More Data Needed?

In 2003 Texans voted for Proposition 12, which placed limits on jury awards in medical malpractice lawsuits. Currently, the U.S. Congress and the Oklahoma Legislature, among others, are considering similar tort reform measures.

It took a while, but in recent months medical liability insurance rates for Texas hospitals and physicians have been going down. The latest insurer to announce reductions, the Texas Medical Liability Insurance Underwriting Association, said in a March 9 filing with the Texas Department of Insurance that beginning April 1 its medical liability rates for physicians would drop by 10 percent. Supporters of Texas’ Prop 12 say the rate reductions prove the effectiveness of tort reform efforts.

However, professors at the University of Texas at Austin, the University of Illinois, and Columbia University Law School recently published the results of a study they say shows that although med-mal insurance rates skyrocketed in Texas between 1999 and 2003, that spike was not matched by either an increase in the number of paid claims or an increase in the amount of jury awards.

In the abstract of Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002, Professors Bernard S. Black and Charles Silver (Univ. of Texas), David A. Hyman (Univ. of Illinois) and William M. Sage (Columbia Law School) maintained:

“Controlling for population growth, the number of large paid claims (over $25,000 in real 1988 dollars) was roughly constant from 1991-2002. Controlling for the quantity of health care delivered (based either on real health care spending or number of physicians), the frequency of large paid claims declined over this period. The number of small paid claims declined sharply. Payout per claim on large claims was constant over 1988-2002, while jury awards were constant or even declined. Real defense costs rose at 4.4% per year, and produced an average 1% annual increase in the real total cost to insurers per large paid claim. Jury verdicts showed no significant trend.”

In a commentary published March 14 in the Austin American Statesman, the researchers suggested that premium increases had a greater relationship to changes in the insurance market than to the state of the tort system.

While insurers and tort reform advocates are sure to disagree strongly with the findings of this study, the researchers did bring up an important point. That is, the availability of actual data on medical malpractice claims is spotty at best.

“The debate over medical malpractice reform has proceeded without a firm grounding in fact,” the professors stated. Texas, they say, is one of the few states that actually requires insurers to file reports on closed personal injury claims in which carriers paid out more than $10,000. They urged more states to require insurers to both collect and report data on closed tort claims so that both the tort reform debate and legislation can be based on fact.