Three years ago, voters in Texas passed Proposition 12, which gave the state legislature authority to set limits on non-economic damages awarded to plaintiffs in civil lawsuits against physicians.

Many people thought this was necessary because the rates for malpractice insurance kept rising and were getting too high, but this caused a problem for the Texas Medical Board which has to process applications from out-of-state doctors seeking a Texas license.

According to reports issued by Joe Nixon, a former Houston state representative and author of the medical reform bill, a record 4,026 applications were received by the medical board last year. That is 34 percent more than 2005, which previously was the busiest year.

Five months into the current fiscal year, new applications are on pace for another record year.

“Three years ago, we were having trouble attracting doctors to our state,” Nixon said. “Now, we can't keep up with the demand. Clearly, the lawsuit protections passed in Texas have made this state a magnet for new physicians.”

Eighty-two percent of the applicants for new licenses are from out-of-state. Quite a few of those applying are from New York , Florida , Illinois , Pennsylvania and Massachusetts . These states are all designated by the American Medical Association as states in liability crisis.

The current number of those on the waiting list for licenses is 2,594. This number is greater than the total number of new doctors the state licensed last year.

“Lawmakers were hoping the reforms would end soaring insurance costs and the exodus of doctors and indeed they have,” Nixon said. “The immediate surge in applications caught everyone by surprise. By fixing one problem, we created another, but this latest problem is good to have.”

Applications for new physician licenses have jumped 57 percent since the passage of Proposition 12, but the number of people processing applications at the Texas Medical Board has remained the same. The staff is overwhelmed by the increased workload.

Three years ago, a doctor with a clean and complete application could be licensed in 60 days. Today, the application process is taking six months and longer.

“By adequately staffing the medical board, Texas could license up to 4,000 competent and qualified physicians annually,” Nixon said.

Since the passage of the 2003 reform, Texas has improved its national standing from 45th to 42nd in the American Medical Association's measurement of patient care doctors per capita. Nixon said that if the medical board was fully staffed, the state could move into the middle of the pack within a few years.

The Texas Medical Association reports that every professional liability insurance underwriter in Texas has reduced its premiums for physicians in the past three years. The Texas Medical Liability Trust, the largest carrier in Texas , posted rates they charge physicians for $1 million/$3 million coverage now compared to 1999 and 2003.

An internal medicine doctor in the Panhandle area paid $6,478 for coverage in 1999, which jumped up 125 percent to $14,582 in 2003. The current rates for 2007 have dropped 26 percent to $10,713.