January 13, 2003 -- Malpractice insurance crisis


This is the quintessential can't-win situation we have when everything
is reduced to money, and greed for it is institutionalized. It would
be monstrous to think money could replace a lost child or the ability
to walk (that's not why people sue), but how much more monstrous to
decide to run a hospital or practice knowing mistakes are more likely
to happen and less likely to be caught before someone is hurt. And
how even more monstrous that some people have the power to make such
decisions!


Doctors Around the Country Deal with Rising Malpractice Insurance
Rates; Some Scale Back Practices (from Kaiser Daily Health Policy

Report and two articles in USA Today. (12-4-02)


Physicians nationwide are facing "double-digit" hikes in malpractice
premiums forcing many of them to stop offering certain procedures,
move to states with lower premiums, or retire early, USA Today reports
(Rubin, USA Today, 12/4). Physicians insured by the St. Paul
Companies, the country's second-largest medical malpractice insurer,
have seen rate increases averaging 24% this year over 27 states.

Orthopedic surgery and obstetrics are the "hardest hit" specialties.
The Physician Insurers Association of America says that from 1985 to
2000 obstetricians and gynecologists had the most claims made against
them, due in part to the "lengthy" 18-year statute of limitations in
such cases. In response, many physicians have stopped delivering
babies, forcing women in "historically underserved areas to travel for
care."

The situation may be more acute in West Virginia than anyplace else,
but doctors across the board and around the country are facing
double-digit hikes in malpractice premiums, something many hadn't seen
since the 1980s. Family practitioner Scott Nelson's practice in his
hometown of Cleveland, Miss. used to be 30% maternity care, but he got
out of that business Oct. 1, when his annual malpractice premium would
have jumped from $30,000 to $105,000.

West Virginia state legislators this week approved "emergency
measures" to keep physicians from leaving the state, including a state
managed insurance program for those unable to obtain private
malpractice coverage and mediation "to encourage pretrial
settlements."

There's much finger-pointing in the debate over soaring malpractice
premiums. Doctors blame greedy trial lawyers and state legislators
who, they say, could have fixed the problem by passing tort reform
measures, such as caps on plaintiffs' payments. Trial lawyers, on the
other hand, blame greedy insurers and negligent doctors.

But what the malpractice insurance companies say is basically that
they're raising their rates to cover their losses on the stock market.
"Rates now are not unreasonably] high, but historically, they have
been unrealistically low," according to Kevin O'Brien of The St. Paul
Companies the second-largest malpractice underwriter in the country.

Premiums for doctors were "stable" in the 1990s because insurers had
"fat reserves" due to the "booming stock market." With the reserves,
insurers were able to undercut each other to gain market share.
Today, the stock market's decline coupled with increased malpractice
claims has caused insurers to raise malpractice premiums (Rubin, USA
Today, 12/4). Despite rate hikes, St. Paul is considering dropping
medical malpractice insurance altogether to focus on more lucrative
insurance lines. St. Paul already has notified virtually all
customers who are obstetricians, general surgeons or emergency
medicine doctors that it will not renew their policies.

John Schmitt, an obstetrician/gynecologist in Raleigh, N.C. , wrote in
a letter to his state senator that patients will end up paying for the
premium hikes. "It won't be immediately passed on to the patients,
as we are locked into managed care contracts on a fixed payment
schedule. But we will all soon be paying for these increases by way
of higher (health insurance) premiums, out-of-pocket expenses and
deductibles," he wrote. (Rubin, USA Today, 12/4).

Leo Boyle, president of the American Trial Lawyers Association, said
attorneys are not responsible for the premium increases. "The
problem is that, in fact, people are hurt in the course of receiving
medical care," he added (Rubin, USA Today, 12/4).