Wednesday, December 22, 2010

Loser Pays

Preface: On December 19, The Health Care Blog, arguably America’s most visited website and the repository of blogs by people more famous than I, e.g. George Halvorsan, CEO of Kaiser, posted a previous blog of mine. I reprint the blog here and the comments it drew.

Tort reform is a hot-button issue among physicians. It distorts the practice of medicine by compelling doctors to order tests, the lack of which, might be used against them. It makes each patient a potential enemy. It forces doctors to spend time in extensive documentation. It imposes extensive, often unnecessary, costs on the health system. And it received little attention in the new health reform law, other than being kicked down the road through a demonstration project, which will further delay the need for further action.

Well, Texas acted on tort reform back in 2003-2005, and the fruits of that reform have since become apparent. A WSJ editorial on December 15 , which I shall quote listed these benefits.

“This Texas upgrade would build on reforms in 2003 and 2005 that have vastly improved the legal climate in what has not coincidentally become the country’s best state for job creation. Texas rewrote everything from class-action certification to product liability. One success was rationalizing the asbestos-silica litigation scam. Another was an overhaul of medical malpractice laws, ending the practice of venue shopping for friendly judges and putting a $250,000 cap on noneconomic damages like pain and suffering.”

“Before the reform, Texas was a kind of holy place on the tort bar pilgrimage. Now it’s a Mecca for doctors, especially the emergency physicians, obstetricians and surgical specialists who elsewhere can face blue-sky malpractice premiums.
Liability rates have fallen by 27.5% on average since 2003. The number of doctors applying to practice in Texas has increased 60%, even as the overall population grew by 14%.”

“All of this is helping to end an acute Lone Star physicians shortage, especially in rural areas. Twenty-three counties now have their first E.R. doctor, 10 their first OB-GYN. Hospitals are reinvesting the malpractice savings in scarce services like neurosurgery and neonatal units and expanding access to care. This Texas success has opened eyes in nearby Oklahoma, where even Democrats have been forced to agree to some legal reforms.”

Source: “Loser Pays, Everyone Wins, Texas pushes the British rule on tort reform,” Wall Street Journal, December 15, 2010

Richard L. Reece, MD, is pathologist, editor, author, speaker, innovator, and believer in abilities of practicing doctors and their patients to control and improve their health destinies through innovation. He is author of eleven books. Dr. Reece posts frequently at his blog, Medinnovation.
December 19, 2010 in Policy/Politics, Richard Reece | Permalink


I think the state in which I live, Illinois, is a great example of why federal legislation is our physicians' only hope. Earlier this year tort reform (as it pertains to judgment caps) was yet again declared unconstitutional by our Supreme Court, but the case is unreviewable because it deals with our state constitution.
And as a result more potential doctors choose Dallas over Chicago...
Posted by: Richard B. Wagner, JD | Dec 17, 2010 1:41:27 PM

What we're not seeing here is the effect of tort reform on injured patients. Sure, less malpractice suits shift money from lawyers and their clients, to doctors, hospitals and insurance carriers, but who bears that cost. Capping non-economic awards means lawyers get paid from direct economic settlements, which reduces money needed by injured patients. As well the most serious injuries with the most reasons for a law suit don't get a fair hearing in court because they are too expensive to litigate given the pay back. I can only assume that non medical people who support tort restrictions and patient access to legal help have never been injured and have never needed a lawyer. Of course Richard Reece supports tort reform because (guess what) he is a doctor, but the real affects of taking away patient rights is not the rosy picture painted by Dr. Reese.

"It's a way of life in much of rural Texas, where a shortage of doctors and obstetricians means that residents must often rely on volunteer paramedics during the sometimes-harrowing drive to the hospital. And it doesn't appear likely to change anytime soon."

"Although Texas is being held up as a national example of success in limiting medical malpractice damages -- with a 51 percent increase in new doctors and a 27 percent drop in malpractice insurance rates since a law went into effect in 2003 -- the impact on consumers has been far less clear."

"The number of new doctors in family practice, the area most in demand, has increased by only about 200, about 16 percent, and more than 130 counties still did not have an obstetrician or gynecologist as of October, according to a Fort Worth Star-Telegram analysis of licensing data from the Texas Medical Board."
"At the same time, the number of specialists in Texas has increased sharply, with 425 psychiatrists, more than 900 anesthesiologists and five hair transplant physicians among the more than 13,000 new doctors in Texas in the five years after the Legislature's approval of the liability caps, the analysis found."

"More than half the new doctors settled in the state's largest urban areas, not in rural areas, where the shortage has been most apparent."

"Health care costs, meanwhile, have continued to rise in Texas. Proponents of malpractice caps predicted that costs would drop along with lawsuits and malpractice insurance rates."\

"Consumers are much worse off today," said Alex Winslow, executive director of Texas Watch, a consumer advocacy group in Austin. "Not only have they not seen the benefits they were promised in health care, but now they've lost the ability to hold someone accountable. I think that puts patients at greater risk."
And has tort reform reduced costs for patients - NO

And this:
Posted by: Peter | Dec 18, 2010 3:16:26 AM

Why not use your legislators to protect your business?Business is buying security by using legislators to provide laws that protect their interests. Patients are purposely being shoved aside from the ability to make institutions and individuals accountable.

So patients fend for yourselves because the used Car Salesman known as Lawyers won't take your case.Profits are not big enough? We all know the Texas has more than their share of hacks and quacks,but the real loss is and always will be the patients rights of having accountability.

The health industry wants to be held Harmless for absolutely everything! Even Medical errors and Hospital Acquired Staph Infections that are Preventable!!!!! So why would patients trust a bunch of liers who refuse to meet these challenges.Why should they Not be Held accountable? Why would Doctors and Hospital Administrators be so happy to have tort reform? Other then to continue their assault on the population without being accountable.

While this author prides themselves on reducing and capping injury.The author should remove his head from between his butt cheeks and clean up the industry that is becoming a disgrace and a source of infections amd medical errors.
Posted by: Gary Lampman | Dec 18, 2010 9:19:10 PM

Have health care costs dropped in Texas? Have outcomes improved? Interesting that a state with no income tax and low local taxes could not attract docs until you reformed malpractice.
Posted by: steve | Dec 19, 2010 2:20:09 PM

Looks like the butchers from the butcher shops (that have been outsourced )and the Hacks have gone to Texas because gross negligence has been rewarded with sanctioned murder. To add insult to injury, Texas has capped awards to such a small amount that a side winding snake of a lawyer doesn't see fit to strike for their next Check.

THE STATE OF Texas has permitted citizens to be cut up in chunks, removing limbs and causing life altering disabilities at the patients expense. Leaving them on the streets and destitute. It is a sad day when people are thrown out like trash and compensation for medical Errors are treated like a crime.

What is criminal, is the legislatures wrongful legislation and criminal conflict of interests. Siding solely with a profession that fails to police their own and has a proven record of Medical Errors. Ah, Maybe Mexico will invade Texas. It just may be a step up considering the Corruption in Texas.
Posted by: Gary Lampman | Dec 21, 2010 8:00:48 PM

The magical '250k' hard cap on pain & suffering as a panacea to practitioner's woes & healthcare overall. If only it were so. Yeah, it has attraced more physicians to Texas vs. other states but has it really been its most notable effect but as Peter points out it has done little to address the numerous problems that wide areas of rural Texas face in regards to access to physician services, medical cost increases, or other that proponents of the $250k cap push.

$250k cap has less to do with actually improving the malpractice process for patients and doctors alike than to handicap one of the Democrat Party's key financial contributors (e.g., trial lawyer lobby). That's it real goal.

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