TorteDeForm

Michael Townes Watson

THE DETRIMENTAL EFFECTS OF CAPS ON MEDICAL MALPRACTICE DAMAGES

Nearly four years after the Texas legislature passed a cap of $250,000 on non-economic damages in medical malpractice lawsuits, Texas doctors have not passed on to the consumers any of their savings on malpractice premiums, according to an article in the June 17, 2007 Dallas Morning News. Authors Eric Torbenson and Jason Roberson point out that doctors have seen their costs fall for liability insurance as malpractice insurance companies return to profitability, but there is no evidence of savings to Texas consumers.

To counteract the loss of oversight by the courts, the state gave more money and power to the Texas Medical Board, which is charged with policing the medical profession. The board's data shows it is investigating more doctors, but it's impossible to know whether the state is attracting higher-quality doctors because the board won't provide the histories of doctors coming into Texas. So the consumers, with still rising medical expenses, have no additional oversight of the new influx of physicians. But one Dallas attorney who used to defend doctors and hospitals against malpractice suits, says he believes some patients suffer from a reduced quality of care as a result of the law.

The reporters state that the law has made it economically unfeasible for lawyers to pursue many of the cases brought in by injured patients. Too often, lawyers say, even the best possible outcome in an open-and-shut case won't cover their costs, let alone provide anything for plaintiffs. That's particularly true for elderly patients and the working poor, who lose little or no earnings as a result of their injuries or death, leaving the limited pain-and-suffering damages as the bulk of any potential award.

"It's the insurance companies that are profiting here," said Paula Sweeney, a Dallas attorney whose sole practice is medical liability. In fact, insurers are profiting, after years of losses from malpractice policies in Texas. In 2004, as a result of having fewer claims to pay out, the state's insurers reported their first profit directly from malpractice premiums since the Texas Department of Insurance began tracking the information in 1992.

According to the article, some experts think there was never a crisis in malpractice premiums to begin with, saying the problem was manufactured by insurers, doctors and hospitals. Bob Hunter, Texas' insurance commissioner under Gov. Ann Richards, tracked three decades of national malpractice payments. Over the past 22 years, insurers' payouts to patients have been flat once they're adjusted for inflation, he said. Malpractice premiums rose, in part, because insurance companies were trying to make up for shrunken investment income during the queasy stock market after the Sept. 11 terrorist attacks, said Mr. Hunter, director of insurance issues for the Consumer Federation of America.

We need to communicate the message that the claimed benefits of tort reform are a façade created to enrich the insurance companies. See www.StopMedicalError.com. The Dallas Morning News article is one of the few I have seen that portrays the real downside of the medical malpractice reforms passed by the Texas legislature. Just because insurance companies are returning to the state does not mean that things are better for consumers. That would be like claiming the ducks on the edge of the pond are better off because the alligators are returning. Just because doctors are coming to the state from other states does not mean that patients are better off. If doctors are flocking to the state because of low premiums and no threat of a lawsuit, that does not insure the quality of their care.

Michael Townes Watson, author of America’s Tunnel Vision—How Insurance Companies’ Propaganda Is Corrupting Medicine and Law.

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Posted at 3:56 PM, Jul 05, 2007 in
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Comments

Actually Tort Reform has ended the doctor shortage in the Rio Grande Valley. Doctors are flocking ot Texas to open up new practices.

More Doctors means more competition. Let the market solve the problem.

Posted by: Bill Davis | July 5, 2007 5:31 PM

It appears in the above article that the author is not familiar with how physicians charge and get paid. Physicians enter into contracts with insurance carriers in which each type of service is paid at a predetermined amount. In most cases physicians do not have any leverage to encourage the insurers to pay more. (The ability to collectively negotiate is prohibited by law). Insurance companies are paying less and less for each type of service. Meanwhile overhead costs of which malpractice insurance is one is going up. You get what the insurers will pay. They do not care about your malpractice rates.

The other thing that is not considered is the pure hassle of lawsuits and the problems that it creates for physicians. It is hard to work where every minute is spent waiting to be frivoluous sued, or going though the emotional roller coaster the suits bring. Caps although not the best solution are one way to help decrease the threat of a bogus suit destroying ones career.

I think the best solution for the whole tort situation is to allow legal malpractice cases to flourish. Only when attorneys are faced with the constant threat that they can be sued at any minute for every case that they lose (or win) and all that it entails will reform be accomplished. In the meantime, look at how medicine is paid for and reform there.

Remember though, you sue for money from the insurannce companies (malpractice insurers) so insurance reform will also bite the hand that feeds you.

Posted by: throckmorton | July 5, 2007 9:20 PM

It appears in the above article that the author is not familiar with how physicians charge and get paid. Physicians enter into contracts with insurance carriers in which each type of service is paid at a predetermined amount. In most cases physicians do not have any leverage to encourage the insurers to pay more. (The ability to collectively negotiate is prohibited by law). Insurance companies are paying less and less for each type of service. Meanwhile overhead costs of which malpractice insurance is one is going up. You get what the insurers will pay. They do not care about your malpractice rates.

The other thing that is not considered is the pure hassle of lawsuits and the problems that it creates for physicians. It is hard to work where every minute is spent waiting to be frivoluous sued, or going though the emotional roller coaster the suits bring. Caps although not the best solution are one way to help decrease the threat of a bogus suit destroying ones career.

I think the best solution for the whole tort situation is to allow legal malpractice cases to flourish. Only when attorneys are faced with the constant threat that they can be sued at any minute for every case that they lose (or win) and all that it entails will reform be accomplished. In the meantime, look at how medicine is paid for and reform there.

Remember though, you sue for money from the insurannce companies (malpractice insurers) so insurance reform will also bite the hand that feeds you.

Posted by: throckmorton | July 5, 2007 9:20 PM

More Doctors means more competition. Let the market solve the problem.

Exactly ,also with more insurances companies we hope doctors can have competitive insurance premiums.Hope market solves that problem as well.

Posted by: Anirban | July 6, 2007 9:05 AM