The Texas Watch Foundation examines how House Bill 4 has affected patients’ rights, healthcare and medical malpractice suits: “Riding an electoral wave that saw the election of Rick Perry to his first full term as governor,[1] a large class of impressionable freshman members in the House, and a hard-line speaker, Tom Craddick, the corporate immunity lobby tilled fertile ground during the 78th Legislature in 2003.[2] Emboldened after pushing through lawsuit restrictions in 1995[3] and 1997,[4] this lobby and their functionaries in the Legislature rammed through HB 4 in 2003,[5] an omnibus package of restrictions that were sweeping in scope and unprecedented in their destructive effect on the rights and lives of everyday Texans. Ten years later, patients continue to struggle with high cost, low access health care, corporate wrongdoers are allowed to divert and evade responsibility for their actions, and our most vulnerable are acutely impacted by the negative affect of limits on individual legal rights.
Totaling 133 pages in length, HB 4 was a sprawling piece of legislation that upended and undercut myriad aspects of the Texas civil justice system.[6]
Medical Malpractice
HB 4 restricts the rights of patients in numerous ways, including imposing a one-size-fits-all $250,000 cap on non-economic damages that effectively deprives many patients and their families of due process; [7] allowing emergency room doctors to escape accountability for substandard care; [8] requiring patients to give pre-suit notice of any health care liability claims and file a detailed expert report within an arbitrary 120-day deadline (with case-killing penalties if they fail to do so).[9] The noneconomic damages cap, which is not indexed to inflation and thus worth less each year, hits those without wages and economic damages particularly hard, making even the most clear-cut malpractice cases on behalf of the elderly, the young, the disabled, and stay-at-home parents financially impossible to pursue for many given the high cost of retaining medical experts, which comprise the bulk of litigation expenses. The merits of one’s case are far outweighed by their socioeconomic status. Under Texas law, the value of one’s life is essentially reduced to the value of their paycheck. You are what you make. Life is cheapened and families are devalued. Instead of being a right possessed by all, what little justice remains becomes a privilege for the few. As many as 98,000 Americans die each year from preventable medical errors in hospitals,[10] a staggering and senseless loss of life. A mere 5.9% of physicians are responsible for 57.8% of all malpractice payments.[11] Despite the extent of medical errors, researchers have demonstrated that as few as one out of every twenty-five patients with a negligent or preventable injury goes to the length of bringing a medical malpractice claim.[12] In Texas, from 1990 to 2002, the number of smaller paid claims declined sharply, and adjusted for the number of physicians or growth in real health care spending, the total number of paid claims and the number of large paid claims declined.[13] However, these facts did not get in the way of the so-called tort “reformers,” who in their effort to carve up patient protections, cried that there was a “crisis” in medical malpractice claims as insurance premiums were ratcheted upward by carriers. Instead of improving the quality of medical care and investigating the accuracy of insurance premiums, safety was sacrificed and patients’ rights were eviscerated. In this brave new world, a tiny state agency, the Office of Patient Protection, was supposed to serve as a counterbalance for patients, but it was smothered in the cradle before it could even represent any aggrieved patients.[14] The Texas Medical Board, which nominally regulates physicians, does not have the will to consistently remove incompetent doctors from the practice, nor does it have a mechanism to compensate patients or adjust liability disputes between patients and doctors. Because of our broken legal and regulatory systems, Texas threatens to become a dumping ground for dangerous doctors.[15] Restrictions on patients’ rights were sold with lofty promises about access to care, such as Governor Perry’s statement that HB 4 would “protect patient access to quality health care.”[16] However, this rhetoric does not reflect reality. Texas ranks 1st in the percent of the population without health insurance, 41st in the number of physicians per capita, and 46th in the per capita number of registered nurses.[17] Governor Perry’s claims about Texas gaining doctors due to tort reform have been thoroughly investigated and determined to be outright false by the Pulitzer Prize-winning PolitiFact.[18] Rural communities are grossly understaffed, with 63 Texas counties having no hospital, 27 counties having no primary care physicians, and 16 counties having only one such doctor.[19] Roughly half of this 268,000 square mile state is covered by trauma centers in just two cities: El Paso and Lubbock.[20] According to a 2008 academic study on the impact of HB 4 on physician supply, researchers concluded that “Texas was not losing physicians before HB 4 took effect,” “the data do not yet support claims of dramatic improvements in patient access to physicians,” and “tort reform had limited impact on the number of DPC [direct patient care] physicians, including DPC specialists.”[21] In follow-up research published in 2012 that looked at a longer trend of physician supply data, the same scholars concluded: “Physician supply was not stunted prior to reform, and it did not measurably improve after reform. This is true whether one looks at the number of patient care physicians in Texas, the number of Texas physicians in high-malpractice-risk specialties, or the number of physicians per capita in Texas relative to other states.”[22] Furthermore, health care costs for both families and taxpayers continue to rise. Annual health insurance premiums paid by employees (not including employer contributions) for Texas families have increased from $1,759 in 2000[23] to $4,318 in 2011[24] – a whopping 145% increase in out-of-pocket premiums paid by Texas workers. Additionally, out-of-pocket costs as measured by deductibles are up 79%.[25] Meanwhile, per patient Medicare spending in Texas has risen at a rate that is nearly double the national average.[26] Texas’ medical crisis has only been exacerbated by a crisis in its judicial system, as many patients have access to neither a doctor in the event of illness nor a courtroom in the event of suffering a preventable injury. The biggest beneficiaries of this rigged system are the professional liability insurers who are able to routinely collect premiums for malpractice policies that they will rarely have to pay out on.
Nursing Homes
Incredibly, nursing homes, which should exercise attentive care in allowing our most vulnerable citizens to live out their final years with dignity, were given the state’s seal of approval to “go bare” and forgo liability insurance during the 2003 session.[27] This means that these facilities have been authorized to operate irresponsibly – with de facto immunity – as no victim’s attorney will be able to incur the expense of prosecuting their negligence without the ability to recover from the wrongdoer. The Texas Legislature also wrote nursing homes into HB 4[28] and made it exceptionally difficult to admit records of their administrative violations and penalties into evidence during trial. [29] Couple this with an activist, corporatist Texas Supreme Court that has gone to the absurd lengths of interpreting spider bites[30] and sexual assaults[31] as “health care” claims, thereby shielding wrongdoers from responsibility, and you have a recipe for disaster. It should come as no surprise, then, that given the ability to operate without any real accountability, nursing homes in Texas have cut corners and endangered patients, ranking second-to-last in the nation in terms of staffing.[32] In addition, a shocking 26% of Texas nursing homes have been given the worst rating on The Center for Medicare and Medicaid Services’ comparative scale.[33] Through deliberate public policy choices such as these, the Texas political leadership has demonstrated their belief that life, in the end, means little.
Offer of Settlement
HB 4 also enabled defendants to trigger a special protocol for making settlement offers, which imposes high stakes on plaintiffs if they persist in exercising their constitutional right to a trial by jury and reject the offer. The rejecting party is liable for the other party’s litigation costs, including attorney’s fees, if there is more than a 20% differential between the judgment and the offer.[34] This imposes severe risks on plaintiffs who seek a public accounting for defendants’ wrongdoing. Justice is about more than money, but this provision crassly and coldly reduces cases solely to dollars and cents. For a wrongly-accused person seeking to clear their name through a libel suit or a grieving family wanting to discover, fully comprehend, and publicly expose corporate wrongdoing so that steps are taken to ensure others’ loved ones will not be killed through malfeasance, this “offer of settlement” law can be used to intimidate them and forcibly purchase their silence. This law is conceptually based on a so-called “model” law developed by the corporate-backed American Legislative Exchange Council in 1995.[35] This law would also be at the center of the corporate immunity lobby’s efforts in Texas during the 2011 legislative session. The so-called “offer of settlement” provision was expanded in 2011 when lawmakers enacted HB 274,[36] which included what they term a “loser pays” provision. But in the twisted reality of Texas jurisprudence, winners may actually be forced to pay under the arcane offer of settlement statute, to further tilt the scales against victims by potentially wiping out the entirety of a judgment awarded by a jury.[37] In other words, a plaintiff could bring a valid claim, have a jury rule in their favor and award damages – only to be forced to pay the wrongdoer’s legal costs in the end, erasing their entire judgment in the process.[38]
Responsible Third Party
A study in Orwellian doublespeak, the legal creation in HB 4 of “responsible third parties” are anything but, for they are neither proper “parties” to a suit nor are they held legally responsible.[39] However, they are extremely useful to defendants in that they allow them to reduce their own liability by pointing the finger at an empty chair, such as an unknown criminal, bankrupt company, or foreign entity, from whom the plaintiff cannot recover. The jury, not knowing the effect of their answers, may understandably think that they are helping a deserving plaintiff by apportioning liability to this “responsible third party”; but in our zero sum reality, every percentage point of fault that they assign to the “responsible third party” is a percentage point that is not assigned to a defendant, who is properly joined in the case and, therefore, subject to recovery. Stated bluntly, strategically scapegoating a “responsible third party” allows a defendant to fade the heat for its own wrongdoing.
Products Liability
HB 4 directed Texas courts to defer and look up to federal agencies in many state products liability actions. For actions alleging inadequate warnings regarding pharmaceuticals, a rebuttable presumption is created in favor of defendants if the warnings that accompanied the product were approved by the United States Food and Drug Administration (i.e., the “FDA defense”).[40] And in other products liability actions concerning the formulation, labeling, or design of a product, a similar rebuttable presumption (i.e., a legal conclusion that is taken as true unless proven otherwise) is created for product manufacturers or sellers who show that they complied with federal regulations.[41] At base, these reforms act to deprive state judges and juries of their ability to determine whether a product is unsafe, ceding this authority instead to unelected, unaccountable federal bureaucrats in agencies that have often been purposefully understaffed and underfunded, constrained in their authority, and are otherwise subject to influence by the industries that they are supposed to regulate.[42]
Conclusion
As Texans look back at the impact of HB 4, it is abundantly clear that its so-called “reforms” were designed not to help individual Texans. Indeed, the story of the 2003 legislation is the violence it has done to our system of justice. Through HB 4 and its progeny, our state has traded meaningful, public accountability for immunity, leaving untold numbers of Texas families to bear the financial, physical, and emotional costs of needless harm so that corporate wrongdoers and their insurance cohorts can avoid legal responsibility.
