The Myth of Tort Reform – The Texas Truth
Much has been said about the need to reduce the skyrocketing medical costs. One push has been for so called “Tort Reform,” or limiting the rights of injured people to seek financial damages from those who caused the injury.
The standard line from the medical and business community has been, “If we just get Tort Reform, then medical costs will drop and our insurance rates will drop.” But if we simply look at Texas, we can see that this truism is nothing but wishful thinking.
In 2003, Texas passed a hard liability cap of $250,000 per defendant. And instead of medical insurance rates going down, here is what actually happened in the six years after that law was passed, according to
1. The cost of health care in Texas, measured by per patient Medicare reimbursements, has increased at nearly double the national average.
2. Spending increases for diagnostic testing, measure by per patient Medicare reimbursements, have far exceeded the national average.
3. Texas’ uninsured rate has actually increased and is still the highest rate in the country.
4. The cost of medical insurance has doubled in 6 years.
5. The number of doctors per capita in underserved rural areas has declined.
It seems the only savings in Texas have been the doctors’ own medical liability insurance. Yet the payout decline has decreased at a greater rate than the reduction in premiums suggesting that the liability insurance companies are pocketing the difference in cost savings.
With this evidence, we can only conclude that while the cost of medical care continues to skyrocket in Texas, the only winners with the Tort Reform law have been the doctors and, to a greater extent, their liability insurance companies.
