Senator Craig Estes
The Senate of the State of Texas - District 30

For Immediate Release
May 28, 2003
Contact: Lewis Simmons
Phone: (512) 463-01301

Capitol Update
Stopping Lawsuit Abuse
By Senator Craig Estes

Texas is facing a crisis in the affordability and availability of health care. The rapidly soaring cost of health care and health insurance premiums is causing more Texans to cancel their insurance, abandon their family doctors and forcing them into emergency rooms for non-emergency cases. To deal with the problem of the uninsured, some have proposed costly government programs and even the government takeover of the health care industry with socialized medical systems similar to those in Europe.

However, before we increase the size and scope of government with bureaucrats instead of doctors making medical decisions, we should first address the cause of rising health care costs. One of the major factors forcing up the cost of health care services and health insurance premiums are medical malpractice lawsuits against health care professionals and facilities.

The State Senate recently passed a major lawsuit reform bill addressing many aspects of the civil justice system including class action lawsuits and product liability. The centerpiece of this legislation though is medical malpractice liability reform including a cap on non-economic damages. This cap on non-economic damage awards only applies to medical malpractice claims and is intended to reign in high jury awards and discourage frivolous lawsuits that are contributing to rising health care costs.

A review of medical malpractice damage awards by Jury Verdict Research found a nationwide increase of 43 percent, with an average of $1 million, in just one year. However, high jury awards are not the only problem, since not all cases brought against doctors are legitimate. In fact, according to the Texas Medical Liability Trust, 85 percent of all medical malpractice suits are closed with no liability judgment, meaning that there was no fault found against the doctor. Even though only 15 percent of all claims result in a financial judgment for the plaintiff, tens of millions of dollars are spent handling all lawsuits. High jury awards in combination with handling no-fault cases drive up the cost of medical malpractice insurance rates paid by doctors. These increased costs are passed on to patients through increased fees and doctors perform more expensive medical tests and procedures to protect themselves from costly lawsuits - a practice known as "defensive medicine." When it comes to doctors, apparently just being human is a cause for civil action.

The costs of lawsuit abuse are not just financial. Doctors in all areas of practice, from hospital emergency rooms to small family practice clinics, are leaving for fear of financial and professional ruin resulting from a continual barrage of lawsuits. A recent study by the Texas Medical Association found up to 62 percent of doctors are beginning to deny or refer high-risk medical cases, which usually more often affects pregnant women and children.

While the reform measure limits non-economic damage awards, which are unpredictable and vary from jury to jury, the measure maintains and strengthens a person's right to recover actual and future economic damages and leaves these amounts unlimited. Juries can award damages to recover medical expenses, lost wages, loss of potential future income and other related expenses. In fact, the legislation now allows juries to consider income tax statements to determine future lost income potential in assessing economic damages. When a patient is harmed due to a medical mistake, the patient deserves to be compensated for their loss and this legislation preserves the right to compensation.

Opponents claim that insurance companies providing medical malpractice coverage will not pass on the savings from tort reform to doctors paying for the coverage. However, the not-for-profit Texas Medical Liability Trust insures 30 percent of Texas doctors. This trust is required to pass savings on to policyholders. While private insurance companies are not required to pass on these savings, it is likely they will to remain competitive and keep their policyholders from switching to the lower rates offered by the Texas Medical Liability Trust or to any other company offering the savings.

Reforming medical malpractice liability is an important step in controlling and eventually lowering the cost of health care and health insurance while keeping doctors working in our emergency rooms and our family practice clinics.

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