False Diagnosis

From The New York Times OP-ED, Thursday, March 10, 2005; A27
False Diagnosis
Don't mess with Texas tort system
By Bernard Black, Charles Silver, David Hyman and William Sage
Austin, Tex.
Medical malpractice litigation reform is a high priority for President Bush, who contends that juries are running amok, multimillion-dollar settlements are on the rise and greedy trial lawyers are filing frivolous suits. The results, Mr. Bush and others argue, include skyrocketing insurance prices, abandoned medical practices, defensive medicine and a crisis of access to care. Their proposed solution: caps on jury awards to patients and on lawyers' contingent fees.

No one disputes that insurance premiums have risen significantly. The question is whether a crisis in states' tort system accounts for the increase. Consider Mr. Bush's home state of Texas, America's second most populous state and the third largest in terms of total health care spending. After studying a database maintained by the Texas Department of Insurance that contains all insured malpractice claims resolved between 1988 and 2002, we saw no evidence of a tort crisis. Adjusting for inflation and rising population, we arrived at the following findings:
Ø Large claims (with a payout of $25,000 in 1988 dollars) were roughly constant in frequency.
Ø The number of total paid claims with payments of more than $1 million remained steady at about 6 percent of all large claims.
Ø The number of total paid claims per 100 practicing physicians per year fell to fewer than five in 2002 from greater than sic in 1990-92.
Ø Mean and median payouts per large claim were roughly constant.
Ø Jury verdicts in favor of plaintiffs showed no trend over time.
Ø The total cost of large malpractice claims was both stable and a small fraction (less than 1 percent) of total health care expenditures in Texas.

In short, as far as medical malpractice cases are concerned, the Texas tort system has been remarkably stable. Texas' situation is not unique. One study of Florida's experience from 1990 to 2003 also found declines in paid claims per 100 practicing physicians as well as per 100,000 population. Over the same period in Missouri, the total number of malpractice claims fell by about 40 percent and the number of paid claims dropped almost by half.

Malpractice premiums have risen sharply in Texas and many other states. But, at least in Texas, the sharp spikes in insurance prices reflect forces operating outside the tort system.

The medical malpractice system has many problems, but a crisis in claims, payouts and jury verdicts is not among them. Thus the federal "solution" that Mr. Bush proposes is both overbroad and directed at the wrong problem.

Bernard Black and Charles Silver are law professors at the University of Texas at Austin. David Hyman is a professor of law and medicine at the University of Illinois. William Sage is a law professor at Columbia


Well, academia is chiming in. Perhaps some business professors will look at the actuary's statements for the insurance industry over the same period. I won't be holding my breath. It is not news that the president bush is in the pocket of the insurance industry. It is news that a group of academics is attacking his plan. Ordinarily, professors risk being cited as partisan and using their influence to slant the minds of our youth. Kudos belong to these four for entering the public dialogue and for spending the time studying the data. Their example should be followed.