NO CURE: Prop. 12 is a misdiagnosis for Texas Constitution

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Houston Chronicle

As often happens in Washington, a politically sensitive report slipped out relatively quietly late in the day on the Friday before the long Labor Day holiday weekend.

The report, by the General Accounting Office, Congress’ nonpartisan research wing, deals with medical malpractice insurance and its implications for access to health care.

Since the national debate closely mirrors what is going on in Texas, it is highly relevant. Particularly so as Texans consider Proposition 12 on the Sept. 13 ballot to amend the state constitution.

The report calls into serious question the rationale for altering the Texas Constitution and should be considered as the debate goes forward

Prop. 12 is listed on the ballot as: “A constitutional amendment concerning civil lawsuits against doctors and health care providers, and other actions, authorizing the Legislature to determine limitations on noneconomic damages.”

The Legislature has already passed legislation capping damages for pain, suffering and loss of a normal life at $250,000 ($750,000 in cases involving three or more defendants). The cap is limited to medical malpractice cases, but Proposition 12 would allow the Legislature to extend it to all civil cases. It could even abolish damages outright, depriving citizens of their right to seek justice in court.

But, one of the major promises offered by supporters of Prop. 12 is that it will alleviate the “crisis” in medical malpractice insurance and thus ensure broad access to health care for patients.

The GAO report, entitled “Medical Malpractice: Implications of Rising Premiums on Access to Health Care,” is at best a mixed bag of information, but it does raise serious questions about the crisis’ rationale.

“The problems we confirmed were limited to scattered, often rural, locations and in most cases providers identified longstanding factors in addition to malpractice pressures that affected the availability of services,” the report stated.

That closely mirrors a letter sent from the Texas Department of Insurance to state legislators last year, before the most recent legislative session, which said, “Almost the entire increase in claims frequency occurs in the Lower Rio Grande Valley, which has a 60 percent claims frequency trend, meaning the number of [medical malpractice] claims filed is growing at a 60 percent per year rate. A closer analysis reveals that the 60 percent trend … is mostly due to one county, Hidalgo County. By excluding the Lower Rio Grande Valley from the analysis, the remainder of the state claim frequency is a relatively modest 4 percent per year.”

The GAO report’s authors further stated that, “many of the reported physician actions and hospital-based service reductions were not substantiated or did not widely affect access to health care.”

Enshrining in the Texas Constitution a constitutionally questionable measure such as Prop. 12 on the highly debatable assertion that it will cure medical malpractice issues is an imprudent undertaking.

But there is more. The GAO report compared states with damage claim caps to states without them. It emphasized that, to the extent that premiums or claims are lower in cap states, multiple factors are responsible.

Consider the case of one cap state, California, which is often cited by proponents of Prop. 12 and which had a problem with skyrocketing malpractice insurance rates similar to that of Texas.

A $250,000 cap was instituted in that state in 1975. However, malpractice rates continued to rise. They went up 450 percent over the next 13 years, according to the Los Angeles-based Foundation for Taxpayer and Consumer Rights.

The group was largely responsible for 1988’s Proposition 103, which gave California regulators power to investigate and regulate insurance rates and practices. (The proposition, by the way, was passed by California voters despite an $80 million insurance industry campaign to defeat it.)

Only after the insurance regulation measure was passed did rates decline.

Doctors are rightly concerned about the cost and availability of medical malpractice insurance. But it is highly unlikely that Prop. 12 will cure what ails the system. Prop. 12 is a misguided misdiagnosis.

Consumer Watchdog
Consumer Watchdog
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