“Why Doctors Are Heading for Texas”

by Ted Frank on May 17, 2008

Tort reform, of course, resulting in substantially lower medical malpractice premiums and expenses, and an influx of 7000 doctors, including into many underserved regions. One indirect benefit: with less money spent on medical malpractice lawyers, self-insuring hospitals can spend more on doctors and on medical practice:

Take Christus Health, a nonprofit Catholic health system across the state. Thanks to tort reform, over the past four years Christus saved $100 million that it otherwise would have spent fending off bogus lawsuits or paying higher insurance premiums. Every dollar saved was reinvested in helping poor patients.

Also of relevance: the amusing results when Texas added evidentiary standards of medical harm to their asbestos and silicosis docket. Suddenly, over 99% of the cases went away because so few suing plaintiffs had a doctor willing to certify harm. (Joseph Nixon, WSJ, May 17). Related: POL Nov. 6, 2006 and POL Nov. 7, 2006, where I debate Texas law professor Charles Silver on these issues. Suffice it to say that the last year and a half has provided more support for my position than his.

Update: more data at Texas Medical Association website.

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1 Bob 05.17.08 at 12:28 pm

One selling point for reform to the public was that high litigation costs were passed on to the consumer who then paid more for services. Rather than lowering the cost for all consumers, this hospital chose to pass on the benefits to a few.

(I recognize that I sound like Scrooge saying that)

2 Eric Turkewitz 05.17.08 at 5:20 pm

Given that the Texas population is growing at twice the national rate, I would assume there would be an increase of doctors, tort “reform” or not.

http://quickfacts.census.gov/qfd/states/48000.html

I would also assume that giving governmental protections and immunities to any business would increase that industry. But that begs the question of whether shifting the burden of loss from the tortfeasor to the victim is a good thing.

3 Ross 05.17.08 at 9:15 pm

Disclosure: I am a trial lawyer. A Republican trial lawyer, but a trial lawyer none the less.

I read the article thoroughly and was dumbstruck by its’ conclusion that doctors are coming to Texas due to tort reform’s protections and reduced insurance rates while trial lawyers who used to sue doctors in Texas are leaving for California (where supposedly it is much easier because tort reform for med mal lawsuits does not exist there or is not as protective).

Question: Why does tort reform measures supposedly benefit doctors in Texas after the legislature implemented their tort reform measures, while California –which implemented a more restrictive set of tort reform measures in 1975 when it enacted MICRA–has not?

In fact, if one looks at the historical record in California, by 1980 medical insurance premiums increased 400% in California.

4 richlb 05.18.08 at 7:53 am

Increased help for the poor inevitably does benefit all consumers. And the article doesn’t point out that the decrease in insurance premiums, while not “lowering” medical costs, might have prevented their further escalation. In addition an increase in the number of doctors in the state is certain to increase the state’s income tax receipts. What they plan to do with that surplus isn’t discussed.

I don’t think proponents of tort reform promised a rebate check to all consumers should their policies be enacted – decreased costs for consumers are realized through other more indirect avenues.

And, incidentally, you do sound like a Scrooge.

5 throckmorton 05.18.08 at 12:07 pm

Don’t just look at Texas, but consider Mississippi as well. Mississpippi is being able to retain more of the physicians that are trained in the state and is now starting to catch up. This is in part due to a dedicated attempt by the University of Mississippi’s Medical Center which is expanding after basically being left for dead after numerous suits. This center is a major provider of care for the indigent.

As to Ross’s comment, it is all economics. Medicine and Law are businesses. You locate where business is good. For physicians Texas is good. I would suggest that there is a new feeding trough in California that is not related to medicine.

One of the big drawbacks to Texas’s tort reform is that other states had the advantage of having many new doctors from Texas. Texas has many physician training programs and those that graduated went to other states in droves and filled vital vacancies. Now many are going back, and those trained there are staying. Te physcian supply to the other states is drying up, huge shortfalls are occurring. These are mostly in primary care where total re-embusrsement is low and with the 10% Medicare cut in July may price them out of business. (Almost all physican payment is tied to the Medicare rate which is due to decrease by 10% in July and another 5% in Jan). It is hard to stay in business when you gross receipts decrease by 15%, your operating expenses increase by 7%/yr (employee costs and overhead) and medmal insurance already costs more that one months receipts.

6 William Nuesslein 05.19.08 at 7:55 am

Mr. Turkewitz,

Doctors are tortfeasors in the tautological sense of being involved in litigation. Tort reform is concerned in part with the lack of scientific validity of the outcomes of the litigation and at the disproportion of the awards when punitive damages are added to the make-whole award.

Payments for adverse outcomes should be funded in advance by patients buying adverse outcome insurance. Then premiums would be based on well defined schedules of payments. Obviously, if possible, one would buy a million dollar life insurance policy on Uncle George at his funeral. Setting an award after an event is an insurance no-no.

7 Ted Frank 05.19.08 at 8:01 am

Eric Turkewitz ignores that Texas’s population was increasing at twice the national rate before tort reform without the same increase in doctors, and that the increase in doctors is faster than the increase in population.

8 Brooks Schuelke 05.19.08 at 4:05 pm

First, consider that the author of the editorial is the former state representative primarily responsible for passing our tort reform bills.

Next, look at the stats. The only data he cites is the one number quoted by Ted. And frankly, most I know take those numbers with a grain of salt. When touting the benefit of reform, Christus is always the example given, and they certainly have not opened their books to prove the accuracy. Why not present any argument based on any of the other large chains in the state?

Next, to address Ted’s response to Turkewitz, I know that Ted is knowledgeable enough to know that it’s not as simple as saying there are more doctors now. You can certainly manipulate the stats, but the number of docs per capita has been trending upward well before the 2003 tort-reform legislation was passed at approximately the same rate it’s going up now.

Finally, two other stories to consider (and I apologize in advance for the long links):

Last week the D/FW Fox Affiliate ran its own story looking at the need and effectiveness of the med mal reforms. Unlike Nixon’s article that’s all rhetoric and no data, it actually cites some data in support of its conclusions. It’s available here: http://www.myfoxdfw.com/myfox/pages/Home/Detail;jsessionid=9FDF916BD433B871BDFDC87132D64F84?contentId=6552986&version=7&locale=EN-US&layoutCode=TSTY&pageId=1.1.1&sflg=1

And the Texas Observer has recently run a story finding that most of the state’s new doctors are practicing in urban areas where there never was a doctor shortage (I apologize if that story has been discussed on this site): http://www.texasobserver.org/article.php?aid=2607

For the most part, a good thread of comments (though, to comment #4, we don’t have a state income tax).

9 Ted Frank 05.19.08 at 4:23 pm

Plaintiffs attorney Brooks Schuelke writes: the number of docs per capita has been trending upward well before the 2003 tort-reform legislation was passed at approximately the same rate it’s going up now.

This is simply not true.

Texas had a net loss of obstetricians in 2001-2003, and has gained 186 obstetricians since then. Texas had a net loss of orthopedic surgeons in 2000-2003, and has gained 156 since then. The statewide total of pediatric intensive care, pediatric emergency medicine and pediatric infectious disease specialists will double this year since pre-reform; the population hasn’t doubled.

In 2003, Texas was 48th in doctors per capita. That’s now up to 42nd.

Texas licensed a record number of new doctors in 2007.

# The physician growth rate in El Paso is 76 percent greater than pre-reform.
# The physician growth rate in San Antonio is 55 percent greater than pre-reform.
# The physician growth rate in Houston is 36 percent greater than pre-reform.
# Jefferson, Nueces and Victoria counties saw a net loss of physicians in the eighteen months prior to tort reform. They’re now gaining doctors again.

More data at the Texas Medical Association site.

10 Brooks Schuelke 05.20.08 at 10:43 am

Ted

Since you’re not in Texas, I’ll give you the benefit of the doubt and assume that you don’t know that the Texas Medical Assoc, from whom you pull your stats, is the doctors’ lobbying group, and one of the primary backers of tort reform. Their pulling of statistics is very selective.

The Texas Medical Board is the licensing agency for the state. They keep detailed records of the number of docs in Texas and the number of doctors and specialists in each county.

The issue is not number of docs. We have plenty of physicians in the metropolitan areas (and even a glut if you listen to my doctor friends). The issue is getting doctors to rural areas. If you go through the TMB reports you can selectively pull the data to support whatever conclusion you want. The Texas Observer article (admittedly using their own selections) notes that as of Sept 2007, the number of counties without an OB remains unchanged after tort reform and the number of counties without a physician at all actually increased from 20 to 21.

There may be random gains here and random losses there, but overall, you will find that the new doctors aren’t getting to where they need new docs (and I think even the stats you cited above about Houston, San Antonio, and El Paso support that).

You also can’t look at tort reform in a vacuum. Texas has also adopted incentives (ironically funded by the state’s tobacco money) to encourage doctors to go to the underserved areas. We have also had a population explosion in many major metropolitan areas of the state.

Unfortunately, there is not a good solution for getting docs to underserved areas. Texas is just a huge state with very large, sparsely populated areas. I can drive south from San Antonio on IH 35 for four plus hours before coming to Laredo, the next town of any significance. And in West Texas or the Panhandle, you can drive further than that. There simply isn’t a population base in most Texas counties to support more than one or two GPs and certainly not any specialists.

And finally, I have my own criticisms about the data pulled by the TMA. For example, they cite the increased number of OBs. The Texas Observer article looked at those numbers. 94 of those new OBs went to 5 wealthy counties. Around the rest of the state, some counties gained a few, some lost a few, and 2/3 remained the same. The article looked at the neurosurgeons and orthos (which you cited) and the same pattern exists. I also thought it was funny that they cited Corpus Christi and Beaumont as underserved areas. Corpus is the home to the Christus Spohn hospital chain cited by Joe Nixon, and Beaumont is, in essence, a wealthy suburb of Houston (ironically driven by oil and trial attorneys — several tobacco firms are based there).

My point of all this? Maybe you can marginally say that tort reform has led to some of the new doctors. But the one thing I think is clear is that there have not been huge increases that you can track to tort reform and certainly not huge increases to traditionally underserved areas. And given the substantial rights that Texas gave up in tort reform, I think we should expect huge benefits for all of us and not just the insurance companies.

11 Ted Frank 05.20.08 at 10:56 am

Schuelke, whose original contention was refuted, changes his story, acknowledging that tort reform increased the number of doctors, but now claiming that it didn’t really make a difference. I’m not going to chase the moving target.

As the Nixon article (and a recent McQuillan study) demonstrates, there have been billions of dollars of benefits to “all of us” from tort reform. Texas doctors are largely insured by mutual companies; thus, when “insurance companies” benefit, the proceeds go directly to the policy-holders. The only losers have been trial lawyers.

12 Brooks Schuelke 05.20.08 at 12:36 pm

That’s a completely false response Ted and completely distorts my comments and your responses.

Nothing in your stats refuted what I said. The TMB stats show that Texas had 50,549 docs as of 5/03 (the last count taken before the 9/03 effective date of tort reform) and 59,042 as of 3/08 (the last availabe). That’s a 16.8% growth rate, which is approximately in line with our population growth. The last census data (2000-2006) shows a 13% population growth. I don’t have time to look up any stats, but I can virtually guarantee that the growth in the last two years has outpaced those numbers with our booming economy here. That was one of my original premises and I stand by it. The fact that the TMA lobbyists can go pick and choose what specialties and counties they want to use to present the benefits of tort reform doesn’t refute the overall numbers.

Second, I put the Texas Observer article in my orignal comment with a synopsis saying that if there are new doctors (from tort reform or other sources) they’re not getting to the high need areas. And given that tort reform was sold to Texans on the basis that all of these rural areas didn’t have doctors, that’s relevant. Who cares if the D/FW metroplex or Austin or Houston have more doctors? We already have plenty.

I have tried to contribute to a civil discussion on this issue, and all I’m met with is distortions. I can have those type of discussions with the pro-tort reform crowd here in Texas. I thought this site was beyond that.

13 Lawyer 05.20.08 at 5:34 pm

“Nothing in [Ted Frank's] stats refuted what I said.”

Mr. Schuelke:

Previously, you had stated that “the number of docs per capita has been trending upward well before the 2003 tort-reform legislation was passed at approximately the same rate it’s going up now.”

It’s unclear what you mean when you say that doctor per capita growth was “trending upward” before reform at “the same rate it’s going up now.” Is it possible for a rate to trend upward while continuing at the same rate? Or perhaps to you mean to say that the *rate of change* of per capita doctors is accelerating? (I would love to see those statistics backing that up).

In any event, Mr. Frank responded:

“Texas had a net loss of obstetricians in 2001-2003, and has gained 186 obstetricians since then. Texas had a net loss of orthopedic surgeons in 2000-2003, and has gained 156 since then. The statewide total of pediatric intensive care, pediatric emergency medicine and pediatric infectious disease specialists will double this year since pre-reform; the population hasn’t doubled.”

Showing a loss of a segment of doctors pre-reform, and showing a net gain since then, refutes your claim that the “rate” of doctor growth was tending toward that direction on its on inertia. Thus, for you to claim you’re not “refuted” by this is…perplexing.

Further, showing that the number of doctors have grown 16% *since 2003* while the population has grown 13% *since 2003* is absolutely meaningless for your claim that the rate of doctor growth was growing *before reform* i.e., pre-2003. You’ve traded in your original position — that the number of doctors was growing anyways and reform had nothing to do with it — to the new position that it’s population that has caused the admittedly high doctor growth in recent times.

And you’ve sprinkled in an argument that, even if reform has contributed to doctor-growth, it’s not where the doctors are needed most. The corollary to this argument is that if we can’t get doctors to the rural areas, then having more doctors is useless. Many call this “the perfect being the enemy of the good.”

In sum, this is why Mr. Frank referred to you as a “moving target.” If you think you’re being “met with distortions” then it’s most likely because you can’t decide what you’re trying to say.

14 Charles Silver 12.29.08 at 11:55 am

Ted contends that “the last year and a half” that has elapsed since we “debated” the post-2003 supply of physicians in Texas “has provided more support for [his]position than [mine].” I long ago despaired of responding to all of Ted’s contentions–he generates them too quickly for me to keep up–but my research group’s recent empirical work shows that the supply of doctors in Texas grew more SLOWLY after 2003 than before. If Texas had merely continued the rate of growth pre-2003, it would have have over 1600 more direct patient care physicians in 2007 than it actually did. For details, see the article beginning on p. 25 here: http://www.litigationsection.com/downloads/44_AfterHB4_Fall08.pdf.

15 Ted Frank 12.29.08 at 1:34 pm

A couple of quick responses:

1) Silver’s data in the main trendline aggregates all doctors; when one breaks out the high-litigation-risk categories, as I did above, the post-2003 and pre-2003 comparisons are considerably more dramatic, though Silver is correct that there may be confounding factors other than tort reform that explain the change in trends.

2) It would be extraordinarily surprising if small changes in Texas GDP had a larger impact on doctor location decisions than large changes in medical malpractice insurance expenses, but that is what Silver’s model is effectively asking us to believe.

16 Charles Silver 01.01.09 at 4:57 pm

Our finding that changes in GDP and other factors affect physician supply more than changes in med mal premiums would be “extraordinarily surprising” only if compelling evidence showed that med mal premiums matter more. In fact, the evidence that med mal premiums significantly influence physicians’ location decisions is weak. Even physicians in high-risk practice areas, like obgyns, seem to be motivated more strongly by other factors. Using state-year-level data from all 50 states and the District of Columbia, researchers associated with the Harvard School of Public Health “found that the supply of OB/GYNs had no statistically significant association with premiums or tort reforms. [Their] results suggest that most OB/GYNs do not respond to liability risk by relocating out of state or discontinuing their practice, and that tort reforms such as caps on noneconomic damages do not help states attract and retain high-risk specialists.” Yang, Y. Tony, David M. Studdert, S. V. Subramanian & Michelle M. Mello, A Longitudinal Analysis of the Impact of Liability Pressure on the Supply of Obstetrician-Gynecologists, 5 Journal of Empirical Legal Studies 21–53 (2008). Yang et al. also observe that prior studies of the impact of tort reforms and premiums on physician supply “produced mixed results and [were] vulnerable to various methodological criticisms.” In other words, there wasn’t a whole lot of evidence for Ted’s proposition before. The best study I know of finding an affect is D. A. Matsa, Does Malpractice Liability Keep the Doctor Away? Evidence from Tort Reform Damage Caps (Northwestern University Working Paper, 2006), available at http:// papers.ssrn.com/sol3/papers.cfm?abstract_id=920846. If I recall correctly, Matsa finds an effect in rural counties where demand for health care is highly sensitive to price.

Can someone tell me why only the left of half the comments on this page appears on my screen?

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