Texas Ranks Sixth in 2010 US Medical Tort Index

For the past three years, the Pacific Research Institute has issued the U.S. Index of Health Ownership, which remains "the only effort to measure the degree to which individuals, whether patients, health professionals, entrepreneurs, or taxpayers, 'own' the health care in their states. It quantifies how state laws and regulations affect the liberty of citizens involved in state government health plans (primarily Medicaid), the private health insurance market, and the provision of medical services, as well as the effect of medical tort on people’s freedom to engage health services."

Although a new edition will not be published this year, the PRI has released new research updating one of the four categories of health ownership for 2010: medical tort. Texas remains one of the leaders of the pack, falling in at a promising number six slot in the medical tort index rankings.

This partial update calculates the medical-tort index from the average of eight important factors (from the PRI article):

• 1. The ratio of medical-malpractice insurance losses per projected personal health expenditures in 2008. The data come from A.M. Best Company and the Centers for Medicare and Medicaid Services.
• 2. Caps on non-economic-damage awards in medical-malpractice lawsuits. This tracks whether a state has limits on non-economic damages or has increased the negligence standard required for medical malpractice. For example, North Dakota has a $500,000 limit. McQuillan and Abramyan cite evidence that capping non-economic damages reduces defensive medicine.
• 3. Caps on punitive-damage awards in medical-malpractice lawsuits. For example, Washington does not allow punitive damages, and Alaska limits them to $500,000 or three times compensatory damages. McQuillan and Abramyan cite evidence that capping punitive damages lowers medical-malpractice premiums.
• 4. Attorney-fee limits for medical-malpractice cases. New York, for example, uses a sliding scale: Lawyers can take 30 percent of the first $250,000 of an award, 25 percent of the next $250,000, 20 percent for the next $500,000, 15 percent of the next $250,000, and 10 percent above $1.25 million. McQuillan and Abramyan cite evidence that such limits increase the supply of physicians in a state.
• 5. Pre-trial screening or arbitration in medical-malpractice cases. Pre-trial screenings determine the validity of a case, while arbitration is an alternative to trial. Nebraska, for example, mandates review of medical-malpractice claims by a panel before proceeding to trial. Oregon mandates dispute resolution within 270 days of filing an action, unless both parties waive mediation or arbitration. McQuillan and Abramyan cite evidence that these opportunities reduce the number of meritless cases.
• 6. Does the state allow a “Food and Drug Administration (FDA) defense” or a “Federal Trade Commission (FTC) defense”? These defenses allow some immunity if the FDA has approved the therapeutic product or the FTC has approved its advertising. For example, West Virginia holds that health providers are not liable for personal injuries caused by an FDA-approved drug. These rules reduce the burden of over-regulation which limits investment by pharmaceutical and medical-device makers.
• 7. Conditions on the use of expert witnesses in medical-malpractice lawsuits. For example, Minnesota requires that medical-malpractice claimants sign an affidavit if they have consulted with an “expert.” Michigan requires “experts” to be licensed and board-certified in the same specialty as the defendant, and that they be engaged in active practice or actually teaching medicine. These rules increase the likelihood of fair verdicts.
• 8. Statute of limitations on medical-malpractice cases. Kentucky, for example, sets its statute of limitations at one year from the alleged act or reasonable discovery, but no more than five years after the act. McQuillan and Abramyan cite evidence that such rules lower medical costs.

To view the full PRI article and .pdf file, follow this link: http://www.pacificresearch.org/publications/medical-tort-ranking-the-50-states

 

July 27, 2010

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