Aug. 24, 2004

Gov. Perry Says Medical Liability Reforms are Healing Healthcare in Texas

More Doctors in Underserved Areas; Hospitals Dedicating Some Rate Savings to Indigent Care

DALLAS –Gov. Rick Perry today heralded the success that medical liability reforms – enacted almost a year ago – have had on improving Texans' access to healthcare.

"One year after the Legislature and voters acted, we have good news: Texas patients are experiencing better access to healthcare, communities are recruiting new physicians, insurance costs are down significantly for many hospitals and some doctors, and healthcare lawsuits have declined dramatically," Perry said. "The medical insurance reforms we passed last year are working."

Speaking at Our Children's House at Baylor, Perry said, "Simply put, our reforms are healing healthcare and protecting patients. And the prognosis for continued improvement is very good once the courts are unclogged from the avalanche of lawsuits filed just before the new law took effect on Sept. 1 of last year."

Perry designated medical malpractice reform an emergency issue in 2003, and the legislature passed major changes to medical liability insurance laws, which voters approved in a September constitutional amendment. Today a doctor in a malpractice case is liable for no more than $250,000 in non-economic damages, and total non-economic damages are limited to $750,000, including hospitals. Patients harmed by medical malpractice may still recover unlimited monetary rewards for actual damages such as medical expenses and lost wages.

At the same time the legislature enacted the lawsuit reforms, it also gave the State Board of Medical Examiners new authority to crack down on the small percentage of bad doctors, which Perry said is another important step in protecting patient access to quality care.

The Texas Hospital Association on Monday released results of a survey that show hospitals all across the state have seen insurance rates drop 17 percent since the new law took effect and that many hospitals are pouring millions of dollars in insurance cost savings into expanding indigent and charity care or purchasing new medical technology needed to better treat patients.

By comparison, premiums increased by an average of more than 50 percent in 2003 prior to the new laws going into effect. The impact that lawsuit reforms have had, Perry added, are "a stunning development that is great news for patients."

Perry cited several direct benefits that the new law has had in Texas, including:

The largest policy writer in Texas for hospitals, Healthcare Indemnity, Inc., has reduced rates by 20 percent.
The Texas Medical Liability Trust, the largest policy writer for physicians, reduced rates by 12 percent at the start of the year.
Ten different carriers are seeking entry into the Texas market to write physician policies, increasing the likelihood that doctors’ rates will continue to drop as competition increases.
Lawsuits against hospitals are down 70 percent from last summer, and lawsuits in Harris County have declined by seven times.

"The net effect of fewer lawsuits and declining liability costs is greater access to care and better services for Texas patients," Perry said. "Doctor recruitment efforts in medically underserved regions are finally yielding results.”

For example, between 2000 and 2003, Corpus Christi lost four neurosurgeons, 10 general surgeons, one infectious disease specialist, and one-third of obstetrician stopped delivering babies. Today, Perry noted, a turn-around is well under way.

A survey released Monday by the Texas Medical Association showed that more healthcare providers are finding it easier to recruit physicians. 97 percent of those claiming recruitment is easier said the medical liability climate was a factor.

In the Hill Country town of Fredericksburg, three obstetricians placed an ad in the local paper thanking voters for approving Proposition 12 and announcing they would resume delivering babies.

In Austin, 16 new obstetricians have started their practice in the last year, reversing a trend over the last 2 ½ years when Austin lost 16 obstetricians.

In Dallas, seven reinsurance companies are bidding for the hospitals insurance renewal, compared to just one company a year ago. Savings are anticipated to be seven figures or more.

"The facts are simply indisputable: Voter-approved medical liability reforms are healing the practice of medicine by reducing insurance costs and frivolous lawsuits, making it easier for communities to recruit new doctors, and expanding patient access to needed care," Perry added.