Thursday, August 18, 2011

Malpractice Reform in Texas and Results

link here to article

I recently posted an article that was critical of the claims made by the Texas Governor Rick Perry about the benefits from the tort reform bill that he passed in 2003. This article provides data that rebuts his claims. His bill caps the payment for pain and suffering at $250,000. It does not limit awards for lost income. It has reduced suits from claims based primarily on pain and suffering. It has not affected claims for those with high incomes that sue for lost income. The bill has reduced malpractice claims and the cost of malpractice insurance in Texas. The question is whether it has improved healthcare in Texas relative to the rest of the country. The data reported here do not support Perry's claims.

Tort reform in Texas raises another question that needs to be considered. Suppose that physicians did migrate to Texas in order to lower their cost of insurance. Is that good or bad? Physicians who have lost suits and who have been hit with higher premiums would have the most incentive to relocate to Texas. Is that good or bad for Texas? The state is also a "right to work" state. That is, it makes it more difficult to unionize in Texas. Is that good or bad for wages and working conditions in Texas? More generally, is it good or bad for America to have states competing with each other for jobs and physicians by offering less regulation, lower taxes for business, protection from unionization etc. etc.? Do we want see a race to the bottom between states, that is based upon providing incentives to business that have a negative impact on wage earners?

The GOP has other reasons for being in favor of tort reform. It is part of its campaign under Tom Delay to defund the Democratic Party. Lawyers have been major contributors to Democratic campaigns. The defunding program, initiated by Tom Delay, targeted groups that tended to fund democrats running for political office. Threats from lawsuits is also another form of business regulation. Businesses are more mindful of doing things that may result in legal claims. GE, for example stopped polluting the Hudson River after it was hit with law suits.

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