Study Questions Texas Medical Malpractice Tort Reforms

A new study of call into question the commonly held belief that Texas’s 2003 tort reform not only lowered medical malpractice insurance premiums, but also attracted an influx of doctors to serve the state’s more rural patients

The 2003 Texas tort reforms are legendary in medical malpractice insurance circles. At the heart of the reforms is a $250,000 cap on pain-and-suffering, non-economic damages. In cases with multiple defendants, the non-economic damage cap is $250,000 for all defendants total. The cap is also $250,000 for a defendant hospital.

The $250,000 cap on non-economic damages is similar to California’s Medical Injury Compensation Reform Act (MICRA), which has been the gold standard of medical liability tort reforms since 1975. Where Texas differs from almost every other state is that the cap on non-economic damages is enshrined in the state’s constitution.

When other states have passed non-economic damage cap legislation, medical malpractice insurance companies generally take a wait-and-see approach before lowering premiums. Texas medical malpractice insurance premiums, on the other hand, immediately began to shrink because the Texas Medical Society and pro-tort reform groups got the legislation into the constitution via a ballot initiative effort that passed with slightly more than half of voting Texans in support. The No. 1 medical malpractice insurance company in Texas cut its rates by 12 percent the year after the tort reforms passed, and—to date—malpractice insurance rates have fallen by 27.5 percent on average

Texas has taken great pride in its medical malpractice tort reform, and the government has touted how it has attracted doctors in droves top practice in the state. Some in the state government have said that the number of doctors applying to practice in the state has grown by 60 percent.

A new paper, titled “Does Tort Reform Affect Physician Supply? Evidence from Texas,” argues that the number of practicing doctors in Texas did not increase in the wake of the 2003 tort reforms. For more information on the study, please visit here.