Fox News Investigation Tells Truth About Tort “Reform”
This local Fox channel did an informative investigation into tort "reform" and medical malpractice in Texas. You can watch the video here. The report asks three important questions: 1) Was tort “reform” necessary? 2) Is it working? And 3) Are Texans benefiting?
The news segment starts off with a couple recalling their heart-wrenching experience losing their newborn son who was brain damaged from what they suspect was a medical error. Having no access to information about what went wrong, the couple wanted to sue. But four different lawyers told them it would take between $50,000 and $90,000 just to get into court, and with an arbitrary cap on non-economic damages preventing them from recovering any more than $250,000 for their child's death, they just couldn't get a lawyer. From the report:
In November 2003, voters approved prop 12. That put a cap on claims that do not involve economic loss, but instead involve pain and suffering, like the loss of a baby. Now, if you sue and win, the most you can collect from a doctor's insurance is $250,000.
Well, if people were getting those million dollar verdicts left and right, from those irrational, emotional juries, then this $250 cap might be reasonable, right? Wrong...
In 2003, when reformers cried crisis, if a Texan won a malpractice payout, it averaged $224,652 . Then national average that year was $290,730. Texas had the 37th lowest payout in the country.
But it still reduced doctors malpractice premiums, right? Well, not exactly. A first round of tort "reforms" by then-Governor George W. Bush required insurance companies to cut back doctor's insurance premiums for 5 years--something that would make sense if tort "reforms" are really targeted at helping doctors. But after the five years, the insurance companies just sent those premiums skyrocketing right back up:
"Another matter which is often not discussed was that Texas passed a series of reforms in 1995," Opelt said.
He was talking about the previous tort reforms, passed under then-Governor George Bush. A companion bill ordered five years insurance rate drops. The drops were significant. According to a Texas Department of Insurance (TDI) report , the cost of Medical Malpractice Insurance for doctors was 21% lower than regulated insurers wanted in 2000. For hospitals, the state ordered rates reduced by 24%.
Opelt said, “About the time the rollbacks were lifted was the time the rates really began to spike.”
...Tort reformers themselves admit prior tort reform was at least part of the reason that insurance rates spiked.
No matter that insurance companies had been undercharging doctors under the 1995 tort "reform" companion bill requirement, and then caught up for lost profits by milking doctors at high rates after the requisite time period ended. Tort "reformers" then used the skyrocketing rates as a reason to haul in more tort "reform" to make it even more difficult for patients with legitimate medical malpractice claims to pursue justice, and even more profitable to be in the insurance business:
Texas insurance companies definitely benefited from tort reform. After losing money for years, they started making money big time.
According to the National Association of Insurance Commissioners , companies selling medical malpractice insurance in Texas made $807,325,106 profit in the first three years following tort reform. In 2006, more than 50 cents of every dollar collected was profit.
More on this to come. In the mean time, check out this radio segment discussing the Fox report. Also visit the Fox Website for access to the various reports and studies referenced in this investigation.