Texas holds 'em: how Lone Star republicans stopped abusive medical-malpractice lawsuits

National Review, May 5, 2008 by Kevin D. Williamson

THAT high lonesome sound you hear ululating over the wideopen Texas prairies isn't coyotes--it's hungry trial lawyers, forced to subsist on 40 percent of a litigation pie that has gotten a little bit smaller of late.

When Texas Republicans finally took control of the Texas legislature in 2003, tort reform was among their cardinal concerns. But legislation was only part of the fight. Several bare-knuckled political battles, the constitutional amendment known as Proposition 12, and five Rick Perry appointments to the state supreme court have entrenched a battery of reforms, including a cap on non-economic damages in medical-malpractice cases and several measures designed to keep frivolous lawsuits out of court in the first place. The guys in the ambulances are raising a joyful noise; the guys chasing behind are raising hell.

Tort reform will be the cornerstone of Governor Perry's legacy, and other governors should mark what it accomplished: Legislators had to approve emergency funds for the Texas medical board, which was overwhelmed by applications from other states' refugee doctors. Politicians rarely boast about bureaucratic backlogs, but Perry is happy to note that thousands of physicians clog the pipeline for licensure. "I'll take that problem," he says.

Texas had seen new applications decline for years, but now they're up 60 percent. The board has licensed nearly 11,000 physicians in the four years since tort reform was enacted. Regions where specialists were difficult or impossible to find have attracted new talent. The number of insurance companies has increased from four to more than 30. That new competition has driven malpractice-insurance premiums down by up to 20 percent for some doctors.

All of this is gratifying to the legislation's author, former state representative Joe Nixon--himself a trial lawyer with the firm of Beirne, Maynard, and Parsons, as well as a senior fellow at the Texas Public Policy Foundation. "We had a neurosurgeon move to Corpus Christi. He was the only one they had--there wasn't one there before him," he says. "He'd been there a week when a man walked into his office with an abscess on his spine. He was put into surgery immediately. He had an hour-one hour-or he would have been certainly paralyzed, probably dead. Today, he's alive and walking. The physician who treated him came to Corpus because of Proposition 12." That doctor, Mathew Alexander, told the Corpus Christi Caller-Times: "Practicing defensive medicine is expensive and doesn't provide good care. I know a lot of doctors are really bitter about it."

Timothy George, a pediatric neurosurgeon, was also drawn to Texas in part by the friendlier legal environment. He says that tort reform makes it easier for him to recruit other physicians to his practice. George argues that reining in the lawyers will help lower health-care costs-not only by reducing doctors' insurance premiums, but also by taking away the pressure to order unnecessary tests and procedures for no other reason than to head off potential liability. "Reducing cost puts less pressure on physicians to increase revenues to offset malpractice, allowing doctors to spend more time focusing on their care of patients. This reduces the leading cause of malpractice suits, which is negligence."

Texas had flirted with tort reform before--legislation was passed in the 1970s, but the Texas supreme court declared it unconstitutional. Proposition 12, which won voters' approval with a supermodel-slim margin, amended the state constitution to make explicit that the legislature, not the courts, would have the final say in medical-malpractice matters. In the House, Nixon combined a sundry selection of tort-reform initiatives, dealing with everything from medical malpractice to asbestos to the liabilities of charitable nonprofits, into an omnibus reform package.

With the law in effect, Texas still has no ceiling on economic damages-compensation for the plaintiff's quantifiable, dollars-and-cents losses. Punitive damages also are available, though they're sparingly awarded. But in medical-malpractice cases, non-economic damages-"pain and suffering" or "mental anguish" awards-are limited to $250,000 for a single doctor. Up to three doctors at a health-care facility (hospital, nursing home, or clinic) can be sued, for a total of $750,000 in non-economic damages.

And that has put a Texas-sized bee in the bonnet of the trial bar, the members of which are practically chewing their tassel-loafers in rage. West Texas plaintiffs' attorney Charles Dunn, who swears that he has "never"--never--seen a jury award that was too high, is bitterly critical of the reforms. But he offers a backhanded compliment: "Lawyers won't take these cases on a contingency fee when they're capped, and that's reduced the number of cases." Reducing the number of cases was, after all, the point.

Nixon celebrates the effect of the cap, but he argues that states interested in emulating Texas's success should look first to another part of the legislation. "I think one of the best things we did is to put up a hurdle at the beginning of the lawsuit," he says. "We've required that, within 120 days, an expert report be filed by a doctor, in the same or a similar field, who says that there was a breach in the standard of care and that that breach was the proximate cause of damages. If you don't have that report, your case is dismissed.... I think that report has made a bigger difference than the caps." Plaintiffs can pay doctors to write those reports, just as they pay expert witnesses.