The Texas Unmiracle: Malpractice Reform Edition

Rick Perry doesn’t have much of a health care record to run on. A quarter of Texans are uninsured, the highest in the country, Texas has the narrowest Medicaid eligibility standards, and spends the least of any state on mental health and the second to least on health care for the poor. Perry’s sole accomplishment seems to be the 2003 overhaul of the state’s malpractice system, which the newly-minted candidate promoted during a stop in New Hampshire on Sunday:

The two top issues in the election, he told voters, are jobs and debt, which Romney, too, hammers on the campaign trail. But while Romney tells voters repeatedly how much he knows about the economy from working 25 years in the private sector (and spends little time talking about his record as governor of Massachusetts), Perry weaved together his vision for the nation’s economy by tying it to his accomplishments in Texas.

“We’ve had the most sweeping tort reform in the nation,” he said, asserting that as a result of the law passed in 2003, there are 20,000 more physicians in Texas. He spoke of cutting taxes and sparking the best job growth of any state in the nation.

And instead of blasting President Obama in the ways his competitors have, Perry chose his words carefully, explaining that he’s not angry but indignant about the federal government.

It’s hard to know if malpractice is to credit for the additional physicians, but it’s certainly not responsible for lowering the state’s health care costs and that serves as an uncomfortable case study for how the GOP’s favorite reform prescription — tort reform! — falls short of expectations.

When Texas capped non economic medical malpractice damages to $250,000 in 2003, most conservatives argued that the reform would free doctors from having to prescribe unnecessary treatment to avoid lawsuits. It didn’t work out that way. According to the Dartmouth research on disparities in health care spending, many Texan doctors are still prescribing aggressive treatments that don’t improve outcomes. In fact, as you can see from the chart below, Texas’ Medicare spending “seems to have gone up faster than the nation’s since 2003“:

The truth of the matter is, despite conservative claims to the contrary, malpractice costs make up only a very small percentage of health care spending. And most health experts believe that while fear of lawsuits may certainly be motivating doctors to practice defensive medicine (over prescribe unnecessary treatments and procedures) the nation’s fee-for-service reimbursement system bares more of the blame. Texas’ experience seems to validate that theory.