Does malpractice liability pressure lead to reduced care?
As the debate over the malpractice insurance crisis continues with little sign of agreement on causes or cures, there is little definitive that can be said about the impact of malpractice insurance pressures on access to and utilization of care.
Utah Division of Health Care Financing director Michael Deily tells State Health Watch that malpractice rate increases are pressuring Medicaid programs to increase rates and also may be driving access problems. "The issue seems to be most acute in the nursing home industry and with OB/GYNs. Because of the low nursing home patient census in many states, the increasing cost in malpractice is primarily a rate issue. There appears to be several interacting factors that may eventually lead to problems with access.
"Medicaid in many, if not all, states pays for a significant percentage of deliveries. Therefore, the Medicaid rate is an important revenue source for OB/GYNs," he adds. "Being a public program, Medicaid provides a forum for the industry to negotiate rates and surface issues like the increasing cost of malpractice. Commercial plans reputedly are not as open to the type of dialogue we engage in with Medicaid. And Medicaid rates are often lower than commercial plans."
Mr. Deily says that given these dynamics, there will be pressures to increase Medicaid rates as costs go up in any area of practice. There also are other changes going on that may increase the challenges for Medicaid programs. For instance, he says he’s hearing that many OB/GYNs are tiring of the long hours of work and other lifestyle issues related to the type of practice, and could look to those issues, plus the cost of malpractice insurance premiums, as reason to leave the specialty. Such issues also could mean fewer medical students deciding to enter the specialty, ultimately leading to problems for pregnant women in accessing care.
American Association of Health Plans spokeswoman Susan Pisano tells State Health Watch that litigation and the threat of litigation have an impact on all parts of the health care system, through direct costs such as malpractice insurance premiums and defensive medicine and through problems with access to certain providers and services as units are closed and physicians retire or move to states with more favorable environments.
One area that has been studied more than others is prenatal care provided by OB/GYNs, a specialty with some of the most severe malpractice insurance premium problems.
In 2001, the Journal of Health Economics carried a paper by the Urban Institute’s Lisa Dubay and colleagues that analyzed the widely held belief that malpractice liability pressure results in a reduction in access to and utilization of prenatal care. Ms. Dubay says the results are "broadly consistent" with the hypothesis, although the effect is relatively small: an increase of $10,000 in malpractice premiums increases the incidence of late prenatal care by between 3% and 5.9% for black women and between 2.2% and 4.7% for white women.
"Our results are important," Ms. Dubay says, "because they show that the malpractice liability system has the potential to affect health care utilization in ways other than that associated with positive defensive medicine and overutilization. In this case, we show that the quantity of prenatal care is lower when malpractice premiums are higher, which is consistent with what we have referred to as negative defensive medicine."
A second finding of the study was that the effect of malpractice premiums on prenatal care utilization tends to differ by demographic characteristics that are strongly correlated with socioeconomic and insurance status. Estimates indicated that unmarried women, who are of lower socioeconomic status, are affected more by negative defensive medicine practices than are married women, who are of higher socioeconomic status. And the finding was more pronounced for white women than for black women. Ms. Dubay says the finding is consistent with anecdotal evidence that physicians use insurance coverage and socioeconomic status as an indicator of the risk of a malpractice claim being filed. Another possible explanation is that less generous Medicaid fees interact with malpractice liability pressure to cause physicians to practice negative defensive medicine disproportionately among low-income women, who are predominantly covered by Medicaid. She says that if this is the cause, one policy option could be to increase Medicaid fee levels, but such a more thorough analysis is needed before any such recommendation could be made.
Although the researchers found evidence of negative defensive medicine, they did not find evidence that reduced utilization of prenatal case associated with negative defensive practices adversely affected infant health as measured by birth weight and Apgar scores. Ms. Dubay says that finding suggests that some prenatal care may have marginal value in determining infant health outcomes and that policies that reduce malpractice liability pressure may increase prenatal care that is socially wasteful.
[Contact Mr. Deily at (801) 538-6406; Ms. Pisano at (202) 778-3245; and Ms. Dubay at (202) 833- 7200.]
As the debate over the malpractice insurance crisis continues with little sign of agreement on causes or cures, there is little definitive that can be said about the impact of malpractice insurance pressures on access to and utilization of care.
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