Foundation For NC Future

August 24, 2004, Tuesday , METRO

SECTION: BUSINESS; Pg. 1E

LENGTH: 709 words

HEADLINE: Hospitals, doctors see rates fall ; Perry touting success from caps on malpractice awards.

BYLINE: Travis E. Poling

BODY: A year after voters approved caps on medical malpractice lawsuits, Texas hospitals and doctors are beginning to see reduced insurance costs and fewer lawsuits.

Gov. Rick Perry, who pushed for reform through Proposition 12 last year, is taking that message on the road beginning today. He will stop in San Antonio on Thursday.

The Texas Hospital Association said malpractice insurance rates for hospitals fell about 8 percent for this year and 17 percent for next year.

A Texas Medical Association survey said that although some specialists are still cutting back on the services they offer because of high liability insurance rates, others are reintroducing services they once performed, because their rates came down.

All San Antonio hospitals have seen significant reductions on liability insurance costs now that insurers' costs of defending hospitals against lawsuits have been capped, said Trip Pilgrim, chairman of the Greater San Antonio Hospital Council and vice president of Baptist Health System.

"It's not a cure-all, but it is a huge deal," Pilgrim said.

Methodist Healthcare System said its insurance rates are down 20 percent. And Christus Santa Rosa Healthcare parent Christus Health reports a savings of about $21 million this year at 48 Texas hospitals and clinics.

Perry spokeswoman Kathy Walt said hospitals are now investing in new technologies and building programs, and doctors aren't cutting back their scope of practice as they were when medical liability insurance rates increased sharply.

Increased competition also will play a role in keeping malpractice insurance rates down, Walt said. The Texas Department of Insurance has had 10 medical liability insurers apply to do business in Texas. Most had pulled out of the market before medical tort reform passed by only 28,000 votes in a statewide referendum of 1.46 million voters.

"Patients across the state have better access to health care services, and hospitals have more resources to invest in caring for their communities instead of defending themselves against frivolous lawsuits," said Richard Bettis, chief executive officer of the Texas Hospital Association.

The TMA survey found that the number of lawsuits against hospitals has dropped by 70 percent since the new law went into effect. It caps awards for intangible damages - such as loss of companionship, pain or mental anguish - at $250,000 per person.

Average yearly liability premium increases at Texas hospitals peaked at 54 percent last year, before the caps were put in place, according to the TMA survey. Only 19 percent of hospitals reported that premiums would go up next year. That compares with 45 percent that had increases this year.

Although relief for doctors has been slow to come in the form of lower premiums, the TMA survey of its membership found that fewer doctors are cutting services and that recruiting doctors to clinical practices in Texas has become easier under the new law.

In April 2003, more than half the doctors surveyed said they had stopped providing high-risk services to patients. In the survey this summer, only 13 percent said they were reducing services.

However, the survey found that neurosurgeons, obstetrician/gynecologists and orthopedic surgeons are still cutting back their services in significant numbers. Those groups were especially hard-hit by premium increases in recent years.

Guy Choate, president-elect of the Texas Trial Lawyers Association, called the cap on damages too low. Plaintiffs' lawyers typically pay for the cost of fighting a malpractice case themselves in the hope of recovering their expenses and a fee of one-third or more of the jury award. Large awards made it easier for lawyers to risk losing in other cases, he said.

Choate said the new law means lawyers can't make enough money from the lawsuits, and many people injured by doctors and hospitals won't be able to fight back unless they try to navigate the complicated legal system representing themselves.

He said trial lawyers will fight the tort laws again in the 2005 Legislative session.

"We will forever be trying to undo this mess," he said.

tpoling@express-news.net

GRAPHIC: PHOTO: MUG : Perry

LOAD-DATE: August 24, 2004