Office of the Governor Rick Perry

Tort Reform is Essential to Healthcare Reform

By Governor Rick Perry
Tuesday, August 18, 2009  •  Austin, Texas  •  Editorial

To hear federal officials tell it, they’ve got all the answers on health care and it’s up to the rest of us to sit, wait and embrace whatever solution — if any — they may eventually provide.

I find this troubling, since states have shown they know a thing or two about solving problems that affect their citizens.

Texas, in fact, stands as a good example of how smart, responsible policy can help us take major steps toward fixing a damaged medical system, starting with legal reforms.
   
Just six years ago, Texas was mired in a health care crisis.  Our doctors were leaving the state, or abandoning the profession entirely, because of frivolous lawsuits and the steadily increasing medical malpractice insurance premiums that resulted. 

Two thirds of our state’s counties had no practicing obstetricians, and for pregnant women that meant long trips in cramped cars and higher fuel bills.  Sixty percent of our counties had no pediatricians, which often meant delayed, or denied, health care for sick children.
   
And 24 counties in the Rio Grande Valley had no primary care doctors at all.

Each of those factors made it more likely that patients in underserved areas would postpone seeking care, which meant minor issues became major issues, and illnesses that could have been treated simply, easily and economically in the doctor’s office turned into severe health crises that had to be treated in the emergency room. 

And the situation was worsening with every passing day.  By 2002, 13 of the state’s 17 liability insurance carriers had left Texas, leaving less competition and leaving doctors with insurance bills that were seeing double-digit increases, if they could get insurance at all.  That same year, applications for medical licenses plummeted to the lowest level in a decade.

This being Texas, instead of throwing money at the problem or debating endlessly, we identified the root causes and decided to do something about it.

In 2003, I declared the medical liability crisis an emergency item, and the legislature responded, passing sweeping reforms that protected the patient, but also shielded doctors and hospitals from unscrupulous trial lawyers eager to make a quick buck at the system’s expense. 

We capped non-economic damages at $250,000 per defendant, or up to $750,000 per incident, while placing no cap on more easily determined economic damages, such as lost wages or cost of medical care due to injury.  We ended the practice of allowing baseless, but expensive, lawsuits to drag on indefinitely, requiring plaintiffs to provide expert witness reports to support their claims within four months of filing suit or drop the case. 

These measures were supported by the people of Texas, who in September of 2003 approved a ballot measure, Proposition 12, authorizing all of these changes.

Changes were seen immediately, and continue to be felt.  All major liability insurers cut their rates upon passage of our reforms, with most of those cuts ranging in the double-digits.  More than 10 new insurance carriers entered the Texas market, increasing competition and further lowering costs.

As a result, Texas doctors have seen their insurance rates decline by, on average, 27 percent.

The number of doctors applying to practice medicine in Texas has skyrocketed by 57 percent.  In 2008, the Texas Medical Board received 4,023 licensure applications and issued a record 3,621 new licenses.

In all, in just the first five years after reforms passed, 14,498 doctors either returned to practice in Texas or began practicing here for the first time.

And our reforms finally brought critical specialties to underserved areas.  The number of obstetricians practicing in rural Texas is up by 27 percent, and 12 counties that previously had no obstetricians now have at least one.  The statistics show major gains in fields like orthopedic surgery, pediatrics, neurosurgery and emergency medicine.

The Rio Grande Valley has seen an 18 percent growth in applications to practice medicine, adding about 200 doctors to this critically underserved area.

And what about the money that used to go to defending all those frivolous lawsuits?  You can find it in budgets for upgraded equipment, expanded emergency rooms, patient safety programs and improved primary and charity care.

Success stories like ours need to be told, and need to be remembered as we continue this national debate. 

Instead of handing down “one size fits all” mandates on how it’s going to be, Washington should be enabling states to set their own agendas, and solve their own problems, when it comes to health care.

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