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Feb. 10, 2003

Medical Malpractice Insurance Premium Spikes in Texas a Result of Economic Cycle, Exacerbated by "Repeat Offenders," Study Finds

AUSTIN, Texas – The temporary medical malpractice insurance premium spikes in Texas are not caused by the legal system but by cyclical economics of the insurance industry, according to a Public Citizen report released today. In fact, the most significant long-term malpractice "crisis" facing Texans is the unreliable quality of medical care being delivered, which is a result of frequent medical mistakes and a lack of doctor oversight by the state medical board.

Government data show that "repeat offender" doctors are responsible for the bulk of malpractice payments. Between September 1990 and September 2002, 6.5 percent of Texas’ doctors made two or more malpractice payouts worth a total of more than $1 billion. These represented 51.3 percent of all payments, according to information obtained from the federal government’s National Practitioner Data Bank. Just 2.2 percent of the doctors made three or more payments, representing about a quarter of all payouts.

At a press conference held to unveil the report, Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group, also released a letter from Public Citizen to the Texas State Board of Medical Examiners, asking the board to investigate 272 doctors who have lost or settled four or more medical malpractice cases but who had not been disciplined in the past 12 years. The letter also lists 45 physicians who have lost or settled six or more malpractice suits.

Public Citizen released the report as lawmakers debate limiting non-economic damages to victims of doctor errors to $250,000 in compensation. The Texas Medical Association has hired a team of top-gun lobbyists, including the state’s former health and human services commissioner, the former insurance commissioner and the former Texas secretary of state.

"The medical and insurance lobbies are pulling out all the stops," said Tom "Smitty" Smith, director of Public Citizen’s Texas office. "But capping damages will only hurt those who have been most severely injured by doctor errors. The short-term insurance rate increases have nothing to do with the civil justice system and everything to do with insurance industry economics."

According to Public Citizen’s report, Medical Misdiagnosis in Texas: Challenging the Medical Malpractice Claims of the Doctors’ Lobby:

  • Medical errors cause 3,260 to 7,261 preventable deaths in Texas each year. These errors cost families and communities $1.3 billion to $2.2 billion annually in lost wages, lost productivity and increased health care costs. In contrast, medical malpractice insurance costs Texas’s doctors less than $421.2 million annually.
  • Financial management problems at major insurers compounded Texas’ malpractice woes; the number of malpractice insurers in Texas dropped from 17 to four during 2001 and 2002. In at least three cases, the departing companies had severe cash-flow problems that went beyond their medical liability businesses.
  • The number of doctors has been increasing steadily – not dropping, as the medical and insurance lobbies claim. Between 1997 and 2002, the number of physicians and osteopaths practicing in Texas increased from 31,459 to 37,188, an 18.2 percent increase.

In the letter to the board (also available at www.citizen.org), Public Citizen listed details pertaining to the doctors but did not name them because their identities, which are in the practitioner data bank, are not publicly available. The repeat offenders include a doctor who settled 26 malpractice lawsuits between 1994 and 2001 involving four incidents of retained foreign bodies in surgical patients, 14 incidents of improper performance of surgery, four incidents of wrong treatment performed, two incidents of failure to diagnose, two treatment-related problems, and two monitoring-related incidents. The damages totaled $4 million. Another doctor settled 10 malpractice lawsuits in 1998 involving 10 anesthesia-related problems. The damages totaled $975,000.

In Public Citizen’s annual ranking of how well states discipline doctors, Texas rates 32nd in 2001. The rate of serious actions by the Texas medical boards in 2001 – 2.5 per 1,000 doctors – is barely a quarter of the rate in Arizona, the top-ranked state with 10.5 serious actions per 1,000 physicians.

Solutions lie in reducing medical errors, Wolfe said. In addition to effective doctor discipline, states should require hospitals and other health care providers to institute meaningful risk prevention programs. Hospitals should implement measures to curb errors, such as using computers to order and track prescriptions (these can cut errors by 55 percent), requiring proper hand-washing to reduce infections, addressing the nursing shortage and reducing the long hours of medical residents. Also, insurance risk should be spread, reducing the number of classifications of doctor specialties. Risk pools for some are too small and thus overly influenced by: 1) a few losses; and 2) the concentration in a few specialties of doctors handling the highest risk patients.

"The long-term problem is a crisis of medical negligence," Wolfe said. "If the state medical board remains unwilling or unable to seriously discipline doctors with multiple malpractice payouts, then the terrible human and financial costs will continue to cause preventable deaths and injuries."

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