Corporate Upper Class
Two years ago, Texans voted to cap the amount of non-economic damages awarded to plaintiffs in medical malpractice lawsuits. In a close 51 to 49 percent vote, one tenth of Texas voters passed the legislation known as Proposition 12.
Those who campaigned for the passage of Prop 12, said that in 2003, Texas was in the middle of a health care crisis. Proponents argued that years’ worth of frivolous lawsuits and extraneous awards to malpractice victims had caused Texas insurance companies to raise their premiums for physicians by enormous amounts. So much so, they said, that doctors were raising their patients’ costs or choosing to leave Texas altogether.
In costly campaigns totaling more than $11 million, doctors and insurance companies toted the benefits of the passage of Prop 12. Texas trial lawyers and consumer advocacy groups said however, that if passed, Prop 12 would take away Texans' consumer rights.
“For patients, Prop 12 took away their ability to hold wrong, due or accountable,” said consumer advocacy group Texas Watch’s executive director Alex Winslow. “It has been a complete failure. It stripped away the rights of patients and consumers. I think that we might have been in a health care crisis, and if we were in a health care crisis before Prop 12, we’re definitely in one now. Patients have no recourse if they are hurt by a bad doctor or an irresponsible hospital. Prop 12 has done nothing to improve quality of care for patients.”
In a recent study, the consumers’ group Public Citizen found that medical malpractice claims are the same since Prop 12. They say that the total value of medical malpractice payments to patients was basically unchanged from 1991 until 2000, and has been decreasing since 2001.
They also report that this trend is the same for the number of payments made from 16,682 in 2001, to 14,441 in 2004.
“I think that early results are indicative that it’s more successful than we thought it’d be,” Beaumont orthopedic surgeon Dr. David Teuscher said. “When you look at numbers of new insurers entering the market, decreases in lawsuits filed and doctors who have stayed in rural areas –all that translates to greater access for patients. TMLT for example, has lowered its rate 22 percent. That’s 22 percent in 24 months. Now if that’s not significant, then I don’t know what is.”
The TMLT, Teuscher speaks of is Texas Medical Liability Trust -- the largest insurer of doctors in Texas. TMLT holds nearly 40 percent of the market. TMLT did lower their rates since the passage of Prop 12, but in the three years leading up to the proposition, they increased their rates by 147 percent. Consumer advocates agree that 22 percent makes only a small dent to the increase insurance companies made just before Prop 12.
TMLT is a doctor-owned insurance company, which allows it to be free from regulation by the Texas Department of Insurance. Last year, according its annual report, TMLT declared that it had made a $50 million cash surplus from the year before. Consumer advocates such as Winslow presume that this money is because of savings from no longer having to pay large malpractice awards to plaintiffs.
“You would think that an insurance company that is owned and operated by physicians to provide insurance to physicians would be responsive to the needs of physicians,” Winslow said. “For whatever reason, TMLT is acting more like an insurance company than a physician-owned business. As an insurance company, they are more concerned with the bottom line than with charging fair rates to their policy holders.”
The second largest medical malpractice insurer in Texas, General Electric subsidiary Medical Protective, or Med Pro, is regulated by the Texas Department of Insurance. After campaigning along side other Texas insurance agencies for the necessity of tort reform, Med Pro suddenly turned rank only a month after the passage of Prop 12.
Med Pro said that they found that medical malpractice lawsuits did not have any bearing on raising the cost of insurance premiums, and that in fact, they were actually going to have to increase their rates by 19 percent. The Texas Department of Insurance, however, did not agree.
“GE, one of the largest insurers in Texas and the largest in the United States, say caps simply don’t work,” dean and professor of tort and constitutional law at Texas Southern University, L. Darnell Weeden said. “According to G.E., in regulatory insurance findings, non-economic damages are a small percent of the total. Capping non-economic damages will show a savings of approximately one percent.”
When asked if he personally experienced a savings in his insurance premium, Dr. Teuscher said that although he has yet to experience a decrease in his premium, last year was the first year that his insurance rate did not increase. He says he expects a decrease probably this year. When asked whether or not he was going to be able to pass that expected savings on to his patients, Teuscher said that he was not sure, and that the business side of physicians’ practices is very complicated.
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