Perhaps the most visible economic impact of lawsuit reforms are the benefits experienced by Texans who have better access to high-quality healthcare. Doctors and hospitals are using their liability insurance savings to expand services and initiate innovative programs; those savings have allowed Texas hospitals to expand charity care by 24%.
This dramatic reversal would have been hard to imagine just a few years ago. Between 1999 and 2003, medical insurance premiums for many Texas doctors doubled, due to abusive litigation and excessive jury awards. As a result, Texas went from 50 insurance carriers in the late 1990’s to only four in 2003. Orthopedic surgeons, neurosurgeons, obstetricians, and other high-risk specialists were leaving the state – adding to the already critical shortage of doctors and nurses in rural areas, the border region, and many other parts of Texas.
In 2001, according to the American Medical Association, Texas’ ranking in physicians per capita was a dismal 48th out of 50.
The 2003 medical liability reforms set in motion a domino effect of immediate, positive developments across the state.
- First, in August 2004, the Texas Hospital Association reported a 70% reduction in the number of lawsuits filed against the state’s hospitals.
- Second, medical liability insurance rates declined. Many doctors saw average rate actions of over 21%, with some doctors seeing almost 50% decreases. (Recent information provided to The Perryman Group during the course of this study suggests that premiums are declining even further in 2008.)
- Third, beginning in 2003, physicians started returning to Texas. The Texas Medical Board reports licensing 10,878 new physicians since 2003, up from 8,391 in the prior four years. Dr. Perryman, subsequent to the issuance of his Report, informed TLR Foundation that at least 1,887 of those physicians are specifically the result of lawsuit reform.
- Finally, in May 2006, the American Medical Association removed Texas from its list of states experiencing a liability crisis, marking the first time it has removed any state from the list. A recent survey by the Texas Medical Association also found a dramatic increase in physicians’ willingness to resume certain procedures they had stopped performing, including obstetrics, neurosurgical, radiation and oncological procedures.
