Posted on 06/17/2003 4:59:22 AM PDT by RJCogburn
As premiums for medical malpractice insurance continue to rise, more and more physicians are making the decision to "go bare." They're canceling their insurance but are taking other steps necessary to keep their licenses under state law. In the states hardest hit by the malpractice crisis, hospitals and health plans are allowing them to continue practicing, even without insurance.
"We have never required the doctors on our medical staff to truly cover malpractice insurance," says Dr. Mike Pinell, vice president and chief medical informatics officer at Orlando Regional Healthcare, a nonprofit hospital network in central Florida. "But we did require them to meet all the state standards."
In Florida, that means having assets in excess of $250,000, or having a line of credit or other means of acquiring $250,000 in the event of an adverse malpractice judgment. But Orlando Regional has now begun asking physicians which method they intend to use to meet state standards.
The reason for this is that if doctors aren't perceived to have deep pockets, trial lawyers are more likely to aggressively litigate hospitals in malpractice cases. Dr. Pinell calls this a major concern for Orlando Regional.
It wasn't always like this. Dr. Pinell says there used to be about 30 malpractice insurance carriers in the state. "Now it's down to about three or four," he says. "When you're having an ob/gyn, for example, paying $125,000 a year to deliver babies, they will ask themselves, 'Is this the business I want to be in, or do I just want to do gynecology and maybe pay $25,000 or $30,000 per year?'"
In the case of the ob/gyn, the physician would have to make $100,000 a year in obstetrics just to break even with the increased insurance cost. A typical response is simply to elect not to practice a subspecialty like obstetrics if the insurance costs are too high.
The end result is that the public suffers. Dr. Pinell points out that it can take three to four months for a woman in Orlando to get a screening mammogram, because radiologists are electing not to read the results. The problem is not that radiologists aren't qualified, but that reading mammograms will increase their malpractice premiums.
Dr. Pinell also says that many neurosurgeons are electing not to perform risky surgeries to cut back on their premiums. "There's a number of neurosurgeons that are paying up to $175,000 to $200,000 for a $250,000 insurance policy," he says. "Well, that isn't insurance."
Unlike Orlando Regional, Florida Hospital has always required that physicians maintain malpractice insurance. Until recently, that is.
The few remaining carriers in Florida have been increasing premiums and cutting the number of disciplines they insure, according to Dr. Monica Reed, senior medical officer for Florida Hospital. "We were put in a position where we had the majority of our medical staff in various disciplines needing to find malpractice insurance, and some of them, quite frankly, were having difficulty doing that," she says.
Dr. Reed insists that the hospital has never compromised on quality, but had to make allowances for good, qualified physicians who now were unable to purchase insurance. The hospital now allows the state requirements to be sufficient, though the board reviews this decision every six months.
Dr. Reed maintains that lawyers have always regarded hospitals as having deep pockets. "I have yet to see a case where a physician is named and the hospital is not named" in a malpractice suit, she says. But bare doctors give added incentive for lawyers to target the hospital, meaning it will be taking on additional risk.
Since Florida Hospital's policy became effective in January, about 20 physicians out of a staff of 2,000 have elected to go bare. Dr. Reed says they tend to be in general surgery, orthopedics and obstetrics.
Flexible Health Plans
Mohit Ghose, director of public affairs for the American Association of Health Plans, says that malpractice insurance is required for credentialing by most health plans. "But what we have seen recently is that there is a movement in hard-hit areas, like Florida, where health plans are definitely following the letter of the law, but where there has been some flexibility to the physician community, while trying to ensure access for consumers," he says.
In certain parts of the country, health plans are having difficulty obtaining networks of physicians with malpractice coverage. Mr. Ghose says that plans are adapting to the situation on a case-by-case basis.
Three years ago, health plans were already feeling the effects of physician demands for higher compensation. As malpractice insurance premiums rose, the managed-care industry saw skyrocketing insurance rates as threats to their own bottom lines, as the premiums pressed physicians to ask for higher payments.
"Consequently, the consumer has been footing the bill for this," Mr. Ghose argues, pointing to the increased cost of health insurance. "Ultimately, the people who are affected most are the American households."
According to Robert Saner, legal counsel to the Medical Group Management Association and member of the law firm Powers Pyles Sutter and Verville, health plans generally include standard contract clauses requiring a certain amount of malpractice coverage for their network physicians. While they may occasionally waive these clauses, Mr. Saner says it is in a health plan's interest to keep doctors insured.
"It would seem to me that the only thing that would induce a health plan to let a doctor go bare and stay in network is if they absolutely had to have some in-network doctor in that specialty, and there weren't any others to be had," he says.
While in most states, the chances of a patient being able to sue a health plan over malpractice of a network physician are fairly slim, bare doctors still expose health plans to potentially embarrassing situations. If a health plan waives a contract clause, allowing a physician to go bare, and that doctor commits malpractice, leaving the victim without recourse, the health plan could face adverse publicity. This would especially be the case if a patient were left crippled for life or left with some other heart-rending condition.
Mr. Saner points out that some states have limited back-up coverage, often in the form of state pools that make payments to injured patients who otherwise would not have access to compensation. But not all states have such funds, and even in those that do, bare physicians still put patients at risk for not being able to get the compensation they normally might receive.
Group practices, too, are feeling the push to allow their physicians to go bare. Mr. Saner says that most group practices impose upon doctors the obligation to maintain a certain amount of coverage, whether it is purchased individually or through the group. He cautions groups not to attempt to self-insure unless they get professional help in having an actuarial analysis done to see if the risk is worth it.
Still, he says, the current malpractice crisis is leaving groups, as well as hospitals and health plans, little choice if they want to retain certain specialties.
"We're certainly in a cycle now where there's no end in sight with respect to premiums," Mr. Saner says. "If they won't show a little flexibility with respect to this, they won't have certain programs, and those programs are desperately needed."
Offer (1) affordable-health-care-with-no-option-to-sue or (2) the present system, and see how many people select option #2. (I'll take #1.)
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