Study: Malpractice rates not tied to big awards; Professors say insurance crisis in Texas not from claims, but some doctors disagree
Houston Chronicle
March 31, 2005

Large damage awards for medical malpractice did not create the physicians' insurance crisis in Texas as commonly believed, according to research by professors at the University of Texas at Austin and two colleges outside the state.

UT law and finance professor Bernard Black and University of Illinois law professor David Hyman contended at a forum Thursday that, after adjusting for inflation, there has been no increase in Texas of payouts on large malpractice claims.

"The rapid changes in insurance premiums that sparked the crisis appear to (be) largely disconnected from claim outcomes," the researchers wrote.

The professors, who participated in a discussion Thursday at the American Enterprise Institute, examined insurance data from 1988 to 2002 provided by the Texas Department of Insurance.

Charles Silver of UT and William Sage of Columbia University co-authored the study.

The study conflicts with the theory that insurance rate increases in the late 1990s were prompted in large part by high civil jury awards and an increase in malpractice lawsuits.

In 2002, four carriers offered new medical malpractice insurance policies in Texas, compared with 17 in 1999, according to the Texas Department of Insurance.

Black said many insurance companies overreacted when they withdrew from the Texas market in the late 1990s. Insurance rates rose during that period, but many companies said they could not make a profit.

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