New study: Tort reform has not reduced health care costs in Texas

New study: Tort reform has not reduced health care costs in Texas

Medicare spending up

The researchers assumed that doctors who faced a higher risk of being sued — those in counties that had larger numbers of malpractice cases — would perform more tests and procedures than necessary to protect themselves from lawsuits. With tort reform, which limited damage awards against doctors, the need to practice such "defensive medicine" would decline, the argument goes.

But in comparing Texas counties in which doctors faced a higher risk of lawsuits with counties where the risk was lower, the researchers found no difference in Medicare spending after tort reform and indications that doctors in higher-
risk counties did slightly more procedures.

"If tort reform reduces spending, it would have the biggest effect on high-risk counties," Silver said. He noted that those tend to be large and urban.

"This is not a result we expected," said Bernard Black, a co-author and a professor at Northwestern University's Law School and Kellogg School of Management.

Health care spending has increased annually everywhere, the researchers said, including in the states with caps on malpractice payouts — now at 30, counting Texas, said David Hyman, a co-author and professor of law and medicine at the University of Illinois.

But, said Hyman, who worked on health policy for President George W. Bush at the Federal Trade Commission, "we found no evidence that Texas spending went up slower in comparison to all other states and may have had an increase."

The researchers said their study suggests that Medicare payments to doctors in Texas rose 1 to 2 percent faster than the rest of the country, Black said.

Since tort reform, some Texas residents have complained that they cannot find a lawyer to pursue a malpractice case because of the $750,000 cap on payouts for pain, suffering, disfigurement and mental anguish. The limit often makes litigation cost prohibitive, patients and lawyers said. That concern was not raised in the paper, although the researchers said claims of huge malpractice payouts and rampant "frivolous" lawsuits before tort reform are greatly exaggerated by its advocates.

Silver said he was "very pessimistic" that policymakers will heed the study. "The rhetoric on both sides tends to be very extreme," he said.

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