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By Bernard Black, Charles Silver, David Hyman and William Sage Medical malpractice litigation reform is a high priority for President Bush, who contends that juries are running amok, multimillion-dollar settlements are on the rise and greedy trial lawyers are filing frivolous suits. The results, Mr. Bush and others argue, include skyrocketing insurance prices, abandoned medical practices, defensive medicine and a crisis of access to care. Their proposed solution: caps on jury awards to patients and on lawyers' contingent fees. No one disputes that insurance premiums have risen significantly. The question is whether a crisis in states' tort systems accounts for the increase. Consider Mr. Bush's home state of Texas, America's second most populous state and the third largest in terms of total health care spending. After studying a database maintained by the Texas Department of Insurance that contains all insured malpractice claims resolved between 1988 and 2002, we saw no evidence of a tort crisis. Adjusting for inflation and rising population, we arrived at the following findings: Large claims (with payouts of at least $25,000 in 1988 dollars) were roughly constant in frequency. The percentage of claims with payments of more than $1 million remained steady at about 6 percent of all large claims. The number of total paid claims per 100 practicing physicians per year fell to fewer than five in 2002 from greater than six in 1990-92. Mean and median payouts per large paid claim were roughly constant. Jury verdicts in favor of plaintiffs showed no trend over time.
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