Paper finds Texas tort reform didn't draw more doctors to state

Black/Hyman/Silver have a new draft paper, "Does Tort Reform Affect Physician Supply? Evidence from Texas," (via Robinette) that substantially undermines the empirical case for the conventional wisdom that Texas's 2003 reforms against medical malpractice lawsuits attracted more doctors to Texas. The result is highly counterintuitive: after all, even the authors acknowledge that the reforms dramatically decreased malpractice expenses for doctors. Are we to conclude that doctors do not respond to economic incentives?
Alas, the authors do not suggest any explanation for the phenomenon they describe. Possibilities:

• The supply of doctors is inelastic relative to after-expense income. This is a testable hypothesis, and would have dramatic implications for "bending the cost curve" of health-care expenditures if true.
• Employers of doctors offset the decrease in medical-malpractice expenditures by decreasing wages paid to doctors. This seems somewhat implausible, as many doctors are independent, and the ones that aren't probably aren't paying for their own malpractice insurance. But it is also a testable hypothesis. Too, if the health-care market in Texas responded to such a wage decrease by reducing costs to patients (or, at least, reducing costs to patients relative to the nationwide trend of rising costs to patients), that is also worth studying, and would be a benefit that may refute the overstated conclusion of the authors that "tort reform is a small idea, when it comes to the larger and linked questions of health care access and affordability."
• The quantity of doctors did not increase, but the doctors responded to the incentives by changing the mix and quality of services provided in any given year: more OB/GYNs willing to deliver babies rather than restricting themselves to less risky work; more doctors willing to work in emergency rooms; doctors spending more time seeing patients and less time in medical-malpractice-related activities like defending themselves in lawsuits, cover-your-ass documentation, and (for better or worse) defensive medicine. If the average practicing doctor is spending more hours with patients post-tort-reform than pre-tort-reform, doctor supply is increasing, even if the raw numbers aren't. I am not aware of any evidence for this, but economic theory would predict this result. It's not clear whether the data exists to test this hypothesis, but as in the parable of the drunk looking for his lost keys under the streetlamp, one should avoid drawing conclusions that contradict economic theory just because it is too difficult to test an alternative hypothesis consistent with economic theory. Too, if defensive medicine practices changed, as one predicts they would, have health outcomes changed for better or worse? (Professor Silver has argued elsewhere his concern that Texas doctors would take less care post-reform.) Again, this is difficult to test, especially since the adverse consequences of many defensive-medicine decisions, such as excessive CAT scans, won't be known until the additional cancers show up decades later. But it is both a potential benefit and a potential cost of tort reform, as we don't know to what extent doctors are properly weighing benefits and costs (including opportunity costs of more intensive treatment of a particular patient) at the margin. Kessler's study, backed to a lesser extent by the CBO, certainly suggests defensive medicine is wasted money at the margin in the state of the world without damages caps, but defensive medicine is surely different today than in the 1980s.
• For many doctors with low-risk practices, malpractice liability is not a large factor in their practice decision. But the malpractice liability crisis most heavily hit high-risk practices, like neurosurgery or OB/GYN or emergency-room care. Did Texas tort reform materially affect the supply of doctors in high-risk specialties, while the effect on low-risk specialties was overwhelmed by noise? This should be a testable hypothesis, but the data is poor because of a change in the way statistics were collected. The authors try to get around this by comparing 1997-2000 growth to 2008-2010 growth, but there's not necessarily a reason that one would predict a post-tort reform world to have a different post-equilibrium effect than a pre-tort reform world. One cannot rule out the hypothesis that doctors overreacted to the new incentive when tort reform was first imposed and that depressed new demand in later years. Of course, one cannot rule out the null hypothesis that a dramatic decrease in malpractice-insurance rates caused by tort reform did not increase the supply of high-risk doctors, though, again, one wishes for an alternative explanation for why doctors are not responding to economic incentives. (Note, too, that the authors' decision of excluding 2001-07 from the data has dramatic effects on the data. It's unclear to me why a reporting change in 2001 that would artificially increase the 2001-02 numbers relative to the 1999-2000 numbers should have an effect on the 2003-07 numbers, especially given the 2000-2003 declines that are being excluded.)

Can anyone think of other alternative hypotheses in the comments?
I remain skeptical that a wealth transfer from lawyers to doctors and patients didn't have positive externalities, but I, for one, am going to stop claiming that Texas tort reform increased doctor supply without better data demonstrating that. More study is needed to explain Black/Hyman/Silver's counterintuitive result, and partisans on both sides need to be more conservative with their policy claims. Earlier.


[source: Point-of-Law, Frank]

Editor says tort-reform law hasn't benefitted Texas

(commentary by Tony Floyd, Managing Editor of Henderson Daily News)

Texas may not have been the first state to welcome tort reforms but I can’t imagine anyone embracing it with such wild enthusiasm as Texans over the past 20 years or so.

It was never hard to sell to the public because of all the promises of savings on insurance premiums touted by tort reform proponents, proving once again that everyone votes in their own self-interest when they pull the voting booth curtain.

During his failed presidential bid, Texas Gov. Rick Perry perpetuated the myth that implementing Texas-style tort reforms would go a long way toward curing what’s wrong with the healthcare system. Perry was polling at 1 percent going into the South Carolina primary.

He recommended that all states to do as Texas did in 2003 when lawmakers enacted legislation aimed at limiting the amount of money juries can award patients who win malpractice lawsuits against doctors and hospitals. The law capped non-economic (pain and suffering) damages at $250,000 in lawsuits against doctors and $750,000 against hospitals. Voters overwhelmingly approved a like-minded constitutional amendment later the same year.

Texans for Lawsuit Reform (TLR), whose political action committee has become a dominant financial engine for legislative races, has been at the forefront of tort reform efforts.

Its money tended to push out Democrats who, when considering civil justice issues, were more likely to side with the state’s trial lawyers.

Plus, tort reform’s battlefields have changed over the years, from trucking deregulation to workers’ compensation insurance reform, through the political campaigns that swung the Texas Supreme Court from a nine-member Democratic panel beholden to plaintiffs to a nine-member Republican panel beholden to TLR and like-minded people and business groups.

In the mid-1990s, TLR became a powerhouse, overshadowing older business groups and interests. When George W. Bush ran for governor in 1994, one of the four planks in his platform was tort reform. After he took office in 1995, he and the Legislature rewrote some of the state’s basic civil laws, changing the economics of suing for civil damages in Texas and putting serious hurt on trial lawyers.

According to media critic and news analyst Wendell Potter’s website, as a result of the 2003 tort reform law, malpractice liability insurers reduced their rates in Texas and, tort reform proponents say, the number of doctors applying to practice medicine in the state “skyrocketed.”

Reform proponents contend that in the first five years after tort reform was enacted, 14,498 doctors either returned to practice in Texas or began practicing here for the first time.

That’s impressive until one notes how Texas stacks up with the rest of the country in terms of physician growth in direct patient care. It appears that tort reform has not given Texas an advantage in competiting with other states for doctors, Potter wrote in his piece “The Myth of Tort Reform Benefits in Texas” on the website.

In 2008, the number of physicians in patient care per 10,000 civilian population in the United States was 25.7. At just 20.2 doctors per 10,000 people, Texas ranked near the bottom of the 50 states.

In fact, only nine states did worse. In 2000, three years before tort reform, Texas was still bringing up the rear, but not quite as badly. Back then, 11 states did worse.

It is true that medical malpractice insurance rates dropped in Texas after tort reform was enacted, but Texans would be hard pressed to claim any direct benefit — except, that is, for Texans who are doctors. Medical liability premiums have declined by nearly 30 percent since tort reforms were enacted.

A study published in The Dallas Morning News showed the average malpractice rate charged ob/gyns in Texas by the state’s largest domestic insurer of physicians fell from $53,752 in 2003 to $33,881 in 2011. Drops of similar percentages were found for doctors in family practice and general surgery.

Advocates of tort reform have long claimed that one of the reasons for escalating health care costs is that doctors over-treat and prescribe more medications and diagnostic tests than necessary out of fear of being sued. If Texans believed their own health insurance rates would go down once tort reform made these practices less prevalent, they have by now abandoned that notion, Potter wrote.

Truth is, chances of a Texas family saving a few bucks on premiums would be greater if they moved to another state.

According to Potter’s website, the average premium for family coverage in Texas was $14,526 in 2010. That’s $655 higher than the U.S. average. Those numbers indicate that doctors have not passed on their own insurance savings to patients and they are not practicing medicine any differently than before tort reform was enacted.

Not only are Texans paying more for their own insurance while doctors are paying less for theirs, their chances of getting employer-subsidized coverage is less than it would be if they lived elsewhere in the U.S.

Other new studies have found that a smaller percentage of employers in Texas offered coverage to their workers last year than in the U.S. as a whole (51 percent and 53.8 percent, respectively).

And the Texans who do have coverage through the workplace are contributing far more out of their own pockets for that coverage than people who live in most other states. In Texas last year, the average employee contribution toward company-sponsored coverage was $4,500. The U.S. average was $3,721.

Tort reforms that limit the amount that can be awarded for such noneconomic damages, as well as those that decrease awards by the amount of payments from third-party sources, aim to make it less worthwhile to pursue marginal cases, thereby reducing the number of such cases and inefficiencies in the tort system.

Other tort reforms seek to limit liability by making it more difficult to pursue cases against multiple defendants. Still other reforms focus on procedural changes, again making it less likely that marginal cases will be pursued.

In some cases, tort reforms have had the desired impact on Texas’ litigious business climate. As for when savings on insurance premiums will finally trickle down to the average working family, we could be in for a long, long wait.

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source: Henderson Daily News (Floyd, 1/23)

Dallas Court of Appeals: Torts: Jensen v. Southwest Rodeo L.P.

Tx. App. Dist. 5
Joseph B. Morris Justice
05-10-00596-CV
09-29-2011


OPINION

Before Justices Morris, FitzGerald, and Francis

Opinion By Justice Morris


In this premises liability case, appellant Bob Jensen challenges the trial court's summary judgment in favor of Southwest Rodeo, L.P. Jensen brings two issues contending the trial court erred in concluding he had no right to recover from Southwest Rodeo for his personal injuries. Because we conclude Southwest Rodeo owed no duty to Jensen, we affirm the trial court's judgment.

I.

Southwest Rodeo, L.P. owns an arena and events center located in Mesquite, Texas. On October 21, 2003, Bob Jensen, acting on behalf of the Hella Shrine Temple, signed a lease agreement with Southwest Rodeo to use the arena facilities for a Hella Shrine circus. During one of the circus performances, Jensen tripped and fell on the arena stairs. Jensen filed suit against Southwest Rodeo alleging claims for negligence and premises liability.

Southwest Rodeo filed a motion for summary judgment asserting three grounds to defeat Jensen's claims as a matter of law. First, Southwest Rodeo argued Jensen's claims must fail because Southwest Rodeo, as lessor, owed no duty to the Temple or the Temple's invitees for the conditions of the leased premises. In the alternative, Southwest Rodeo argued that Jensen's claims must fail because he was a licensee with knowledge of the alleged dangerous condition. Finally, Southwest Rodeo argued that Jensen could not recover under a separate negligence theory because his injury was alleged to be the result of a premises defect and not any contemporaneous negligent activity. Following a hearing on the motion, the trial court held that Southwest Rodeo owed no duty to Jensen and ordered that Jensen take nothing by his claims. Jensen brought this appeal. II.

In his first issue, Jensen contends the trial court erred in granting summary judgment against him because he raised a fact issue about whether Southwest Rodeo owed him a duty of reasonable care. Our review of a traditional summary judgment is well settled. We consider all of the evidence in the light most favorable to the non-movant to determine whether the movant has shown that no material fact issue exists and it is entitled to judgment as a matter of law. See Carbonara v. Tex. Stadium Corp., 244 S.W.3d 651, 654 (Tex. App.-Dallas 2008, no pet.). A defendant is entitled to summary judgment if it conclusively negates at least one element of the plaintiff's cause of action or conclusively establishes all of the elements of an affirmative defense. See Johnson Cnty. Sheriff's Posse, Inc. v. Endsley, 926 S.W.2d 284 , 285 (Tex. 1996). If the motion and summary judgment evidence facially establish a right to judgment as a matter of law, the burden shifts to the non-movant to raise a genuine issue of material fact sufficient to defeat summary judgment. See Transcontinental Ins. Co. v. Briggs Equip. Trust, 321 S.W.3d 685 , 691 (Tex. App.-Houston [14th Dist.] 2010, no pet.).

Southwest Rodeo moved for summary judgment on the ground that it owed no duty to Jensen as a matter of law. It has long been recognized that a lessor generally owes no duty to a tenant or its invitees for dangerous conditions on the leased premises. See Endsley, 926 S.W.2d at 285. The tenant takes the property as he finds it and assumes the risk of apparent defects. See Flynn v. Pan American Hotel Co., 183 S.W.2d 446 , 448 (Tex. 1944). Jensen concedes that this rule, if applicable, relieves Southwest Rodeo of liability for his injuries. *fn1 He argues, however, that the Texas Supreme Court has recognized several exceptions to this general rule and it is on one of these exceptions that he relies to assert that Southwest Rodeo was not entitled to summary judgment.

The exception upon which Jensen relies is that a lessor may be liable for injuries caused by a defect on a portion of the premises that remains under the lessor's control. See Endsley, 926 S.W.2d at 285. Jensen contends that, although he fell in the arena area that was leased by the Temple, he presented sufficient summary judgment evidence to create a fact issue about whether Southwest Rodeo retained a right to control the portion of the premises in which he fell. We disagree.

The retained-control exception is generally applied to common areas maintained by the landlord for the use and benefit of multiple tenants or the public. See Palermo v. Bolivar Yacht Basin, Inc., 84 S.W.3d 746, 750 (Tex. App.-Houston [1st Dist.] 2002, no pet.). The rationale of the common area cases is that because no individual tenant controls the common area, the landlord remains in control. Id. It is undisputed in this case that Jensen fell in an area of the arena that was leased to the Temple and that the Temple was the sole lessee. Accordingly, the common area rationale does not apply.

Jensen contends the evidence shows Southwest Rodeo maintained sufficient control over the area made the subject of the lease to raise a fact issue on the retained-control exception. Jensen relies heavily on this Court's opinion in City of Irving v. Seppy. See City of Irving v. Seppy, 301 S.W.3d 435 (Tex. App.-Dallas 2009, no pet.). In Seppy, we addressed whether the City owed a duty of care to an invitee of a community theater group that contracted with the City to use a performing arts center. Based on the evidence presented, we concluded the plaintiff raised a material fact question about the City's control over the premises. Id. at 446. The facts presented in Seppy and the facts presented here are materially different in several important respects. First, we noted in Seppy that we were making no determination about whether the agreement between the parties constituted a lease creating a landlord-tenant relationship. Here, the parties do not dispute that the contract at issue is a lease agreement.

Next, the evidence in Seppy showed the City provided maintenance, repair, and cleaning for the premises at issue. In contrast, the lease agreement between Southwest Rodeo and the Temple required the Temple to return the facilities in "good condition and repair" at the end of the lease term. This contractual requirement placed the responsibility for maintenance, repair, and cleaning on the Temple, not Southwest Rodeo, during the term of the lease. The fact that Southwest Rodeo required maintenance to be performed shows only its intent to protect its interest in the property and not a retention of control over the property during the lease term. See Flynn, 183 S.W.2d at 449-50. Finally, the evidence in Seppy showed that the City controlled the theater group's access to the premises at issue. The contract between the City and the theater group specified what times of day the doors would be opened and closed. Although the contract between Southwest Rodeo and the Temple specified what times of day the Temple was contracting to use the leased premises, Jensen provided no evidence to show that Southwest Rodeo retained the right to control the Temple's access to the premises. If the Temple used the premises during a time of day not specified in the lease, they were merely subjected to additional charges. The usage schedule was not a retention of control but a means of defining the amount of usage fees to be charged. For these reasons, we conclude Seppy is inapposite.

Jensen also points to a provision of the lease agreement that permits the general manager of Southwest Rodeo, or his representative, a right of access to the premises during the lease term for matters connected with the facilities. The reservation of a right to re-entry, however, does not amount to a retention of control. See Shell Oil Co. v. Khan, 138 S.W.3d 288, 297 (Tex. 2004); Daitch v. Mid-America Apartment Cmtys., Inc., 250 S.W.3d 191, 195 (Tex. App.-Dallas 2008, no pet.). The critical issue is who had the right of possession of the premises and not merely the right of access. See Daitch, 250 S.W.3d at 195.

Finally, Jensen argues that the evidence shows Southwest Rodeo retained a right of control over the premises because the lease contract limited the manner in which the premises could be used and deposition testimony showed that Southwest Rodeo placed its employees on the premises as ushers. The lease agreement limits the Temple's use of the premises to only those purposes for which it specified it sought to lease the facility. The lease further requires the Temple to abide by the law and certain safety precautions such as not exceeding the maximum seating capacity and not blocking passageways including aisles, halls, and stairwells. Any radio or television broadcasts could not be done without Southwest Rodeo's written consent. Southwest Rodeo's general manager testified that his company placed ushers in the arena during events so that if an accident occurred, the ushers would be there to assist. These general requirements, much like the requirement that the premises be kept in good repair, are intended to protect the lessor's interests. They do not evidence an intent to control either the premises or the details of the lessee's use of the facility. Cf. Exxon v. Tidwell, 867 S.W.2d 19 , 21-22 (Tex. 1993). The control necessary to impose a duty of care is physical control of the property or the intention to occupy or possess the property. See De Leon v. Creely, 972 S.W.2d 808, 812 (Tex. App.-Corpus Christi 1998, no pet.). Jensen presented no evidence that would raise a fact question about Southwest Rodeo's physical control of the premises at issue or its intention to occupy or possess the premises during the lease period.


Based on the foregoing, we conclude Jensen failed to raise a genuine issue of material fact that would preclude summary judgment in favor of Southwest Rodeo on the ground it owed no duty to Jensen. Because we have resolved Jensen's first issue against him, it is unnecessary for us to address Jensen's second issue.

We affirm the trial court's summary judgment.

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Opinion Footnotes

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*fn1 Jensen does not challenge the summary judgment on his separate claim for negligence.

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source: www.law.com (10/11)