Good for Business

The passage of medical liability reforms in Texas had physicians poised to reap long-awaited financial relief. In January 2004, TMLT cut premiums 12 percent. Other carriers subsequently followed suit, and more medical liability insurance companies entered Texas, eager to sell policies to physicians.

"The results of tort reform have been absolutely amazing," said David Teuscher, MD, chair of TMA's Committee on Professional Liability. "I don't think anyone in their right mind would have testified four-and-a-half years ago that if we pass this, you'd see physicians' insurance rates drop in half and the number of carriers multiply eightfold."

In 2003, four medical liability insurance carriers were doing business in a state that now boasts more than 30. TMLT was one of the four insurance carriers that not only endured the tort reform battle, but was instrumental in supporting Proposition 12. In 2002, TMLT helped create TAPA; its 200 members fought to pass the crucial legislation. TMLT has worked ever since to achieve meaningful tort reform and to preserve it through ensuing legislative sessions.

"Some of our competitors today who are enjoying the new, more reasonable legal environment weren't even around in 2003 when the battle for tort reform was won by TMA and the members of TAPA," said Bob Fields, TMLT's chief executive officer.

With a current policyholder count of 14,224, TMLT insures more physicians in Texas than any other carrier and has reduced rates four times: 12 percent in 2004, 5 percent in 2005 and 2006, and 7.5 percent this year. Policyholders will also receive a 20-percent dividend this year.

Since 2003, TMLT has reported a premium savings of nearly $139 million and has returned dividends of 25 percent, amounting to nearly $45 million. These dividends were declared in 2005 and 2006 for return to policyholders in 2006 and 2007. And claims intake has dropped. (See "TMLT Claims Intake, 2000-06.")

TMLT isn't the only company decreasing premiums. Last year, Advocate MD reduced premiums 19.9 percent, The Doctors Company cut premiums 18 percent, and Medical Protective lowered them 13 percent. American Physicians Insurance Company lowered premiums twice – by 5 percent and 13 percent – in 2005. The same year, the Joint Underwriting Association cut premiums 10 percent.

Getting in on the action in Texas' medical liability insurance sector was Austin-based Medicus Insurance Company, which began writing policies in September 2006. Charles Bailey, MD, was TMA president in 2003 and is now vice president of medical relations for Medicus.

"Increased competition is without a doubt exactly what we were all hoping for when we got tort reform passed," Dr. Bailey said. "The result of Medicus coming into the state has been that, as we've quoted rates to different physicians with existing carriers, the carriers almost uniformly have lowered their rates to become competitive with us."

It is most disingenuous to state that this is "minuscule fraction of health costs'. The total award payments for 2009 does not reflect the outlay of the defensive litigation and hidden costs for C.Y.A., which is estimated to be 40 to 50 billion dollars. That is not miniscule! Please explain how this litigation money helps provide healthcare?
The only reason in the State of Texas that Malpractice rewards & premiums have decreased is because in 2003 we passed tort reform with caps on non-economic damages. The result is less litigation because lawyers cannot make their many dollar 50%plus expenses.
Unfortunately, all doctors still practice defensive medicine because of the fear of delay in diagnosis lawsuit claims(C.Y.A.)
I do agree that this makes for expensive diagnosis and raises costs. Until JD no longer trumps MD; it will still be more expensive.

Regards

There isn't any!!

I have been a med mal claims guy since 1985.

Good gas mileage and prevention of drunk driving both involve cars- Thats it, no relation otherwise! They have a relationship similar to blaming the high cost of healthcare on med mal. Hey wait! look over there, a Unicorn!!

Why isn't healthcare affordable?

Lets see. protected borders, a captive audience, little regulation, no competition and a federal license to steal ( McCarron ferguson antitrust). Let us just skip over all of that and go right to the minutia. Must be the med mal.

Defensive medicine raises HC costs. Really? - it just creates an expensive diagnosis. Why is it expensive? - its the high cost of healthcare. PERIOD.

Note that the Aetnas and Humanas of the world are just brokers, with a 35% markup. They do not deliver the care, so 35 cents of every dollar does not go to fixing the sick. The gov't does it at 6% overhead. Chew on that- the gov't does it more efficiently , look at medicare or the Vet admin. A difference of 29% in a 2.5 trillion dollar industry. Could that difference pay for HC for everyone? Maybe even a new Toyota for all !!

If we want to fix the problem we at least have to look at the target before launching our fixit arrows.
regards Jim O'HAre