Sally C. Pipes: Texas-style health care reform is bigger and better

President Obama’s campaign for healthcare reform has run into an unexpected roadblock — other Democrats. And, Senate Majority Leader Harry Reid, D-NV, said yesterday that the Senate would not be voting on a bill prior to the August recess.

The president wanted to get a bill passed before the recess because he did not want Members of Congress going back to their states and districts and being beaten up on the high cost of health care reform, increased taxes on all Americans, and a reduction in the quality of the care they now have.

The Blue Dog Coalition of moderate House Democrats recently sent a letter to its party leadership expressing concern about the cost of the bills under consideration. According to the Blue Dogs, “paying for health care reform must start with finding savings within the current delivery system.”

Our healthcare system is chock full of wasteful practices that would yield savings if curtailed. One such practice — the rash of frivolous medical malpractice litigation clogging our courts — increases health costs for patients, physicians, hospitals, and public programs alike.

Instituting commonsense medical malpractice reforms would improve care, cut costs, and make insurance more affordable without additional government spending. We need look no further than the states to see how such positive returns are possible.

Malpractice suits serve a valuable function by compensating wronged patients and punishing irresponsible doctors. But malpractice law is often abused, as trial lawyers inundate courts with baseless suits in hopes that one will yield a payday.

Lawsuits are an occupational hazard for doctors. Every year, one in eight physicians is sued for malpractice.

Excess litigation has fostered an epidemic of defensive medicine, wherein doctors order more procedures than they ordinarily would to protect themselves from lawsuits. Defensive medicine increases annual medical costs by 10 percent, or $214 billion.

About 83 percent of physicians practice defensive medicine, and over a quarter of tests, procedures, referrals, and consultations are ordered out of fear of lawsuits.

Further, malpractice abuse causes physicians to leave riskier medical fields like obstetrics, neurosurgery, and emergency medicine.

So how can malpractice reform improve health care? Consider what Texas has experienced since its leaders enacted an array of measures to limit wasteful malpractice spending in 2003. These included limits on non-economic damages, a higher burden of proof for claims of emergency room negligence, and a requirement that lawsuits be approved by an independent body of medical experts.

The reforms have resulted in drastically lower malpractice premiums. Many doctors had left Texas over the years or chose not to practice there because of the fear of an expensive lawsuit. Since the reforms were enacted, many new and former doctors who left the state have flooded into Texas, and patients have enjoyed increased access to care.

Medical licenses increased 18 percent over the past four years. Between 2003 and 2007, the Texas Medical Board licensed about 2,500 more new physicians than it did during the previous four years. In total, more than 7,000 new doctors have come to the state.

The physician population in Texas has grown twice as fast as the general population. And the state has jumped six places in the American Medical Association’s tally of doctors per capita.

One big medical malpractice insurer has dropped its premiums by 35 percent. That translates into $217 million in cost-savings for doctors. State-wide, medical malpractice premiums have decreased 21.3 percent.

Lower malpractice premiums lead to lower health costs. As the savings flow through the system, patients see their insurance premiums — and their out-of-pocket expenses — decline.

An increase in the number of doctors also translates into better care for patients. The influx of doctors has been crucial to improving health outcomes in rural areas that had historically suffered from a scarcity of physicians.

Instituting these reforms on a national scale would yield similar results.

In recent months, the President has voiced support for fixing malpractice law. He and his Democratic colleagues should make good on that promise and emulate Texas’s example to bring malpractice reform to the entire nation.

Examiner contributor Sally C. Pipes is president and CEO of the Pacific Research Institute and author of The Top Ten Myths of American Health Care.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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