Jobs and access to health care figure prominently in the current national dialogue. Though not often mentioned together, eight years ago, Texas tackled these issues together through aggressive tort reform measures.
Prior to 2003, Texas was in a medical crisis. Doctors were being sued at record levels – and for record sums – because there were no limits on non-economic damage awards. One in four doctors had a claim filed against them each year. Although 85 percent of those malpractice claims failed to reach trial, they still cost an average of $50,000 to defend. And for those that did reach trial, the cost was rising as well, to about $1.4 million.
As a result, many doctors were choosing to leave, or simply not practice, in Texas. In 1998, there were 2,866 newly-licensed physicians in the state. By 2002, that number dropped to 2,110, even as the general population in Texas was expanding.
By 2003, Texas ranked 49th out of the 50 states in doctor-per-citizen ratio. Out of Texas’ 254 counties, more than 150 did not have an obstetrician, and 120 did not have a pediatrician.
In the two years preceding reform, some 5,001 high-risk specialists limited their practice, leaving only 5,674 of the 10,675 licensed high-risk specialists actually providing a full range of services to their patients. Many cities had no neurosurgeon and no orthopedic surgeon. Away from the larger urban areas, people were literally dying because there were not enough emergency personnel to provide critical care. The Texas Legislature realized that something had to be done quickly, or risk many Texans going with little or no health care.
In 2003, Texas reformed its laws regarding medical lawsuit abuse. Since enacting reforms, 24,853 new physicians have been licensed in Texas. Incredibly, the reversal in the number of newly-licensed physicians is only part of the story. The Texas Medical Board has received 83 percent more applications and has licensed 60 percent more doctors in the past four years than in the four years preceding reform. Since 2003, more than $7 billion has been invested into the state’s medical infrastructure. According to the Texas Medical Association, Texas today has more physicians per capita than ever before.
Texas is also seeing doctors return to previously underserved areas, giving health care access to Texans that previously did not have any. The number of obstetricians practicing in rural Texas has grown by 27 percent. Twenty-two rural Texas counties have added at least one obstetrician since 2003, including 10 counties that previously had none. Post-reform, Texas has licensed 212 orthopedic surgeons, representing a 15 percent increase in the number of Texas orthopedists in the past six years.
The medical job growth and subsequent expansion of health care has much to do with the passage of medical malpractice tort reform. According to a Texas Medical Association survey, nearly 95 percent of physicians who were in residency or practicing medicine in another state in September of 2003, and who later came to Texas, said Texas’ liability climate was “very important” or of “moderate importance” in their decision to practice in Texas. Nearly 80 percent of the responders rated Texas’ liability climate as “better” or much better” than the state in which they previously practiced.
Anyone claiming that the rise in physicians is due largely to population growth ignores the fact that while Texas’ population was growing prior to 2003, the number of newly licensed physicians declined almost 30 percent during the preceding five years.
Tort reform saved Texas from a medical crisis and created more jobs. Just like the rest of Texas’ limited-government approach, this is a good model for the rest of the country to follow.
Ryan Brannan is an economic freedom policy analyst at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.