Medical negligence damage caps in Texas benefit only doctors, insurers


While limits on damages awarded to victims of medical negligence in Texas have been touted as a model for America, a study by the watchdog group Public Citizen shows Texas’ damage caps aren’t providing benefits to consumers. According to the report:

The only improvement in Texas since 2003 has been a decline in doctors’ liability insurance premiums. But payments by liability insurers on behalf of doctors have dropped far more than doctors’ premiums. This suggests that insurers are pocketing more of the savings than they are passing to doctors.

There is no evidence that any of the savings has been passed on to patients or taxpayers more generally. (emphasis added) The data suggest that Texas liability “reform” is just a giveaway to liability insurers and, to a lesser extent, doctors.

The potential for large damage awards to victims of medical negligence is thought to lead to “unnecessary” testing and lab work, which supposedly would give doctors a better chance to defend themselves from allegations of malpractice. 

But the Texas experience shows no evidence that capping damage awards leads to a reduction in such procedures.  In fact, in Texas the experience has been just the opposite.

According to the Public Citizen study, Medicare reimbursements for diagnostic, x-ray and lab services in Texas grew by 16 percent from 2003 to 2007, while nationally the increase was only 10 percent.

Senator Jon Kyl (R-Ariz.) has pointed out that the number of Texans with health insurance has increased by 400,000 since damage caps went into effect in 2003 and implies that the caps have made health insurance more affordable, allowing more people to afford coverage. 

What Kyl doesn’t say is that the population of Texas has increased by more than 2.7 million since 2003, according to Texas Department of State Health Services estimates.

Public Citizen points out that the percentage of Texans without health insurance has actually increased since the institution of damage caps, from 24 percent in 2003 to 25.1 percent in 2008. Both figures were the highest in the country, and the rate of uninsured has increased faster than the national average since 2003.

Have damage caps brought down the cost of health insurance for Texans? The state ranked 33rd in cost of health premiums in 2003; it still ranked 33rd in 2008. Health insurance premiums have increased in Texas by almost the same rate as the rest of the nation over that period.

But while consumer health insurance costs in Texas have gone up, the medical malpractice insurance premiums paid by doctors have gone down 27 percent.  And the malpractice payouts by insurers have gone down 67 percent. Which leads to the question:  who is really benefiting from damage caps?

Have damage caps resulted in an influx of new doctors to Texas to provide greater access to medical care, as Kyl contends? According to the Texas Department of Health Services, the number of doctors per capita in the state has gone up a whopping 0.4 percent in the six years since caps were enacted. 

In the six years before caps, when damage awards were unlimited, the number of doctors per capita rose 8.7 percent. So it’s hard to see where caps have produced a stampede of doctors.

And caps have had no effect in rural Texas, where malpractice costs were frequently blamed for doctors leaving the business. Again according to the Texas Department of Health Services, the number of doctors per capita in rural counties went up 6.8% in the six years before caps…but has gone down in the six years since caps. 

In 2007 there were more counties in Texas that did not have an obstetrician or gynecologist than was the case before caps were enacted.

This is not to say that malpractice damage caps were the cause of consumer health insurance premiums rising while doctors’ malpractice premiums were falling, or a reduction in the per capita number of rural doctors, or an increase in the number of uninsured Texans. On the other hand, there doesn’t seem to be anything positive to point to, other than lower costs for doctors and insurers that don’t seem to be passed along to consumers.

In the meantime, limits on damage awards have one inarguable affect:  Texans most severely harmed by medical negligence do not receive just compensation for their injuries as determined by a jury of their peers.

J.G. Preston has three decades of news experience, including 20 years working for public television in Minnesota, and four working for commercial television and radio in Sacramento, and currently serves as press secretary for Consumer Attorneys of California. is a project of Civil Justice Research&Education Project. The site’s goal is to honestly report on consumer, legal and political issues important to the American civil justice system.


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