Finally, we should avoid blaming this crisis on the patient. After all, 99.9% of patients are our best allies in this struggle. Their welfare and continued access to high-quality care should be our primary concerns.
You need to get to work on your medical liability situation before you become another Pennsylvania. We need tort reform if our patients are going to maintain access to their health-care provider. And we need it now!
The view nationwide: medical liability in selected states
Over the past 2 years, premiums for medical liability insurance have risen sharply, primarily as a result of increasing jury awards. The national average of these awards is now $3.49 million, an increase of 79% since 1993.1
Other factors include years of unnaturally low premiums—during which insurers fought over market share—and a declining stock market. (Many insurers covered their losses in premiums with their gains in the market.) Another factor contributing to excessively low premiums in years past is the fact that roughly three-fifths of malpractice insurance is made available by mutual companies, which are owned by physicians and hospitals.1 The hike in premiums has hit Ob/Gyns and surgeons hardest, since they are sued more frequently than other specialists.
Among the largest insurers, the St. Paul Company increased its premiums an average of 24% in roughly half the states, cutting 42,000 doctors from its rolls, while Scpie Companies raised its rates an average of 30% to 50% in 12 states. A number of physician- and hospital-owned companies are following suit, hiking premiums more than 50%.1,2 Conditions vary widely by state. A few snapshots include:
- West Virginia, where medical liability premiums for some specialists are more than twice those in neighboring states. Of the 60 insurance companies licensed to provide medical liability coverage in West Virginia, only 2 actively do so, and the largest—St. Paul—plans to leave the state.3
- Nevada, where 60% of physicians in Las Vegas were covered by the St. Paul Company until the recent cuts. Those struggling to secure replacement policies are finding that premiums run 4 to 5 times higher—when they can find them. About 10% of Las Vegas physicians are expected to retire or move away by summer, leaving the city with a serious doctor shortage.2 The state legislature recently established a subcommittee to investigate these issues.
- Mississippi, where coverage for obstetricians rose 20% to 400% in 2001, and annual premiums range from $40,000 to $110,000. Rural areas are bearing the brunt of the suffering, since they were short on doctors to begin with.4
- Florida, where annual premiums for Ob/Gyns and surgeons top $100,000 for $1 million in coverage.1
- New Jersey, where Zurich American Insurance Company raised malpractice premiums for more than 500 doctors. Newly elected Governor Jim McGreevey considers medical liability coverage 1 of the state’s 5 most pressing health issues. Obstetricians have seen their premiums rise by as much as 120%.5
Repercussions of the crisis include rising medical costs as doctors practice “defensive medicine,” i.e., ordering more tests than usual and opting for “low-risk” procedures such as cesarean delivery. Further, when a physician is sued, he or she is likely to face pressure from the insurer to settle the case, even when the chances of prevailing at trial are good.
The American College of Obstetricians and Gynecologists (ACOG) is monitoring the crisis and has produced a “tool kit” on state obstetric liability reform. For more information, contact the ACOG department of state legislative activities.
REFERENCES
1. Treaster JB. Malpractice rates are rising sharply; health costs follow. New York Times. September 10, 2001.
2. Gorman T. Malpractice rate hikes spur a doctor shortage. Los Angeles Times. March 4, 2002.
3. Trump CS, IV. Medical malpractice crisis: Republican delegates vow to continue tort reform effort. Charleston Gazette. February 8, 2002: 5A.
4. Some Mississippi doctors quit obstetrics, citing insurance cost. New York Times. November 22, 2001.
5. Washburn L. Crisis brews as malpractice premiums soar. The Record. December 22, 2001.
Editor’s note: At press time, the Pennsylvania malpractice overhaul was waiting to be signed into law.