Liability Study Criticized

Published May 1, 2005

The American Medical Association (AMA) and other physician groups are criticizing a recent study by four law professors who concluded there never was a liability crisis in Texas–that rising insurance premiums over the past several years had not been caused by rising claims or payouts.

The March 2005 study, “Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002,” looked at closed claims in the state between 1988 and 2002 and found that when controlling for population growth and inflation, large claims (described as payouts of at least $25,000 in 1988 dollars) were stable in number, while the number of smaller paid claims declined. Total costs per large paid claim, defined as payouts plus defense costs, rose an average of 1 percent each year in constant dollars, the study reported.

In a statement, Donald J. Palmisano, M.D., J.D., immediate past president and member of the executive committee of the American Medical Association, pointed to several nationwide studies contradicting the professors’ findings, including a 2003 U.S. General Accounting Office report noting that since 1999, medical liability premiums rose dramatically in some states and for some specific specialties, with increases in payouts being the primary culprit for the increase.

Palmisano also noted the Texas study reviewed only closed claims. Open claims can take several years to work their way through the system, he said.

Bernard Black, a professor of law and finance at the University of Texas and one of the authors of the study, acknowledged Palmisano’s point but said the data from 1999 and prior years did not show any evidence of increasing payouts.

Bohn D. Allen, M.D., president of the Texas Medical Association, said the access-to-care problems experienced by some patients in Texas were clear evidence of a crisis in that state.

— Michael Norbut

For more information …

The March 2005 report by Bernard Black, Charles Silver, David Hyman, and William Sage, “Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002,” is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to, click on the PolicyBot™ button, and search for document #16835.