Published in the Wall Street Journal, Friday, May 23, 1997, page B5B.

Gov. George W. Bush announced yesterday that he will let the measure, passed last month by the Texas legislature, become law without his signature.

Although the Republican governor had leaned against the bill because he feared it would spark an increase in new lawsuits and a rise in insurance premiums, he said he had "concluded the potential for good outweighs the potential for harm."

Gov. Bush says many lawsuits should be avoided by the legislation's creation of an independent review panel to assess the merits of a potential case before a lawsuit is filed.

HMO officials said the bill wasn't needed and would only raise health-care costs, but they, too, said they are hoping the review process will minimize the number of malpractice lawsuits filed.

"That is surely preferable to a protracted court case," says Geoffrey Wurzel, director of the Austin-based Texas Health Maintenance Organization Association.

Industry officials said it's too early to decide if they will challenge the law in court.Under the Texas Corporate Practiceof Medicine Act, corporations can't practice medicine. Texas HMOs have long maintained they administer medicine but don't practice it. But the health-maintenance organizations contend that if they are subject to malpractice lawsuits, they must be practicing medicine.

A similar bill was passed last year by the Florida Legislature, but it was vetoed by Gov. Lawton Chiles because of its potential costs. That precedent, combined with Gov. Bush's general lack of enthusiasm for the legislation and his 1995 veto of consumer-oriented legislation that would have allowed HMO members to purchase extra insurance options, had led many Texas legislative observers to be pessimistic about the bill's chances.