Tort Reform (part 3): Do Doctors Leave States With Unfriendly Medical Malpractice Environments?

In the article, "Why Doctors Are Heading for Texas," Wall Street Journal writer Joseph Nixon builds a strong anecdotal case that "Over the past three years, some 7,000 MDs have flooded into Texas" because of "tort reform." The argument is that in 2003 and 2005, Texas enacted a series of reforms of the state's civil justice system to make it harder for people to file a number of different forms of liability cases, including medical malpractice, but also product liability cases. The result, says Nixon, is that doctors and businesses are flocking to Texas, leading to a dramatic increase in the number of doctors and a huge growth in the economy. We have already talked about the fallacy of economic growth figures in this context, but what about the flight of doctors?

High Risk Exodus: Fact or Fiction?

It is a common refrain of those seeking tort reform that doctors, especially those in high-risk specialties such as obstetrics/gynecology (OB/GYNs), flee from states with legal climates that favor plaintiffs to those states with more protective legal systems. The argument is that medical malpractice insurance rates and the threat of frivolous lawsuits cause doctors to seek an environment that is more protective. We have already shown that medical malpractice insurance rates are not necessarily related to the legal climate where the doctors practice, and that insurance companies generally exact a high profit from doctors. But do doctors really go from states where they fear lawsuits to states where they feel protected.

No, or, at least not necessarily, according to the evidence. It's good to get away from anecdotal evidence and stick to the facts whenever possible, and a number of studies have been done on this question. First, consider the study by Harvard University's Department of Health Policy & Management, which considered the behavior of doctors during a period when medical malpractice insurance premiums increased by as much as 65 % a quarter. The conclusion of their study was that although most specialties saw 10-20 % of their ranks leave the state every year, there was no difference in the number of departures between high-risk specialists and low-risk specialists. In addition, their findings indicated that the overall per capita supply of physicians actually grew by 5.8 % in the period studied.

In a second study, specifically focused on OB/GYNs, commonly cited as being at risk due to the prevalence of obstetrical malpractice cases, authors from several universities determined that there was no statistically significant correlation between medical malpractice insurance rates and the number of doctors. Instead, they found that the highest degree of correlation was between the number of OB/GYNs and the per-capita income. In fact, per-capita income is more than 20-times stronger a correlation for OB/GYN frequency than insurance rates. Of the tort reforms, the only one which seemed to have a significant correlation was a cap on noneconomic damages less than $250,000, which was correlated at less than half the level of per capita income.

Where Are the Doctors Coming From?

Although doctors do not as a whole seem to leave states where the medical malpractice climate is unfriendly, there is no denying that Texas has seen a recent boom in its applications for medical licenses. According to Texas Board of Medicine statistics, physician applications for licenses were relatively stable in 2001-2004, but shot up by over 30 % from 2005-2007. Where did all these doctors come from? The majority of them are probably residents, who are moving from states such as Pennsylvania (with a purportedly unfriendly medical malpractice climate) to Texas. This is correlated by the fact that the number of resident physicians applying for licenses in Pennsylvania has decreased from 50.5 percent of residents who train in the state in 1994 to just 7.8 % in 2004.

So, wow, it does seem like doctors really are fleeing states like Pennsylvania to go to Texas because of the medical malpractice environment.

Or maybe something else is going on. Looking at data provided by the Texas Medical Association, Texas actually ranks 45th in the population of doctors per capita, with only 186 doctors per 100,000. In other words, Texas has almost no doctors for its population. On the other hand, Pennsylvania has 255 doctors per 100,000 people. Although the medical malpractice environment may have provided an additional incentive for physician residents to set up their practice in otherwise undesirable and underserved rural communities in Texas, it does not seem to have affected the supply of doctors in Pennsylvania, which has actually grown by 33 % over the past three years.

Quality of Care?

Now, if I may be allowed to share a little anecdotal evidence of my own, let's consider the case of Dr. Jayant Patel, who began his career as a resident in upstate New York, where he sometimes failed to examine patients before operating on them, which the Commissioner of Health considered a "serious failure" and evidence of "his moral unfitness to practice medicine." Then the doctor moved to Portland, where his practice was increasingly restricted as a result of complaints and lawsuits against him. He was cited for "gross or repeated acts of negligence," and eventually left the state to work in Australia, where he may have killed as many as 87 people as a result of his poor practices.

Anecdotally, it sure seems like this is the kind of doctor who would be happy to practice in a state where he would be protected from lawsuits.

Now, let's consider some crucial facts. According to a 2003 report by the citizen's group Public Citizen, only 4.7 percent of Pennsylvania doctors, all of whom had 3 or more payouts per year for medical malpractice, were responsible for 51.4 percent of all payments, and barely 10.6 percent of doctors were responsible for 84 percent of payments. In other words, the vast majority of medical malpractice payouts are made by a small number of doctors, who are most likely responsible for the majority of errors. It is likely that these are also the doctors who would be seeking a favorable legal environment for protection against medical malpractice claims.

Coincidentally, during the period when physician applications have skyrocketed, so have complaints and investigations against doctors. From 2001-2007, the number of complaints received against doctors increased by almost 50%. In addition, disciplinary actions by the medical board have tripled, and temporary suspensions of physicians by the board have doubled. The percent of these cases related to quality of care has also risen from 55 to 68. In other words, if tort reform is bringing doctors to the state of Texas, maybe they're not the kind of doctors you want to have.

Legal Recourse

Currently, medical malpractice insurance hurts doctors fairly equally, so that even the best doctors are harmed by the behavior of a small number of poor ones, so if tort reform can lower medical malpractice rates, it can help doctors. But is it worth sacrificing quality of care? Or is there some way to restructure the medical system so that it is not so expensive to doctors, does not merely profit insurance companies, and yet addresses the concerns of patients injured by doctors' mistakes? We will consider just such an option in Part 4.

On the other hand, if only a few doctors are responsible for the majority of medical errors, the entire profession can be improved and the health of the population can be protected if those doctors can be exposed and encouraged to leave the profession. Currently, the best option for patients to address the poor quality of care they have received is through the legal system.