Many physicians and Republican lawmakers are asking why the president wants to test "demonstration projects" when reforms have already proven successful on the state level.

Many physicians and Republican lawmakers were happy to hear President Obama raise the issue of medical malpractice in his address to Congress last week, but now are asking why the president wants to test "demonstration projects" when reforms have already proven successful on the state level.

"Whole states are demonstration projects," said Rep. Lamar Smith, R-Texas. "Texas passed tort reform in 2003 and ... insurance premiums went down 30 percent. California passed tort reform and premiums went down 40 percent. Let's enact tort reform. Let's not just try that with demonstration projects. We already know it works. Let's put it into law."

During his address to a joint session of Congress, the president argued that some lawmakers will resist any health care reforms. But then in a bid at bipartisanshop, he said he agreed with doctors -- and Republicans -- looking for changes to the way medical malpractice lawsuits are litigated.

"I don't believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs," the president said.

Smith said Texas has already proven the effect of tort reform on medical care.

When Texas passed tort reforms in 2003, medical malpractice insurance premiums went down and doctors started rushing back into the state. At least 10 counties that had zero obstetricians, for instance, now have one, and more than two dozen other counties have seen additional obstetricians seek licenses there.

"We now have women that are getting their care in local communities whereas before, for their obstetric care, they had to drive hundreds of miles to be able to get it," said James Rohack, president of the American Medical Association. "Before the reforms, there was such a shortage of obstetricians, many expectant mothers had to drive long distances for care. The liability reforms changed that."

Many doctors pay $100,000 to $250,000 a year in malpractice insurance even if they've never had a judgment against them. Neurology leads the list of high-cost malpractice insurance. Obstetrics isn't far behind.

Supporters of tort reform argue that expense doesn't just drive up the price of medical care, it also leads to defensive medicine, meaning doctors order all sorts of tests they wouldn't otherwise order just to make sure they won't get sued.

In one study of doctors in Massachusetts, 83 percent of respondents said they ordered tests they thought were unnecessary just to protect themselves from liability. And that, doctors argue, adds huge amounts to the nation's health care bill.

"Defensive medicine is a very important component of the health care equation," said Dr. Albert Strunk of the American College of Obstetricians and Gynecologists. "It's also a component that is notoriously difficult to evaluate in terms of actual dollars. We've seen estimates anywhere from $60 billion a year to $200 billion a year as far as defensive medicine is concerned."

Opponents of medical malpractice reforms say it is unfair to limit awards to individuals legitimately injured by a doctor's negligence.

Juries often side with patients for a pay-out above "compensatory damages," or the actual damages sustained by treatments that harm a patient's life or ability to make a living. They often award what are called "non-economic damages," meaning damages for pain and suffering. This is where trial lawyers aim to win huge sums of money to punish doctors.

That is what critics say drives the inflated costs. And that is what Texas decided to limit.

Strunk said the pay-off nationally would be better care.

"Pilots can report near misses without fear of punitive action. In our system any effort to recognize something that could be improved or any change that we make to effect an improvement turns around and gets used against us in the context of litigation."

Obama is not embracing any effort to limit liability -- or place award caps on injured patients, a disappointment to those who thought the president had seen it their way on frivolous lawsuits.

Rather, administration officials say they're looking at testing "certificate of merit" programs in which a panel of experts decides whether a case has merit before it goes to the courts.

Another option is "early disclosure," which encourages doctors to apologize early on for any errors and the case goes to mediation.

Doctors groups have other ideas as well, such as separate "health courts" that would deal only with these kinds of cases.

"I think we're seeing consensus along the lines of safe harbor for doctors who use best practices, and this idea of medical courts, use of arbitration to lift a lot of these cases out is under discussion," said Sen. Kent Conrad, D-N.D., a chief negotiator in the Senate.

But Smith said if the president were serious about a bipartisan health care bill, he would do more than talk about tort reform pilot tests.