower insurance premiums for their family doctors,” touted by proponents of the liability reform measure have yet to be realized in a meaningful way.

He estimated it will “be years before we know the full impact of Prop 12.”

Editor’s note: The THA study can be viewed online at www.thaonline.org/Advocacy/HospitalImpact.pdf. See the results of the TMA survey at www.texmed.org/liability/2004_liability_survey.pdf (PDF).

Topics Texas