The Failure of Medical Malpractice Caps (Healthcare Costs Rise in Texas)

Public Citizen released a report this week on the abject failure of a $250,000 medical malpractice cap put in place by  Texas in 2003. Why is this is important? Because as I discussed  two days ago, so-called conservatives are trying to expand federal power to implement a similar scheme on the federal level.

So it’s important to note that such a scheme fails not only on the constitutional level as viewed from exercising federal power over state claims, but that it fails on a state-wide level as well in that it does not lower healthcare costs as it was intended to do. It may lower the number of malpractice suits by its grant  of protections and immunities to those that negligently injure others, but it doesn’t improve healthcare costs.

Most significantly, the report contradicts the “defensive medicine” theory, which holds that fear of litigation is to blame for stark increases health care costs. While the number of lawsuits plummeted, and with it the fear of being sued, Medicare costs rose 13% faster than the national average. According to the report, “health insurance costs have outpaced the national average and the percentage of residents lacking health insurance has risen.”

Some other findings:

Medicare spending specifically for outpatient services in Texas has risen 30.7 percent faster than the national average;

Medicare 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);

The percentage of Texans who lack health insurance has risen to 24.6 percent, solidifying the state’s dubious distinction of having the highest uninsured rate in the country;

The per capita increase in the number of doctors practicing in Texas has slowed to less than half its rate in the years leading up to the caps;

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; and

The prevalence of physicians in non-metropolitan areas has declined.

This is the synopsis of the report, from Public Citizen:

“A common perception among policymakers and pundits is that medical malpractice litigation is significantly, or even chiefly, to blame for skyrocketing health care costs and steadily diminishing access to care. But analysis of data in Texas, which in 2003 imposed some of the strictest liability caps in the country, tells a far different story. While litigation over malpractice in Texas has plummeted dramatically since the caps were imposed, residents of Texas (except for people with financial connections to liability insurance companies and, to a lesser extent, doctors) have realized few, if any, benefits. Instead, the health care picture in Texas has worsened significantly by almost any measure.”

The full report is here:   A Failed Experiment; Health Care in Texas Has Worsened in Key Respects Since State Instituted Liability Caps in 2003

I had addressed the problems in Texas back in 2009 in this post:  Do Texas Med-Mal Damage Caps Work? (What Do You Mean By Work?)

So the bottom line is this for medical malpractice caps: Injured people have the courthouse doors slammed in their faces; Those that are negligent are protected; There is zero benefit to the public at large; And insurance companies pocket most of the difference.