Influx of doctors a fairy-tale ending to Texas med-mal turmoil.

Once upon a time in Texas, 6,700 doctors, dropped by their carriers, were scrambling to find liability insurance and only four medical-malpractice carriers were operating in the state.

The high cost of doing business in Texas was driving both doctors and carriers out of the state until a series of health-care and tort reforms introduced in 2003--a white knight, indeed--dramatically transformed Texas' medical-liability system.

Today, the fairy tale enduring, as proponents of the reforms see it, is evidenced not only in the rate and tort environment but in the flock of doctors applying to practice in Texas, and the number of carriers eager to insure them. Last month, the Texas Medical Board announced that it has 2,533 pending license applications from physicians seeking to set up shop in the state. That is more than the total number of doctors that were licensed all last year.

The more hospitable legal climate--resulting from Proposition 12, a constitutional amendment allowed the state to impose a $250,000 cap on pain and suffering-type awards--is credited with helping to stabilize the insurance market.

"The exodus of physicians has stopped" said Jon Opelt, executive director of Texas Alliance For Patient Access. "Physician practices and hospital practices are in a growth mode." The state is expecting to license about 3,000 physicians this fiscal year which ends Aug. 31. That number could jump to 4,000 in the next fiscal year.

There are now 30 new carriers providing coverage in Texas, bringing the total to 34, Opelt said. The competitive insurance marketplace has resulted in significant reductions in medical-malpractice rates. Since the passage of Proposition 12, average rates in the physician-liability market are down on average 21.3%.

For long-established carriers like the Texas Medical Liability Trust, the largest physician liability insurer in the state, there's now more competition but also more potential policyholders. Bob R. Fields, TMLT's acting president and chief executive officer, said the company is insuring doctors in many of the areas where it was previously difficult to defend claims--the Valley, El Paso and Beaumont, among them. "We're seeing improvement in the claims situation in virtually all areas of the state. There's been a lessening in the severity of claims, but the most noticeable thing we've seen is a sharp reduction in the frequency. Doctors [now] are free to practice good medicine. There's less pressure to practice defensive medicine."

But Texas lobbyist Alex Winslow, executive director for Texas Watch, says most of the carriers Texas is attracting are risk retention groups that are free of any oversight from the department of insurance. "We can't ensure they're going to charge physicians fair and reasonable premiums."