Texas tort reform vote signals lower liability rates

Physicians believe a constitutional amendment will ease the state's medical liability crisis.

By Damon Adams, AMNews staff. Oct. 6, 2003.

Passage of a Texas medical malpractice ballot initiative appears likely to produce the impact physicians desired -- a decrease in liability premiums. And doctor groups hope that the measure's success will spur similar action in other states.

"It's going to send a message all over the nation that it can be done. This will give greater impetus to other states," said AMA President Donald J. Palmisano, MD. The AMA contributed $100,000 to support the initiative, called Proposition 12.

The measure amends the Texas Constitution to allow caps on noneconomic damages in medical malpractice lawsuits. Within days of the vote, some insurers announced plans to reduce liability insurance rates.

For example, Texas Medical Liability Trust, the state's largest medical liability insurer, said it would cut premiums 12% beginning Jan. 1, 2004.

"We believe the 12% [reduction] is really just the start," said W. Thomas Cotten, president and CEO of physician-owned TMLT, which has about 10,800 policyholders. "Hopefully, the number of carriers will increase so there will be more sources of competition. With that competition, carriers will need to reduce their rates."

The Doctor's Company, a medical liability insurer based in Napa, Calif., plans at least a 12% reduction on $1 million policies in Texas, said Richard E. Anderson, MD, company chair. With 2,000 physician policies in the state, the insurer is looking at other potential savings to doctors and hopes to write more policies, he said.