Tort reform may actually be working

Tort reform measures in three states seem to be improving the environment in which to practice medicine, according to American Medical News (3/28/05). Texas, West Virginia, and Ohio have seen a positive effect on medical liability insurance premiums, more insurers entering their markets, or an increase in licensed physicians in their states, since each state passed legislation to help control skyrocketing medical liability costs.

In Texas, for example, a constitutional amendment was passed in 2003, putting a $250,000 cap on non-economic damages in medical malpractice cases. Since then, obstetrics groups that had stopped delivering babies because of high premiums have gone back to doing so. In addition, almost all insurers in the state have lowered liability premiums in 2005. One example is The Doctors Co., which plans to cut premiums for 90% of the more than 1,100 Texas physicians it covers. While most of them will see an average decline of 14%, some reductions could be as high as 30%.

In West Virginia, where a $250,000 cap on non-economic damages is on the legislative books, the number of new physicians licensed in the state in 2004 hit its highest level since 1999. Furthermore, increases in premiums have been less dramatic and defense costs have declined.

These three states are among the 20 that the American Medical Association has deemed in crisis because of rising medical liability premiums. In these states, physicians have retired early, stopped performing high-risk procedures, or moved their practices to non-crisis states.