Docs demanding reform as insurance crisis worsens
Docs demanding reform as insurance crisis worsens
Physicians want limits on malpractice awards
According to a recent analysis by the Chicago-based American Medical Association (AMA), 18 states are experiencing a medical liability crisis, with residents unable to get needed medical care because physicians there cannot afford insurance premiums for medical malpractice coverage.
In a June 2002 report, the AMA indicated that 12 states — Florida, Georgia, Mississippi, New Jersey, Nevada, New York, Ohio, Oregon, Pennsylvania, Texas, Washington, and West Virginia — had reached a crisis stage in provider shortages due to liability insurance rates. On March 3, the association added six more states to the list: Arkansas, Kentucky, Connecticut, Illinois, Missouri, and North Carolina.
"There is something terribly wrong when dedicated professionals, who have trained for years, want to give up the work of a lifetime, move to another state, or stop offering high-risk procedures such as delivering babies," says AMA president Yank D. Coble, MD.
Among the findings in the AMA’s analysis:
- More than 50% of Arkansas physicians report that they have been forced to reduce or discontinue one or more medical services in the last two years due to rapidly increasing medical liability premiums.
- In Connecticut, premiums for neurosurgeons and other high-risk specialists are more than $100,000 per year, and an increasing number of obstetricians in that state are refusing to deliver babies.
- High-risk specialists in Kentucky, including emergency room physicians and general surgeons, saw increases in their liability premiums of between 87% and 200% last year.
- North Carolina hospitals have seen professional liability insurance premium increases of 400% to 500%, with small rural hospitals experiencing the greatest increases.
The culprit in these skyrocketing insurance premiums, Coble says, is the current medical malpractice system, which has become a "lawsuit lottery" in which select patients and attorneys get astronomical awards while others are left out in the cold.
According to jury verdict research cited by the AMA, the median jury award increased 43% in the one-year period from 1999 to 2000, with more than half of all awards topping $1 million and the average award coming in at $3.5 million.
The AMA and others want to see a federal cap limiting non-economic damage awards to $250,000, similar to a California state law that already limits damage awards. But others say high damage awards are not the real force behind the rising insurance premiums, and capping damage awards will only limit the ability of injured patients to get compensation for medical mistakes and encourage bad physicians to continue to practice.
"Doctors are falsely demonizing America’s legal system rather than saving tens of thousands of lives and litigation costs by preventing careless or unnecessary medical errors, such as operating on the wrong part of the body," says Joan Claybrook, president of the consumer advocacy group Public Citizen. "Most injured people don’t sue. They turn to the courts in egregious situations. Capping damages will only hurt those who have suffered the most."
Recent spikes in insurance premiums are the result of cyclical economic factors affecting the insurance companies and are not tied to substantial increases in jury malpractice awards, Claybrook claims. The medical professional societies would better serve patients by better policing their own members, she adds. Studies conducted by Public Citizen and by independent research groups indicate that the majority of malpractice awards are paid by a minority of "repeat offender" physicians.
And contrary to popular opinion, insurance premium rates have not kept pace with the skyrocketing cost of health care overall.
For example, West Virginia received national attention after doctors walked out of hospitals and refused to practice unless the state intervened to reduce malpractice insurance premiums. Yet the median amount of malpractice awards in West Virginia remained steady at $145,000 from 1997 to 2002, the consumer group claims. Adjusting for inflation, the median amount actually represents a decrease.
A key factor in West Virginia’s malpractice insurance crisis is the decision by a large insurance carrier — St. Paul Companies, which once covered one-third of the state’s doctors — to stop offering medical malpractice insurance.
In New York, another crisis state, doctors’ malpractice insurance premiums have remained nearly level for a decade, with the total amount doctors paid in premiums in 2001 at $873 million, compared to $821 million in 1992.
A Public Citizen analysis of information from the National Practitioner Databank indicates 7% of New York doctors are responsible for 68% of malpractice payouts in that state, with 80% of physicians there not paying a malpractice claim since 1990.
Doctors win most suits
Although capping damage awards is not the answer to solving the medical liability crisis, the current system does need reform, malpractice attorneys tell Medical Ethics Advisor.
"If you look at the statistics, about 62% to 67% of the cases that actually go to trial wind up with a defense verdict — the doctor wins. So, how is a cap going to help?" says Brad Parker, JD, a medical malpractice and personal injury lawyer practicing in Fort Worth, TX.
Many patients injured by medical mistakes are not even able to sue because most attorneys won’t take cases if the expected payout isn’t high enough to cover legal fees and still compensate the victim, he adds.
"Once we get to a point we think we might take a case, we also look at damages," he says. "The state of malpractice right now is such that unless I have a patient who has serious and permanent damages, I don’t want the case. I am not even talking about a case where they had to go back in for a second surgery to correct what they goofed up the first time and the person missed an additional six weeks of work. From my perspective, that is not a case, because I am going to spend tens of thousands, if not hundreds of thousands, of dollars on the case, and what is six weeks of work and surgery really worth?"
Most malpractice attorneys turn away clients with valid claims all the time because the claims do not justify the economic expense of a lawsuit.
Some experts have proposed that the current tort structure for medical malpractice be replaced with an alternative system — possibly similar to worker’s compensation — in which providers pay into a pool that would compensate patients injured by medical mistakes.
Last year, a report from a committee at the National Academy of Sciences’ (NAS) Institute of Medicine called for a small number of states to develop injury compensation systems outside the courtroom that would be "patient-centered" and "focused on safety."1
The systems would be able to set reasonable payments for avoidable injuries; provide fair, timely compensation and apologies to a greater number of patients; and stabilize the malpractice insurance market by limiting providers’ financial exposure, the report suggested.
"A lot of people recognizing that we do have a medical malpractice crisis focus solely on the size of the damage awards," says attorney Mark Lamb, JD, who practices health law with the firm Preston, Gates and Ellis in Seattle. "The NAS proposal says there are other problems as well: the length of time of litigation, delayed payments, and the fact that people with relatively minor medical mistakes don’t really have access to the courts."
The current tort system also presents a number of "perverse incentives" that keep hospitals and physicians from disclosing mistakes when they are made, he adds. In order to keep premiums low, physicians have an incentive not to self-report medical errors, in addition to the natural inclination not to acknowledge mistakes.
"In the idea of a non-judicial system where you could honestly flag an mistake and already have a realistic sense of what the economic implication would be, you wouldn’t be in danger of losing your entire practice over it and there would be some sort of certainty to the result, which would give some sense of rationality to the system as a whole," Lamb says.
Better reporting of medical errors would allow the health care industry to track physicians responsible for a larger percentage of them and institute some kind of intervention, he adds. The report did not call for an immediate shift to non-judicial remedies, but asked that four or five states initiate pilot programs that would be evaluated at the end of a specific time.
"What I like about the proposal is that it takes a step back from the current wars over a damage cap and tries to think about what the goals of the system are, and one of the goals is to discover medical errors, as well as providing prompt payment to the injured," he says. "We do need a system that functions more rationally, where you don’t have huge disparities in awards, with someone who gets the right jury gets enormous damages, whereas someone else with the same injury gets almost nothing. I don’t think that benefits anyone."
For More Information
• The American Medical Association has an information resource on medical liability reform issues. The resource can be accessed on the association’s web site at: www.ama-assn.org/ama/pub/category/7861.html.
• The consumer group Public Citizen has published a number of research reports on the medical malpractice crisis, including state-by-state reports on malpractice insurance premium rates and the number of damage awards. The reports are available on the group’s web site at: www.citizen.org.
Sources
- Yank Coble, MD, American Medical Association, 515 N. State St., Chicago, IL 60610.
- Joan Claybrook, Public Citizen, 1600 20th St. N.W., Washington, DC 20009.
- Brad Parker, Watson & Parker, 1701 River Run, Fort Worth, TX 76107.
- Mark Lamb, Preston, Gates and Ellis, 925 Fourth Ave., Suite 2900, Seattle, WA 98104-1158.
Reference
1. Committee on Rapid Advance Demonstration Projects: Health Care Finance and Delivery Systems. "Fostering Rapid Advances in Health Care: Learning from System Demonstrations." National Academy of Sciences, Institute of Medicine; 2002. http://national-academies.org.
According to a recent analysis by the Chicago-based American Medical Association (AMA), 18 states are experiencing a medical liability crisis, with residents unable to get needed medical care because physicians there cannot afford insurance premiums for medical malpractice coverage.Subscribe Now for Access
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