Fictions and Facts: Medical Malpractice Litigation, Physician Supply, and Health Care Spending in Texas Before and after HB 4

Abstract

This article, written for a symposium issue of the Texas Tech Law Review, summarizes our research on the impact of Texas’ 2003 medical malpractice (“med mal”) reform. Our central findings include:

(1) there were no major changes in the frequency of med mal claims, payout per claim, total payouts, defense costs, or jury verdicts that can explain the spike in premiums for med mal liability insurance that occurred in Texas in the years before the 2003 reforms;

(2) Texas’ supply of direct patient care physicians grew steadily, at similar rates, in both the pre- and post-reform periods, despite politician’s claims that physicians fled Texas before reform and flocked back thereafter;

(3) although the damage caps adopted in Texas and other states greatly reduced the volume of malpractice litigation and payouts to patients, neither in Texas nor in other states have damage caps moderated the growth of health care spending;

(4) the savings in liability costs generated by the Texas reforms were shared between physicians and their insurers, with the former paying lower premiums and the latter collecting more premium dollars relative to dollars paid out on claims; and

(5) there is evidence that when liability rules are relaxed, hospital safety records gradually deteriorate.

Keywords: medical malpractice, insurance, tort reform, civil litigation, physician supply, insurance premiums, health care spending, jury verdicts