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Feb. 11, 2003

Gov. Perry Has "Wrong Diagnosis, Wrong Prescription" for Malpractice Insurance Spikes

Data Show Doctors Not Leaving State

AUSTIN, Tex. – Public Citizen today disputed Gov. Rick Perry’s assertion that doctors are leaving Texas because of the high cost of malpractice insurance and said his proposed $250,000 cap on non-economic damages would harm the most severely injured patients while doing nothing to bring down malpractice insurance rates for doctors.

In Perry’s State of the State address today, he said that "across Texas, patients are seeing their doctors hang up their white coats and stethoscopes because they are being forced out of practice." But data from the state medical board show otherwise.

"The Texas State Board of Medical Examiners has released official information that shows that the number of doctors in Texas has increased 18 percent since 1997," said Tom "Smitty" Smith, director of Public Citizen’s Texas office.

In a report on the Texas malpractice situation released this week, Public Citizen documented that investment losses by insurance companies, not malpractice payouts, are the real cause of the short-term spike in malpractice rates charged by insurers. Studies show that malpractice insurance rates track the ups and downs of the economy, and even insurers seeking caps on damages have acknowledged that caps will not result in lower premiums for doctors. Click here to view the report.

In Texas, as elsewhere, there has been no explosion in malpractice claims. In fact, the number of claims in Texas has fallen for the past two years. While the cost of medical errors to Texas families and communities is estimated at $1.3 billion to $2.2 billion per year, Texas doctors pay only $421 million per year in malpractice premiums.

"Gov. Perry has the wrong diagnosis and the wrong prescription for solving the problem of spiking malpractice premiums, which are caused by the economic cycle, not patient lawsuits," said Sidney Wolfe, M.D., director of Public Citizen’s Health Research Group.

The Public Citizen report, which called for stricter doctor discipline by the Texas State Board of Medical Examiners, showed that a small percentage of "repeat offender" doctors, cause the bulk of the malpractice problem.

According to data from the federal government’s National Practitioner Data Bank, 6.5 percent of Texas doctors have had two or more malpractice payouts, accounting for 51 percent of all payments and more than $1 billion in damages since 1990. Just 2.2 percent of Texas doctors, each of whom has paid three or more claims, are responsible for 25 percent of all payments.

Yet these doctors face little likelihood of suspension or loss of license. The medical board has disciplined only 15.5 percent of Texas doctors who have made four or more malpractice payments. Only 25 percent of doctors with six or more payments have been disciplined.

"Doctors and insurers should put on their stethoscopes on and stop complaining about lawsuits by injured patients when that has nothing to do with their insurance rates," Smith said. "The simple fact is that this campaign by doctors and the big insurance companies is based on a big lie. A $250,000 cap on non-economic damages will discriminate against the poor, the elderly and women who work in the home, but will have no effect on malpractice premiums. Meanwhile, the CEO of the nation’s largest malpractice insurer earns $250,000 in just 10 days. Is that fair?"

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