High premiums for docs to cut back on purchases
January 1, 2002 3 minutes read
High premiums for docs to cut back on purchases
High malpractice insurance premiums are having a chilling effect on health care, forcing doctors to cut back on necessary supplies and services, according to a survey of Pennsylvania physician practices.
Spurred by skyrocketing malpractice awards, physicians are closing smaller branch offices and cutting back on office staff, says Howard A. Richter, MD, president of the Pennsylvania Medical Society. Patients are feeling the effect in the form of fewer available health care services.
"The soaring cost of liability insurance may be dragging down the availability of health care," Richter says. "Our primary concern is the effect of the malpractice climate on patients’ access to medical care. The quality of our medical resources should not be compromised by unnecessary economic factors and, sadly, that’s what’s beginning to happen."
A recent survey of Pennsylvania Medical Society members backs him up. The response shows that 72% of the doctors said they have deferred buying new equipment or hiring new staff due to sudden increases in their liability costs. To prevent the siphoning of dollars from health care improvements, the Pennsylvania Medical Society made the reform of medical liability laws its top legislative priority for 2001-02.
"We’re working to reform — not abolish — medical liability laws," Richter says. "We support the existence of reasonable laws that protect patients. But abuse of the system with frivolous lawsuits and unreasonable jury verdicts has financially strained the majority of Pennsylvania physicians struggling with outlandish insurance premiums."
High costs in Pennsylvania
Medical liability insurance costs more in Pennsylvania than almost anywhere else in the nation, according to statistics supplied by the medical society. Doctors there pay higher rates by far than their peers in every medical specialty in seven surrounding states. And the rates keep going up. On the heels of a 21% to 60% rate hike for 2001, insurance carriers have requested increases as high as 70% for 2002. Driving premiums through the roof are excessive sums awarded in malpractice suits. Pennsylvania ranks second among states in terms of total payouts for medical litigation. "The numbers are off the charts," Richter says.
Combined judgments and settlements for fiscal year 2000 amounted to $352 million — roughly $30 per state resident and nearly 10% of the U.S. total. To fend off litigation and cope with steep premiums, Richter says doctors are being forced to take these defensive measures:
• They feel pressured to order extra tests that could be expensive or unnecessary.
• Medical practices are discontinuing high-risk services, such as delivering babies. Richter tells of an OB/GYN group where insurance premiums nearly tripled in 2001 to almost $1 million. When two of their seven physicians stopped delivering babies, the rates were cut in half.
• Many medical school graduates are shying away from specialties, like OB/GYN, that are magnets for malpractice suits. The result: fears of a shortage in several specialties and a harder time for patients trying to find needed treatment.
• Some older doctors are throwing up their hands and calling it quits altogether, taking valuable years of medical experience with them.
"It doesn’t take a rocket scientist to see that the malpractice quagmire is bogging down the entire health care system and shortchanging patients," Richter says. "Reforming the liability laws to eliminate frivolous malpractice suits and reduce unrealistic damages will free up funds needed to enhance the healing environment and improve our health care system."
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