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A letter to the editor re: the following article in the Statesman, 2/17/05 (link may expire 2/24/05).

February 17, 2005

To the Editors,

Stephen Scheibal's article Thursday ("Malpractice insurance rates declining") omitted the average cost of malpractice insurance protection paid to the Texas Medical Liability Trust by Austin-area doctors.

In liu of this, the average of the quoted values is $50,700. A 10% reduction would thus be a savings of $5070.

Assuming the average doctor has 1,000 patients, this works out to a 'savings' of $5.07 / patient.

Do the Legislature and Texans who voted for this cap think that agreeing to a cap of $250,000 on lawsuit awards on noneconomic damages in exchange for an approximate savings of $5 per person was a good deal?

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Malpractice insurance rates declining
Companies credit reform, though some say reductions don't go far enough

By Stephen Scheibal

AMERICAN-STATESMAN STAFF

Thursday, February 17, 2005

Two of Texas' largest malpractice insurers plan to cut their rates this year, and both credit a two-year-old tort reform bill for the discounts.

The reductions helped color the rosy picture that doctors and insurers presented Wednesday to state lawmakers. Although some say tort reform is working, others -- including some proponents of the bill -- say the reductions don't go far enough.

Maury Magids, president of American Physicians Insurance Exchange, confirmed that his company, the state's third-largest insurer of doctors, plans to cut rates on about 2,200 physicians by an average of 5 percent. Overall, the company insures 3,500 Texas doctors, about 12 percent of Texas' total, Magids said.

The Doctors Company, a physician-owned liability insurer that underwrites about 1,500 Texas doctors, will reduce insurance rates by an average of 9 percent, company officials said.

Malpractice yearly insurance rates vary according to specialty and geography. The Texas Medical Liability Trust, the largest medical liability underwriter in the state, charges Austin-area doctors $8,700 to $92,700 for malpractice insurance.

Representatives for both companies attributed the reductions to the 2003 House Bill 4, which, among other things, capped lawsuit awards on noneconomic damages, such as pain and suffering, at $250,000. Texas voters narrowly approved the caps, as required by the state's constitution.

At Wednesday's hearing of the House Civil Practices Committee, medical groups portrayed the bill as a mammoth success.

"Access to care is improving, premiums are stable or down, competition is up, and lawsuits and claims are down," said Michael Hull, general counsel for the Texas Alliance for Patient Access, a coalition that includes the Texas Medical Association and more than 250 other groups of insurers and providers.

But Rep. Patrick Rose, D-Dripping Springs, who supported tort reform two years ago, said doctors should be seeing much deeper savings. He put the goal at 17 percent, a reduction that fewer than half of Texas' doctors have received, Rose said.

As he showered faint praise on the Doctors Company and the Physicians Exchange, Rose blasted the Medical Protective Company, a subsidiary of General Electric that provides roughly a quarter of Texas' doctors with malpractice insurance. Medical Protective raised its rates by 10 percent after House Bill 4 passed and then froze them. The state is fighting Medical Protective's rate increase, and Rose said he wants to pass legislation that would enable state officials to force rate reductions on insurers protected by tort reform.

"I believe that the majority of the medical community in the state has yet to see the savings they should from medical tort reform," said Rose, vice chairman of the Civil Practices committee. "The savings of tort reform need to be passed on to doctors and patients in this state."

Malpractice lawsuit filings are down about 70 percent since the law passed, officials said, and opponents say the decline shows courts are closing their doors to many malpractice victims.

"You have a lot of legitimately, severely injured people who don't have access to justice," said Guy Choate, president of the Texas Trial Lawyers Association. "It is a crime that insurance rates aren't falling through the floor. . . . Every doctor I know is paying more."

But Rep. Joe Nixon, R-Houston, who helped author HB 4, said: "The goal of increasing access to health care has been achieved. Seldom do you see a bill designed to fix a problem be so successful."