July 17, 2002
Liability costs drive doctors from practice
Record insurance premiums force shutdowns of
health facilities from West Virginia to Nevada.
By Steve Friess
Special to The Christian Science Monitor
LAS VEGAS – Shelby Wilbourn, a doctor, left his
office here last Thursday afternoon, spent the evening packing
his belongings, and then fled about as far as he could from
Nevada – to a town in coastal Maine. For good.
Dr. Wilbourn, like at least a dozen other local
obstetricians, has been turning pregnant women away for months.
The reason: punishingly high insurance rates. He was facing
a medical-malpractice premium of $108,000, up from $33,000 last
year. In Maine, he'll pay $9,800.
"If things don't work out in Maine, this is the last place
I'd come back to," says Wilbourn, who has never been sued.
Wilbourn's abrupt departure is symbolic of a growing revolt
by thousands of doctors across the country. Beset by record
premiums, they are opting to quit, move, or scale back their
practices. The result is a budding healthcare crisis from West
Virginia to Nevada. "It is a dire situation that is coming to
a head now and needs to be resolved," says Carol Golin, editor
of the Medical Liability Monitor, an insurance-industry watchdog
newsletter.
True, doctors have been complaining about malpractice rates
as long as they have about bad tee times. But the issue is quickly
taking on national significance as the number of affected physicians
– many of them obstetricians, surgeons, and emergency-room staff
– grows by the day.
For example:
- More than 80 percent of the orthopedic surgeons in Pennsylvania
said in a recent poll that they are considering leaving the
state to find cheaper insurance.
- The maternity ward of tiny Bisbee, Ariz., which last year
delivered about 275 babies, shut down completely earlier this
year.
- No neurosurgeons in Wheeling, W.Va., are practicing anymore,
forcing many people with traumatic injuries to receive treatment
out of state.
- Fear of malpractice lawsuits has some insurance carriers
urging their Mississippi doctors to stop giving free physicals
to student athletes. Some free sessions have already been
canceled.
Behind the crisis is a decision by the nation's second-largest
underwriter to stop selling malpractice insurance and the proclivity
of Americans to sue doctors.
"People think they can hit a jackpot in the liability lottery,"
says Donald Palmisano, president-elect of the American Medical
Association (AMA). "All sorts of cases with no merit are being
filed, and it costs money to defend against those cases."
12,000 doctors written off
Citing $1 billion in losses last year because of more multimillion-dollar
judgments and a flagging economy, the St. Paul Cos. announced
in December it would stop writing malpractice insurance policies
for the 12,000 physicians it covered.
The decision sent doctors scurrying for other coverage, only
to find that remaining companies demanded as much as a 300 percent
hike in insurance premiums. For certain specialties that are
more common targets of lawsuits – such as obstetrics – insurers
wouldn't write policies at all.
Las Vegas emerged as the national focal point for the problem
on July 3, when the only trauma center in the area, which
serves a 10,000-square-mile region, closed because several surgeons
quit. The center reopened last weekend after enough doctors
agreed that Clark County, which includes Las Vegas, would hire
them, thus placing the doctors under a special $50,000 malpractice
liability cap.
"There are factors operating, particularly in Nevada, which
make it a prime example of the problems physicians, hospitals,
malpractice insurers, and patients are facing nationwide," says
Ms. Golin.
Nevada's legislature is expecting to convene a special session
later this month to address limits on jury awards in malpractice
lawsuits, as well as the statutes of limitations for such cases.
Congress is considering similar measures, as are other state
legislatures.
Some states, however, already have strictures in place that
were hammered out well before the current crisis. In California,
for example, juries can't award more than $250,000 for pain
and suffering. State law also caps the percentage that lawyers
can take from the judgments and shortens the statutes of limitations
to hasten the litigation process.
The insurers still in the medical-malpractice field offer
significantly lower rates to doctors in California, as well
as in other states with similar legislation.
"The symbol and standard was set by California," says Ikram
Khan, who sits on a task force convened by Nevada Gov. Kenny
Guinn to study solutions in advance of the special session.
"Caps vary from state to state, but all the available studies
show that they are effective in lowering premiums in the long
run."
It also may lower the cost of healthcare in general, according
to a 1996 Stanford University study. The researchers found that
hospitals spent 5 percent less on heart-disease patients in
states with jury caps, yet saw no difference in health results.
That led to the conclusion that a fear of being sued drove some
doctors to order more tests and treatments than necessary to
protect themselves from liability.
The trial lawyers' defense
Trial lawyers have thus far taken a public-relations beating,
being pegged as greedy opportunists. But they're about to mount
a defense, with lawyer groups like Citizens for Justice in Nevada
planning to air TV commercials that urge the public to oppose
jury caps. Their take: Insurance companies kept rates too low
during the '90s in an attempt to be competitive, and now, as
their investments lose value on the stock market, they're inflating
premium prices. Trial lawyers also accuse doctors of scaring
the public into giving away its ability to punish malpractice.
"The insurance companies created the problem, they exacerbated
the problem by writing policies for bad doctors, and then, when
the consequences of their actions became known, they leave the
market and the physicians holding the bag," says former Nevada
Trial Lawyers Association president Bill Bradley, who insists
there's no correlation between jury awards and malpractice insurance
rates. "To place the blame on the civil-justice system is not
fair or accurate. This is not a war between lawyers and physicians."
But to many physicians, it is war indeed. The AMA is mounting
a multimillion-dollar fund to "educate the public" about their
position, and doctors in several states have staged protests.
"It's completely weird for physicians to be doing this," says
Weldon Havins, CEO and special counsel for the Clark County
Medical Society in Nevada. "Doctors are competing with lawyers
who have, from their first day of law school, been trained and
are aware of the political process and the importance of law.
Doctors have absolutely zero training with that. It's a baby
racing with an Olympic athlete."
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