The Debate Over Damage Caps, Access to Care & the Cost of Medical Malpractice Claims

Diametrically opposed factions have been fighting to frame the debate over the success of the medical liability tort reforms implemented by the Texas Legislature and enshrined in the state constitution by voter approval in 2003.

On one side of the argument are those who promote non-economic damage caps as the best way to limit the number of medical malpractice claims filed, the size of medical malpractice awards and settlements as well as the overall time and expense associated with resolving medical malpractice claims. On the other side are patient-rights advocates who argue the 2003 caps on non-economic damages have blocked legitimately injured patients from the court system and had little effect on the overall cost of healthcare for Texans.

Texas House Bill 4 of 2003 limits total non-economic damages to $750,000 and a physician’s personal liability to $250,000 as well as reforms joint-and-several liability in medical malpractice cases. Voters then approved a constitutional amendment, Proposition 12, which enshrines in the state constitution the Texas Legislature’s ability to impose damage caps. This essentially eliminated the possibility of the non-economic damage caps being challenged in the Texas court system.

According to one recent study, the 2003 tort reforms have been associated with a nearly 80 percent decrease in the number of surgical malpractice lawsuits at one of the state’s academic medical centers, and that this decline in lawsuits resulted in a significant decrease in malpractice-associated costs, e.g. medical malpractice insurance. The study detailed that the prevalence of surgical malpractice lawsuits significantly decreased following tort reform—from 40 claims per 100,000 operations pre-reform to eight claims per 100,000 post-reforms. It further attributes a reduction in defensive medicine as well as significantly reduced legal costs and individual malpractice insurance premiums to the 2003 reforms.

On the other side of the ideological divide, the consumer advocacy group Public Citizen released its own report, which argues the Texas cap on non-economic damages has not reduced medical costs or curbed the ordering of expensive diagnostic tests that are the hallmark of what its opponents call “defensive medicine.” Instead, Public Citizen says that healthcare is less available and more expensive in Texas when compared to national averages. The Public Citizen report details how per-enrollee Medicare spending in Texas has risen 13 percent faster than the national average; the cost of outpatient services in Texas has risen 30.7 percent faster than the national average; diagnostic testing expenditures in Texas have risen 25.6 percent faster than the national average; premiums for private health insurance in Texas have risen faster (51.7 percent) than the national average (50 percent); and the per capita number of primary care physicians practicing in Texas has remained flat, compared to a sharp increase in the years leading up to the caps.