New Study Says Caps Don’t Work in Lowering Healthcare Costs

Former Texas Governor Rick Perry has made it a staple of his stump speech and many elected officials agree with him that capping medical malpractice damage awards lowers healthcare costs. However, according to a new study, that’s simply not the case.
The experience in Texas appears to undermine most of the claims made by damage cap advocates. This is documented in a recent study released by Public Citizen, “A Failed Experiment: Health Care in Texas Has Worsened in Key Respects Since State Instituted Liability Caps in 2003.” The subtitle effectively sums up the conclusions of the report.
The study found that Medicare spending has increased faster in Texas than the national average, in spite of the “steep reduction” in litigation that followed 2003. Outpatient services costs covered by Medicare have also exceeded national averages. More Texans lack health insurance, the per capita number of doctors has not increased noticeably, and premiums for private health insurance have increased at a rate higher than the national average.
Despite the high-profile claims made by many politicians and presidential candidates, what has actually happened in Texas does not support this so-called tort reform.
It may be good politics to associate capping malpractice damages with lowering healthcare costs but it’s inconveniently untrue.