Pennsylvania hospitals still fighting insurance crisis

Pennsylvania’s hospitals continue to struggle with the medical professional liability insurance crisis, according to a new member survey conducted by The Hospital & Healthsystem Association of Pennsylvania (HAP).

The survey found that insurance costs are continuing to rise, critical services are being closed, medical residents are fleeing Pennsylvania, and hospitals are having increasing difficulty filling physician openings, says Carolyn F. Scanlan, president and chief executive officer of HAP.

"This survey is a snapshot of the crisis as it existed in October," she says. "A look at the headlines over the past month tells us that the situation continues to deteriorate."

The HAP survey collected data from 150 hospitals and health systems in Pennsylvania. Among the survey’s findings, nearly two-thirds of hospitals report that some physicians are retiring early, curtailing practices, or relocating as a result of increasing liability costs. One-third of hospitals report closing, temporarily closing, or otherwise limiting the volume of services available due to physicians leaving or because of rising liability insurance costs. More than 75 hospital services have been closed over the past 12 months. The most severely impacted specialty services are obstetrics, orthopedics, general surgery, and neurosurgery. More than half of hospitals report having difficulty recruiting physicians to fill vacant positions because of rising liability insurance costs.

Nearly two-thirds of medical teaching programs report that their medical residents are choosing to continue their practices outside Pennsylvania. Half of hospitals report that members of their active medical staffs were denied coverage by commercial insurers and were forced to find alternative coverage in the past 12 months. The total cost of medical liability insurance coverage for Pennsylvania’s hospitals has increased 215% over the past 12 months, and 25% of hospitals reported premium increases exceeding 300%.

"We have made significant progress this year with the enactment of three laws that provide structural changes to the state’s insurance and tort systems," Scanlan says. "But the job is not finished. Our hospitals and physicians still need short-term financial relief, and we will continue to advocate for reforms that fully protect injured patients’ rights to be fully compensated for their economic losses while placing reasonable limits on the excessive noneconomic damage awards that threaten to cripple our health care delivery system."

Steps to short-term relief

Pennsylvania Gov. Mark Schweiker recently took steps to provide short-term, medical malpractice insurance relief for health care providers. Schweiker directed insurance commissioner Diane Koken to request that private medical-malpractice insurers postpone the collection of the Medical Care Availability and Reduction of Error fund assessment from health care providers until April 30, 2003. The insurance department has also been directed by Schweiker to ask the Pennsylvania Professional Liability Joint Underwriting Association, commonly known as the insurer of last resort, or JUA, to investigate whether it can accept monthly premium payments for medical malpractice insurance coverage. Premiums are currently paid every six months.

Pennsylvania health secretary Robert S. Zimmerman Jr. also announced that the Health Department has contracted with The Hospital and Healthsystems Association of Pennsylvania to distribute $3.3 million of federal funds to Pennsylvania’s acute-care general hospitals with emergency departments to assist in emergency preparedness planning and response. A total of 200 hospitals will receive a $5,000 base amount plus 50 cents for every emergency department visit that was reported to the Department of Health in each hospital’s most recent annual survey. A recent assessment by the state found that in 2002, Pennsylvania hospitals spent $8.3 million on emergency preparedness activities. In 2003, hospitals plan to spend $24.6 million.