Foreign Policy The Statewide Malpractice Strain Just Got Worse

Physicians looking for some good news on the liability insurance front received a double dose of the opposite recently, with the announcements that average premium rates set by ProMutual Group, the state’s largest commercial malpractice insurer, will increase 11.3{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} in July, while the state will lose yet another company offering malpractice coverage, Medical Liability Mutual Insurance Company (MLMIC).

 

The rate increases, expected to take effect July 1 following a review by the state Department of Insurance, follow annual average jumps of 9.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, 14{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, 12.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, and 20{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} over the last four years at ProMutual. And while the 11.3{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} rise is an average rate increase, 68 of 114 specialties will see increases of 15{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} or more.

“The relentless rise of liability premiums is having a huge impact on many levels of health care,” said Alan C. Woodward, M.D., the newly elected president of the Mass. Medical Society (MMS). “It has become a financial burden on many physicians, forcing them out of practice, out of state, into early retirement, and into other careers.”

In addition, Woodward claimed, “it is impeding recruitment and retention of physicians throughout the state, especially at community hospitals. It’s causing shortages of critical specialties, like neurosurgeons. And it’s turning away many bright, young medical students from the critical specialties, and that bodes ill for the future. Patient care and access to care continue to be in increasing jeopardy.”

The situation isn’t helped, he said, by the departure of the MLMIC from the marketplace, which will result in less competition and greater challenges to the viability of physicians’ practices and their ability to deliver patient care.

“The crisis grows daily,” Woodward said, “and the departure of MLMIC only further demonstrates that it has become more severe and more acute.”

Growing Concern

With the latest increase, ProMutual’s medical liability rates for Massachusetts physicians have nearly doubled — an average increase of 99{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, to be exact — since 1998.

According to Robert Suchecki, CEO of Hampden County Physician Associates — a multi-specialty group with 37 physicians and 15 physician assistants and nurse practitioners — the specialties being hit the hardest are some of those experiencing acute shortages across the Commonwealth, including orthopedic surgery, vascular surgery, neurosurgery, emergency medicine, anesthesiology, and gastroenterology.

Ob-gyns and neurosurgeons have already been hit hard over the past few years, he said, with base rates of $97,243 and $90,700, respectively, and some with rates well above $100,000. Meanwhile, orthopedic surgeons face an average base rate of $72,080.

In 2004, diagnostic radiologists (32{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} increase) and neurologists (26{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} increase) will also be especially hard-hit. But physicians in all areas are feeling the pinch and hoping for some change in the tide.

“One of the faint hopes is that legislators will, at least in part, pass some of the pending malpractice reform legislation,” Suchecki said, adding that several factors continue to be debated — and there is some disagreement about who is most at fault. Some attorneys, he explained, say that reform won’t necessarily result in reduced premiums, and insurers are to blame.

But while the debate rages, Suchecki said, physicians, for fear of being sued, are altering or limiting their practices, increasing defensive medicine, or leaving Massachusetts altogether.

“Legislators are struggling with where to set limits on awards in malpractice suits,” he said. “The issues are numerous, but like in many other states where malpractice premiums are lower, we need reform.”

Some relief could be on the horizon in the form of two bills being considered by state lawmakers: H1691, which addresses the looming patient-access issue and asks the Legislature to act quickly to relieve the mounting pressure of rising liability insurance premiums; and H2842, which specifically targets broader tort reform.

Among its provisions, H1691 seeks to:
• Reduce the pre-judgment interest rate from its current 12{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} annually to prevailing market rates. At the moment, plaintiffs receive a 12{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} annual rate on the dollar amount of any judgment, going back to the date of the filing of the claim.
• Eliminate ‘joint and several liability.’ All defendants are now equally responsible to satisfy a judgment, no matter who is principally responsible. The change would mean that each of the defendants would not pay any more than their individual share of responsibility.
• Allow payment of judgments over $50,000 to be made over time rather than in one lump sum.

H2842 takes a slightly different tack, including a provision to impose a firm cap of $500,000 on non-economic damages — commonly known as “pain and suffering” — a move that some have estimated will reduce premium costs by another 12{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}.

Meanwhile, Woodward noted that the Health Act of 2004, recently passed by the U.S. House of Representatives, includes liability reform measures on a national level.

“We are encouraged by the fact that lawmakers on the federal and state levels are listening and acting,” he said. “But we still have a long way to go.”

Seeking Climate Change

Medical leaders are keeping a close watch on efforts such as those for reasons that go far beyond individual physicians’ wallets. For some time, the MMS and other groups have claimed that the liability issue — combined with other strains such as inadequate reimbursement from public and private payers — has contributed to an increasingly unfriendly environment in which to practice medicine.

That, in turn, leads to more severe recruiting problems in medical fields that already face shortages.

To back up that concept, the MMS’ Physician Practice Environment Index, a statistical indicator of factors that shape the overall environment in which physicians work in Massachusetts, has fallen for 10 consecutive years and reached an all-time low in 2003.

“Although Western Mass. is a great place to live and work, we are having severe problems in just getting physicians in certain specialties to commit to an interview or respond to an ad because what they’re focusing on is ‘Massachu-setts,’” Suchecki said. “It’s getting to be like a neon sign — ‘beware, deteriorating health care climate.’”

That climate was not improved by the impending withdrawal of MLMIC, which will force some 1,600 physicians to find another carrier. MLMIC currently insures about 7{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the state’s practicing physicians.

The move leaves ProMutual Group, with 38{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the market, and GE Medical Protective, with 1.3{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, as the only two commercial insurers left in the state. The remaining physicians are covered through what are known as ‘captive’ insurance plans, set up by institutions such as large hospitals or medical groups for their own physicians.

“The exit of MLMIC means less competition in the marketplace, and it means those 1,600 physicians will have few options for coverage that will likely be at higher prices,” Woodward said, adding that most of them will eventually be insured by ProMutual.

“This development, along with physicians facing their fourth consecutive year of double-digit increases from the state’s largest commercial insurer, makes it unmistakably clear that the liability crisis in Massachusetts has two sides — affordability and availability.”

Woodward said the public recognizes the strain physicians are under, citing, a survey reported last month by the McCormack School at the University of Massachusetts/Boston, suggesting that 73{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of Bay State voters believe the issue of medical malpractice insurance continues to be major problem in health care.

“Massachusetts voters clearly believe that medical malpractice costs pose a real threat to the health care system, and the subject is now emerging as a major political issue,” said Lou DiNatale, director of the Center for State and Local Policy at the McCormack School. “The key is that citizens — patients — know how important this is to health care.”

A clear majority of poll respondents believe doctors pay too much for malpractice insurance, think patients bring too many lawsuits against their doctors, and favor a limit on ‘pain and suffering’ awards after patients are compensated for all economic losses resulting from a malpractice case.

The poll also found that 85{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of voters would support legislation that forces physicians to be responsible for damages only according to their individual level of responsibility.

Still, Suchecki said, despite poll numbers like these, patients still don’t grasp how grave the climate has become.

“I do feel that the general public is currently unaware of the severity of this situation,” he said. “Legislators need to get off the debate and act.”

Many are doing just that. But with the latest developments — and the resulting decrease in marketplace competition — the task of reversing recent trends might have become much more difficult.

Much information for this article was obtained from the Mass. Medical Society.