Lawsuit limit may be just what the doctors ordered
Lawsuit limit may be just what the doctors ordered
Web Posted: 02/26/2006 12:00 AM CST
Travis E. Poling
Express-News Business Writer
Two years after Texas voters reined in jury awards for
medical malpractice, the medical community appears to
have gotten everything it wanted: More doctors and
fewer lawyers suing them.
On the flip side, lawyers who have made a career
handling medical malpractice cases including those
who defend doctors and hospitals are starting to
look elsewhere for work.
And patients who believe doctors or medical
institutions have injured them say they can't find a
lawyer to take their case.
This is the new doctor-friendly Texas and the model
for what President Bush would like to see duplicated
on a national scale.
Texas has about 3,000 new doctors since 2003, when
Proposition 12 capped non-economic awards for medical
malpractice against doctors and hospitals at $250,000
While proponents of the law hold this to be a
significant number of new doctors, an analysis of data
from the Board of Medical Examiners shows that rate of
increase in Texas isn't significantly higher than
before the change.
The most noticeable changes are in the number of
doctors in the highest-risk specialties. Doctors say
they aren't as afraid of lawsuits, medical liability
insurance competition is increasing, and Texans have
more access to medical care.
Greg Larcher, actuary health practice leader for
consulting firm Aon Risk Consultants, said a study
just completed by Aon for its hospital clients found
the severity of medical malpractice claims against
hospitals still is on the upswing in many states, but
that Texas has seen a dramatic reduction in the number
Dr. David Cantu sees that as a boon to patients.
Cantu, a Fredericksburg family doctor and
obstetrician, thought he wouldn't preside over another
birth after he dropped his medical malpractice
liability insurance for the obstetrics portion of the
practice to reduce his overhead.
"I was doing high volume and just not making ends
meet," Cantu said.
He and his practice partner had stopped delivering
babies for most of 2003 to save money on insurance
when Proposition 12 went into effect. He reinstated
his insurance for obstetrics at a lower rate after the
law changed and is delivering babies again.
Obstetrician/gynecologists insured by Texas Medical
Liability Trust, the largest insurer of doctors in the
state, were paying about $58,000 in 2003 for $1
million or less in liability coverage. That rate has
dropped to about $46,000 and for some doctors who
qualified for additional discounts the annual premium
was cut in half.
With less fear of lawsuits and liability insurance a
smaller part of the cost of doing business, physicians
are coming into the state or staying put after medical
school and residency, according to Jon Opelt,
executive director of Texas Alliance for Patient
Access, a lobbying group for health care and insurance
Others are expanding their practices back into
higher-risk specialties, he said.
The total number of doctors was growing before the
measure, but the numbers in several high-risk
specialties had been flat or on a slight decline after
insurance rates began to escalate in 2000 and 2001.
For example, the number of obstetrician/gynecologists
practicing in Texas declined for the first time in
more than a decade in 2002 from the previous year and
didn't begin to increase again significantly until
2004, according to data from the Texas Board of
The figures are based on data collected every year in
May by the Board of Medical Examiners, the agency that
The number of neurosurgeons in Texas had been stagnant
at about 400 from 1997 through 2002. It began to climb
in 2003 and last May reached 431.
The number of new doctors in all practices in Bexar
County was 206, or 6.2 percent growth in the two years
before the medical malpractice caps went into effect,
according to an analysis of Board of Medical Examiners
Driven by increases in emergency room doctors,
obstetrician/gynecologists, orthopedic surgeons and
neurosurgeons, the number of doctors in San Antonio
grew by 314, or 8.9 percent, from May 2003 through
The last significant jump in the number of high-risk
specialists came in the late 1990s when the economy
and the population were on the upswing.
San Antonio's Dr. Robert Kottman, an emergency room
doctor who heads the Bexar County Medical Society's
Socio-economics and Legislative Committee, believes
the upward trend will continue and is directly
attributable to the new state law.
"There's just not the economic incentive anymore for
lawyers to sue," Kottman said. "Now there's
tremendously increased access to medical care."
The number of obstetrician/gynecologists in the state
has increased by 80 since the passage of the law, and
the rare pediatric cardiologist specialty increased by
27 percent from 105 to 133 specialists in the same
period after losing doctors in previous years.
Texas Medical Liability Trust, the largest medical
liability insurance company in the state, had doubled
its rates from 1998 to 2003. Since the law passed, it
delivered a rate cut of 12 percent in 2004 and 5
percent for 2005. Another 5 percent rate cut went into
effect this year, according to the company and the
Texas Department of Insurance.
The reductions are on par with what former Insurance
Commissioner Jose Montemayor had predicted in 2004 for
A family doctor in Bulverde, for example, was paying
about $16,000 a year for malpractice insurance and now
pays only $8,000, said Dr. Bill Hinchey, chairman of
the board of trustees for the Texas Medical
Most insurers that remained in the state have reduced
rates and are taking new doctor clients, something
they had stopped doing before the new law.
Texas Insurance Commissioner Mike Geeslin, who only
took office last year, said the change "was a calming
effect in the medical community and some hospitals
have been able to recruit doctors again."
And while Geeslin said his agency will keep a close
eye on insurance rates charged to doctors, the rush of
malpractice claims before the law went into effect
could take four or five years to work its way through
the system and could result in larger verdicts. The
caps don't pertain to ongoing lawsuits filed before
the new law.
Not all are convinced, however, that there was a
crisis to begin with.
A study of Texas medical malpractice claims found no
correlation between jury awards to patients and higher
health costs or doctors' malpractice insurance rates.
Professors at the University of Illinois and the
University of Texas at Austin analyzed 150,000 Texas
insurance claims filed between 1998 and 2002 and found
that overall increases in medical malpractice claims,
claim amounts and jury awards didn't increase.
Jury verdicts awarding more than $1 million stayed
steady at about 6 percent of all claims between 1991
and 2002. Proponents of Proposition 12 sold the
referendum, in part, on the premise that Texas had
huge jury awards against doctors and hospitals.
The study authors concluded that claims had less to do
with the rising medical liability premiums paid by
doctors than the condition of the insurance market.
Insurance rates tend to be lower when the financial
markets are doing well. The firms want to sell more
policies to generate monthly premiums to invest for a
high return. But when the investment market isn't so
good, the premiums tend to go up and more accurately
reflect what the company will need to cover
anticipated claims because they can't make up the
difference with investments.
Two of the study's authors said they haven't tracked
the claim trends since the caps on non-economic
damages were put in place.
Hardship for some
But opponents of the caps, including trial lawyers,
say there is a dark side to the law.
"We have had to turn down cases every day that are
clear negligence," said Dennis Peery, president of the
San Antonio Trial Lawyers Association and partner in
personal injury firm Tyler & Peery. "You have to spend
as an attorney $50,000 to $100,000 to get their
attention," he said of suing doctors and hospitals
with the backing of their insurance firms.
Actual damages, which pay medical bills and the loss
of future income, aren't capped. And juries still can
award huge sums in damages for mental anguish or other
non-economic losses, but they're only moral victories
for plaintiffs. The highest amount paid in punitive
damages is only $250,000 per defendant and settlements
usually are even less, Peery said.
"You really can't put a number on it, but if you're
trying (a case) $250,000 is the wrong number," Peery
Graeme and Kathy Livingston have been looking for a
lawyer to sue an East Texas hospital for months and
have been turned down dozens of times.
The couple said they are living week to week in a
Lufkin hotel and that Graeme, a professional organ and
piano player from Scotland, can't earn a living
because a hospital didn't treat a bone-deep gash to
his finger even after he was admitted to the hospital.
The keyboardist's finger now is frozen in position.
Kathy Livingston said she is more concerned with
recouping money for economic damages because Graeme
can't work in his chosen profession. But the caps on
punitive damages have kept plaintiffs' lawyers from
even considering the case.
She said she didn't vote on the proposition when it
went to voters more than two years ago. She paused and
said, "I wished I had."
On to Congress
Since 2003, Texas has become the model for what
medical associations and employers crunched by high
medical costs would like to see duplicated in other
states or at the federal level.
In July, the U.S. House of Representatives approved a
medical liability reform bill, as it has every year
for several years. But, as in past years, the bill has
not moved in the Senate.
Aaron Krupp, senior counsel for the Medical Group
Management Association, which represents larger
physician practices, said some Democrats don't want to
see limits on non-economic damages and some on both
sides of the aisle think the issue should be left for
each state to decide.
Another block in the U.S. Senate is that the House
bill also applies a cap in lawsuits against
pharmaceutical companies and managed health care
firms. With high-profile lawsuits against drug makers
like Merck over the pain reliever Vioxx, giving big
pharmaceuticals a break isn't a popular stance, Krupp
The Texas laws have had at least one unintended
consequence: Even those who supported the state
legislation and ballot for liability caps have been
Pat Mizell, a medical defense attorney with
Houston-based Vinson & Elkins, said lawyers still are
busy with the thousands of cases filed before the new
laws kicked in. Those cases generally take a year or
two to wend their way through the system to go to
trial, be settled or be dismissed by the judge.
But those are slowing down, and not many new cases are
"There are quite a few people grumbling about it in
the defense bar, but it's kind of hypocritical to
gripe about something that helps your client," Mizell
Spencer Markel, a medical malpractice plaintiffs'
lawyer who worked on the other side as a defense
lawyer for 20 years, said shutting down a major
specialty in defense litigation could cause hundreds
of lawyers to close their doors or scramble to new
work as commercial litigators.
"I've got a lot of friends on the defense side that
are hurting," Markel said. "Without the volume, you
don't survive. They voted Republican all those years
and I warned them. They cut their own throats."