Our Malpractice Crisis

On April 30, 2003, our malpractice insurer notified us that because we have been named in 9 malpractice suits in the past 10 years, without any settlements or awards, that our insurance would not be renewed. Not even at higher 'rated' premiums.

Our premiums for the past 5 years

Average Premium per Doctor = $27,400

We are now seeking affordable malpractice insurance. One may not practice medicine in Pennsylvania without malpractice insurance.

PA is one of the worst states for malpractice premiums.

Malpractice Problem

Currently, many states in our nation including West Virginia, Mississippi, Nevada and New Jersey have had significant crises related to the rising cost of malpractice insurance. However, Pennsylvania ranks as the worst.

Supreme Court of Pa determined that only the Judiciary, not the General Assembly could, enact this type of reform

In 1996 tort reform was passed by the PA General Assembly and signed by the Governor. Unfortunately, the PA Supreme Court overturned this legislation. The Supreme Court determined that the General Assembly did not have the authority to enact this legislation; therefore, it was not enacted. The Supreme Court did not determine that the legislation itself was unconstitutional. If that legislation had been enacted in 1996, the current problem would be significantly less severe.

Insurers have left PA.

Scope of the problem:

The vast majority of malpractice (professional liability) insurance carriers have found PA an unfavorable and unprofitable place to do business and have stopped issuing policies in Pennsylvania over the past several years

Only 2 insurers are left and only one can offer new policies.

Currently, there are only 2 major commercial insurers left in the state (PIMSLIC and Medical Protective). At this time, only Medical Protective can offer new policies. In addition, there is the JUA (Joint Underwriting Association), which is the state-run insurance company of last resort for those physicians who cannot obtain commercial malpractice insurance. There are a few new companies of a different type known as "risk retention groups" which require physicians to pay a substantial amount of cash to the companies' reserves in order to have the company offer them insurance. In addition to the premium the physician’s personal estate is at risk for awards – a risk many physicians find unacceptable.

PA insurers require high premiums for malpractice insurance but award the lowest payments to physicians for their services.

For those who have been able to have their malpractice insurance renewed, the premium has been going up as much as 100%/year. In other businesses, one can increase the charge for a product or service to offset this increased overhead. However, in our region, physicians are locked in to reimbursement based on whatever the insurer’s fee schedule pays; in that regard, Southeastern PA has one of the worst payment systems for physicians in the country as well.

Because of high malpractice situation, insurance costs and very low insurance payments, many physicians are leaving the state, retiring early and/or cutting back on services such as OB/GYN’s not delivering babies.

Facts about physicians leaving, retiring, etc.

High-risk specialists—Neurosurgeons, obstetricians, orthopedic surgeons, for example, are leaving the fastest. Even worse is the fact that the number of young doctors coming to Pennsylvania—and staying here—is falling even faster.

Under age 35

1989	200
12%	4.7%

In 1989, about 12 percent of all Pennsylvania doctors were under age 35.

By 2000, only 4.7 percent of our doctors were under age 35.

12th to

41st

Nationally, Pennsylvania has gone from being 12th among all states in the proportion of young physicians to being 41st.

Here at Abington, 2 neurosurgeons have left the state in the past 3 years because of the cost of malpractice insurance

24 Abington Memorial Hospital Specialists did not have their insurance renewed.

While this previously had been more of a problem for the high-risk specialists, the problem is now become more widespread. Our group of 10 pulmonologists in addition to 9 cardiologists, and 4 infectious disease specialists here at Abington were notified 3 weeks ago that our insurance would not be renewed after 6/30 of this year. We are currently looking at our options for insurance coverage – options which are few!

Even Lloyds of London will not insure PA.

A few other facts:

o 100 physicians are leaving the state per month

o There are 3 (soon to be 2) orthopedists in the state under age 35.

o Lloyds of London lists 3 places in the world it will not insure: Slovakia, Bosnia and Pennsylvania.

Access to care will be affected

What does this mean to you?

1. As more physicians leave the state, your access to quality health care will be affected. We saw an example of this in December of last year when the trauma center closed for 13 days because surgeons could not obtain malpractice insurance.

Quality of care will be affected.

2. As doctors leave and are not replaced the quality of care will be affected

Money drained from health care goes mostly to lawyers

3. Money that could be used for new equipment and research is going into the legal system for multimillion-dollar awards. Surprisingly, much of this money does not go to the plaintiff but instead goes to the attorneys.

We need caps on “non-economic” damages!

What needs to be done?

We need caps on “non-economic” damages! "Non-economic damages" refers to the “pain & suffering” payments and has no bearing on damages for medical costs or inability to work, etc. Because of the “runaway” jury awards (up to $100 million), insurance companies can’t estimate what their risks will be and are unwilling to write insurance in Pennsylvania. Caps will require an amendment to the state constitution, and legislation is currently coming up for vote.

Injured parties should receive the bulk of the awards

Patients who are injured should receive the majority of the award instead of the large proportion now that goes towards legal fees. The lawyer’s contingency fee must be limited.

There must be a scientific approach to patient safety in a "blame-free" environment.

Comprehensive plans for patient safety need to include a “blame free environment” so near misses, errors, and bad outcomes can be evaluated scientifically and with the intent of quality improvement.

These are complex times. There are limited resources. We must work together to maintain the high standards that we expect for one another. Please let us work together to improve the future.