Rising malpractice premiums may force some doctors to stop delivering babies
Dayton Daily News
Miami Valley physicians say rising malpractice premiums soon will force some to make a hard decision – whether to continue delivering babies.
More than 70 obstetricians, gynecologists and midwives who practice in the greater Dayton area said they fear access to health care for women of the Miami Valley could reach a crisis within a year. The doctors have formed a political action committee called Physicians Concerned for the Future of Women’s Health Care of Ohio to appeal to the public to push for litigation reform.
“I have never seen such a unanimous voice among all the obstetricians and gynecologists in the Dayton area,” Dr. Steven Killian said. “We’re standing toe-to-toe on this one. We’re fearful of the future.”
Seasoned physicians are considering early retirement while young doctors are leaving Ohio for other states because of increasing malpractice insurance costs and decreasing health insurance reimbursement fees, Killian said.
But while the doctors urge legislators to limit malpractice liability damages, consumer groups cite considerable evidence that regulating those who sue them instead of those who insure them won’t necessarily control premium costs.
Ohio is typical of what Center for Justice & Democracy executive director Joanne Doroshow called minimal regulation of malpractice insurance. “Insurers have the ability to threaten states by saying they won’t bring rates down or companies will leave the state,” she said.
One obstetrician in the local PAC, who delivers about 30 babies a month along with a midwife, recently received an $110,000 malpractice insurance bill, said Dr. Robert P. Dillaplain of Xenia. Based on UnitedHealthcare reimbursement fees, the doctor has to bring about 74 babies into the world to pay the malpractice insurance.
“If you can’t pay the insurance, you can’t work. If doctors can’t see patients, it becomes an access issue,” he said. “We’re not protesting malpractice insurance. We’re supporting patients’ right to have access to medical care.”
Doctors can’t pass their insurance costs on to consumers because most of their fees are set by health insurance companies, Killian said.
Obstetricians are particularly vulnerable to lawsuits, Dr. William M. McCullough Jr. said. “Doctors who deliver babies are blamed for everything that may have happened to a child before birth,” he said. They can be sued for malpractice until the child turns 20.
Nationwide, the average payout on all medical malpractice cases rose less than 1 percent a year from 1991 through 2000, according to the Center for Justice & Democracy, and doctors in states that have capped liability damages are not paying lower malpractice premiums. In fact, both the American Insurance Association and the American Tort Reform Association have said lower premiums were not the goal of their campaign to restrict liability damages.
“Insurers never promised that tort reform would achieve specific (premium) savings, but rather focused on the benefits of fairness and predictability,” according to the AIA.
The Dayton area obstetricians purchased an ad in today’s Dayton Daily News to inform the public of the danger they perceive. They also plan to hold a day of concern for the future of women’s health care in the Dayton area this summer.
A survey of the physicians in the PAC showed malpractice insurance costs rose 20 to 30 percent in 2000, Dillaplain said. In 2002, the increase skyrocketed between 37 percent to as much as 200 percent, he said. And, projections for 2003 show a 60 percent increase.
“This increase doesn’t seem to have a relationship to claims,” Dillaplain said. “Even doctors who have not had claims filed against them are seeing dramatic increases.”
A 1999 report from the Center for Justice & Democracy found no wide correlation between malpractice insurance prices and the various degrees of liability restrictions passed in 42 states since 1985, the last time the doctors and insurers declared a malpractice crisis.
Even California’s liability-restricting laws of the 1970s apparently have not shielded that state from inflation in malpractice premiums. The Consumer Federation of America found in May that California premiums grew at a higher rate than national averages from 1991 through 2000, although the average California premium remained 8 percent lower than the average national premium.
“California is a failed model for national restrictions being proposed on patients,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights. With damages for “pain and suffering” capped at $250,000, Court said, “only the insurers have gotten rich.”
Malpractice premiums are soaring from Australia to Canada, but the Medical Liability Monitor said Ohio was one of eight states in which premiums increased by at least 30 percent this year. The highest rates are in Cleveland and Akron.
Even in Dr. Warren Muth’s Kettering practice of general surgeons, premiums rose 35 percent this year and 20 percent last year, he said.
Muth blamed declining investment income and underpriced premiums in previous years along with “some crazy suits.” Doroshow agreed on the first two points.
“That’s a very normal strategy that the insurance industry uses,” Doroshow said, “to engage in price wars during good times and then raise premiums when their investment income falls off.”
Nor does she doubt that some insurers are in deep financial trouble, “a normal part of the business cycle.” Several major Ohio malpractice insurers have left the market.
Throughout the industry, malpractice insurers paid out an average of $1.40 last year for every dollar they collected in premiums, the Insurance Information Institute reported in April. The best solution, say industry groups, is state and federal tort reform of restricting liability.
“The runaway litigation system drives up costs without providing real accountability” and “inflicts serious damage on the health system,” president and CEO Karen Ignani of the American Association of Health Plans said. An AAHP study in April blamed litigation for $5 billion, or 7 percent of “new health care costs.”
But the Consumer Federation and Center for Justice & Democracy calculated a $42,607 average for closed malpractice claims in 2000, “including any million-dollar verdicts,” a 9 percent increase from 1991. They said total medical malpractice costs were “an all-time low” 0.55 percent of national health care expenditures.
An oft-cited 43 percent increase in medical malpractice jury awards in 2000 came from Jury Verdict Research, which did not claim to include every award nationwide. Less cited is JVR’s finding that the average out-of-court settlement declined by 16 percent or the National Center for State Courts’ report showing an 18 percent decrease in the number of suits filed from 1996 to 2000.
“We’ve got to push for a long-term fix in Ohio,” said Killian, who has practiced medicine in the Dayton area for about 22 years. “Our main concern is not to moan about the price, but what kind of legacy are we leaving. I’ve seen health care improve every generation in Dayton, but in the last few years it’s begun to decline.”
Killian was “a captive victim,” he said, after his longtime malpractice insurer notified him that it planned to leave the Ohio market. He had 30 days to find a new carrier.
“I still like to deliver babies, and I don’t plan to stop,” Killian said. “If it comes to the point where it costs more to deliver babies than not to deliver babies – then it’s a business decision.”
Physicians in large practices likely will be able to keep their doors open, McCullough said, but rising insurance costs and low reimbursements from insurance companies could impact the quality of care with longer waits for shorter office visits.
“I don’t think the average patient has any idea of some of these things looming on the horizon,” McCullough said.
Patients concerned about quality and wide access to doctors “need to contact their legislator and get something done in Ohio,” he said.
“I can sympathize quite a bit with the doctors that are being price-gouged,” Doroshow said. “Unfortunately, if they think tort reform is the answer to their insurance problems, they’re being misled.”
The solution will be “a combination of things” including “some tort reform,” Muth said. “The response of a lot of physicians has been to reduce their amount of coverage.”
Although hospitals require practicing physicians to carry malpractice insurance, Muth said, “there’s rising sentiment to go without, and what are hospitals going to do if everyone drops it? They need surgeons. I think we’ll see hospitals start to think out of the box in negotiating for groups of physicians.”
Contact Joanne Huist Smith at 225-2362 or by e-mail at [email protected].
Contact Kevin Lamb at 225-2129 or by e-mail at [email protected]