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Medical malpractice causing doctors to flee Pennsylvania |
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Current state of insurance market leading to high premiums
By KATHRYN HERR Reporting Spring 2004 |
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MIDDLETOWN, Pa. – Pennsylvania is in a state of crisis. The medical malpractice insurance market is causing doctors to leave the state to practice medicine. Fewer local doctors will put Pennsylvania citizens at risk. In attempt to stop the migration of doctors to lower risk states, the state government offered reductions on Mcare payments, which provide for sources of funding for judgments and settlements, for two years. While the reductions will save doctors thousands of dollars, it is only a temporary fix. Governor Rendell is currently working to pass a new bill that will extend the reductions through 2005. It is a common idea that the insurance crisis was caused by the extremely high jury-awarded payments. A long-term solution is a possible cap or limit on how much a jury can award in malpractice lawsuits. The Pennsylvania Medical Society is supporting a constitutional amendment that would put the cap into effect. Others, such as Governor Rendell, are opposing the caps. The Pennsylvania Medical Society Liability Insurance Company (PMSLIC) is the largest writer of medical malpractice insurance policies in Pennsylvania. PMSLIC has been working on improvements for their clients. One thing doctors can do to lower their premiums is to participate in a combination of risk management activities. PMSLIC has been offering this program for the past 10 years to its clients, according to Anna Lavertue, a PMSLIC representative. “Doctors benefit from these activities because they are better prepared and can give better care to their patients and we benefit because the doctors are a lower risk,” said Lavertue. Doctors are required to accumulate continuing medical education credits throughout their careers. Once PMSLIC clients accumulate five CME credits, they are eligible for a discount on their premiums for the following year. James Herr, an Orthotist for Lawalls at Hershey Medical Center, is also required to obtain CME credits. He attends a yearly Orthotics and Prosthetics conference to get his credits. The conference gives information about developments in technology and research advancements within his field. While Herr does not carry his own medical malpractice insurance, his company, which insures him, will likely benefit from the accumulation of credits by its employees. The premiums PMSLIC charges doctors are determined by three factors: specialties of the individual, where he or she practices medicine, and their individual practice history. Specialties are divided into 11 ratings to determine a portion of the premiums. Pennsylvania is divided into five districts, which may lower or raise premiums for doctors depending on where they work. Individual history will affect the premiums much like car insurance premiums are affected by a car accident. According to the Public Citizen Report, 4.7 percent of Pennsylvania’s doctors are responsible for 51.4 percent of malpractice payouts. A study by the Americans for Insurance Reform (AIR) shows another possible reason for the insurance rates to increase rapidly. This study shows that medical malpractice insurance payouts have not flared up at anytime over the past 30 years. Data shows a stable level of payouts since the mid-1980s. According to the findings of the AIR study, the ups and downs of the economy is responsible for the increase of insurance rates. This is a strong contradiction from other studies. The National Practitioner Data Bank shows malpractice payments by physicians to a patients rose 33 percent from 1997 to 2001; an average of 8 percent per year. This figure is based on jury verdicts and settlements. Another study shows a 43 percent increase from 1997 to 2000, an increase of 14 percent per year. AIR blames a “hard” insurance market for the increase. Their data shows that each time the economy is bad, the insurance market hikes up their premiums and cuts coverage so they retain profit. A “soft” insurance market follows when the economy recovers, which allows insurance companies to lower premiums and increase coverage. Pennsylvania’s currently “hard” market should return to normal after the economy bounces back to normal, according to the AIR study. Many people have ideas about what caused the crisis and how to remedy it, but until a remedy is discovered Pennsylvania will remain in a crisis. All stories in this magazine are the intellectual property of the individual authors. You may email comments about this story to: kah928@psu.edu
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