“The way our system should be working, and the way it was designed by our founders to work, was this: on a case-by-case basis, judges and citizens would sit and hear evidence, and then weigh it based on the law,” says N. Alex Winslow, the executive director of Texas Watch, an Austin-based bipartisan consumer advocacy group. “And then they would make a decision whether someone was at fault or not, and if so, how much.” (5)
This is the way malpractice cases worked in Texas until the early 2000’s, albeit the pendulum had swung to the side of the plaintiffs, and some attorneys were making hundreds of millions trying cases. A group of four wealthy businessmen whose businesses had been profoundly threatened by tort lawsuits against them, decided that “for the good of all” there needed to be reform. With intense lobbying and political wrangling, tort reform laws were passed in 2003. Since one part of the law violated the section of the Texas constitution guaranteeing access to the courts, the intense lobbying continued to have the people vote for Proposition 12, an amendment to the constitution which allowed the law.
(“Backers of tort reform knew that the state constitution—not to mention the federal constitution—was very clear that Texans have a right to…go to court and hold someone accountable by presenting evidence to a jury of your peers,” says Winslow. And so, that September, an amendment to the Texas Constitution known as Proposition 12 was put on the ballot. It was voted down in every major metropolitan area in the state, but the rural counties—convinced they would lose what few doctors they still had—voted in favor. By a razor-thin 1.2 percent margin, Prop 12 became law.” 5) (Bold mine.)
(The fight over Proposition 12, as the constitutional amendment was called, presented the people of Texas with a Hobson’s choice: access to medical care versus access to the courts. On one side were doctors, insurance companies, and business interests, who claimed that physicians would leave the profession if malpractice insurance rates were not reduced; on the other were trial lawyers and consumer groups, who said that injured victims would have no recourse if the caps took effect. Each put harrowing statistics and shrewd emotional ploys to work, and each side spread around plenty of money—about $4 million came from the trial lawyers and their allies and $8 million from an agglomeration of pro-amendment groups, including TLR.
The amendment authorized a $250,000 cap on noneconomic damages in malpractice cases “and other actions,” three words that sent opponents of the proposition into a fury because they allowed the Legislature to cap damages not just on malpractice cases but on every personal-injury lawsuit, whether it involved drunk drivers or corporate polluters. Trabulsi suggested that no one in his right mind would take that possibility seriously, but retired U.S. district judge Finis Cowan, who had been a highly regarded defense lawyer at Baker Botts, strongly disagreed in a State Bar of Texas publication on the debate. “Clearly Prop 12 is not a medical malpractice reform,” he wrote, “but an amendment designed by special interests who have reasons for desiring to restrict access to courts and juries.” 4) (Bold mine)
The tort reformers contended that because of frivolous lawsuits and a lack of caps, high medical malpractice insurance premiums were forcing doctors to leave the state or retire early. That created a shortage of doctors particularly in rural area. They said that for fear of lawsuits, doctors who were still practicing were employing defensive medicine, i.e. ordering extra, unnecessary and expensive tests and procedures. That was driving up the cost of healthcare for everyone. They also contended that the economy was not as robust as it would otherwise be were not the justice system out of control.
What are the Effects of Malpractice Tort Reform in Texas?
- The number of lawsuits filed has dropped substantially. (14)(1)(11)(5) Under caps fewer cases are worth bringing. 70% decrease in medical malpractice claims. (9)
- The average amount of damages awarded fell, as would be expected with a cap. (14) Caps reduced damage awards by 73%. (1) Malpractice claim payouts dropped more than 75%. (9)
- Malpractice premiums are lower. (6) (11) As much as 50% lower. (1)(9)(5)
- Healthcare costs are not reduced. (10)(6)(5) The practice of defensive medicine remains about the same as before; costs are the same or higher. No reduction in doctors’ fees for senior and disabled patients between 2002 and 2009. (11) Lower malpractice premiums have not resulted in lower costs for patients. Patients’ health insurance premiums have gone up. Healthcare spending has increased annually everywhere including in the states with caps. (11) (9)
- No effect on physician supply. (11) (13) (1) Texas still has a lack of doctors, especially in rural and poorer areas. Statistics about new licenses issued do not take into account doctors retiring or leaving the state, and physicians who do research or teach and do not care for patients. Claims of a mass exodus of Texas doctors before tort reform and huge increases afterward are strongly disputed. (11)(9) Physician growth in rural Texas fell by 1% since reform, after having grown more than 23% before. (Study in the years 1996-2010.) (9)
- No effect on the economy. The purported lagging economy before tort reform did not exist. (4) “A 1994 Bureau of Labor Statistics report failed to uncover any decline in the Texas economy that could be attributed to frivolous lawsuits; Texas, in fact, led the nation in the number of new jobs created that year. . . Fortune magazine reported that, in the last quarter-century, Texas had enjoyed a 311 percent increase in Fortune 500 companies headquartered here.” (4)
- Fewer lawyers practicing tort law because many meritorious cases are not economically practical. (The big goal of tort reform was to get rid of lawyers.) (4)(5)(12) The cost of preparing the case, paying expert witnesses, trying the case is too high to be covered by the cap limited damages. (4) Fewer health care clients (hospitals, healthcare corporations, nursing homes) are being sued so they have no need for a lawyer (12)
- By setting caps and determining process and procedure for tort cases, the legislature has decided rather than a jury, taking away the right to a jury trial. “No recourse through courts; no day in court.” (4)(5)
- Harder for the injured of limited means to sue, to hold the wrongdoer accountable. Non-economic caps mean many injured cannot afford to sue; they cannot find a lawyer to take the case because it’s not economically practical. (14)(4) Attorney contingency fees are a device that is the only way people of limited means can get to the courthouse. (The lawyer fronts all the expenses and gets reimbursed and paid only if the client wins.) Limiting these attorney fees blocks the door to the courthouse for the average citizens. (4) Lawyers who are still taking liability cases are able to pick well-off clients who can show economic damages and expect high payouts. (12)
- Less accountability for negligence or error. (1) (2) A principle goal of tort law is to alter negligent behavior. With tort reform, wrongdoers are able to avoid liability. (4) Tort reform has slowed down progress in patient safety initiatives, e.g., before tort reform, documented reforms in anesthesiology in 1980’s were the result of frustration with large malpractice verdicts against anesthesiologists. In 10 years, mortality rate from anesthesia dropped from 1 in 6,000 to 1 in 200,000. (6) (Without the threat of lawsuits, there is no motivation to avoid carelessness and negligence.)
- Medical errors are increasing. Strong evidence that patient safety gradually falls after the reforms. (2) 10% of all U.S. deaths are now due to medical error. The third highest cause of death in the U.S. is medical error. (16)
- Nursing home negligence and abuse are up, but those harmed have very little legal recourse. 25% of Texas’ 1,200 long-term care centers have been cited for serious standard deficiencies. (20) How many others are getting away with maltreatment, abuse and neglect? Tort reform is not a solution to reforming a “shamefully poor” industry, but strong enforcement of policies already in place, new policies and tightening the weak regulatory system would be a start. (20)