AMA - Excerpts of Reports Received by the American Tort Reform Association on the Crisis in Medical Liability The following excerpts are just a summary of the many reports ATRA has received on the state crisis in medical liability. This crisis is severely impacting both the cost and availability of health care. Medical Liability Costs 57% of medical malpractice premiums goes toward attorneys’ fees, according to the Health Care Liability Alliance. The Charlotte Observer, January 21, 2002. Data compiled by the Physician Insurers Association of America show that nearly 70 percent of all medical malpractice claims result in no payment to plaintiffs. The median cost of defending such a case – one where the jury rules the defendant not guilty – was $66,767 in 2002. The Charlotte Observer, January 21, 2002. To fend off litigation and cope with steep liability premiums, doctors ultimately are being forced to practice defensive medicine. A nationwide study in the Quarterly Journal of Economics found defensive medicine costs an additional $50 billion per year. York Daily Record, January 20, 2002. Nationally, median malpractice jury awards rose from $500,000 in 1995 to $800,000 in 1999, the latest figures available, reports Jury Verdict Research of Horsham, Pa. Malpractice awards rank second to product liability payouts, with median awards of $1.8 million. The Tampa Tribune, December 19, 2001. New York has the highest [medical liability] payouts at $632,996,221. Pennsylvania is the second-worst state in the country for total payouts for medical malpractice. During the fiscal year 2000, combined judgments and settlements in Pennsylvania amounted to $352 million--or nearly 10 percent of the national total. York Daily Record, January 20, 2002. Florida Dr. Oliver Bayouth says managed care chipped away at his medical practice's bottom line for years, paying him less for his services while forcing him to hire expensive office staff to keep up with the voluminous paperwork. Now his medical-malpractice premiums are skyrocketing. The Orlando obstetrician is paying about $100,000 for insurance this year, up at least 25 percent from two years ago. Frustrated, Bayouth says he is thinking about moving his practice out of Florida. Orlando Sentinel, January 20, 2002. In South Florida, where insurers say litigation is the heaviest, obstetricians/gynecologists pay as much as $202,949 a year--the highest rates in the country, according to Medical Liability Monitor, a Chicago-based newsletter. The second-highest premiums are for obstetricians/gynecologists in Houston, Dallas and Galveston, Texas, who pay about $160,746 a year, the newsletter said. Orlando Sentinel, January 20, 2002. Dr. Alan Appley, an Orlando neurosurgeon, moved his practice to Lafayette, La., last year in part to escape Florida's soaring malpractice rates. Orlando Sentinel, January 20, 2002. Dr. Joseph Boyer, an Orlando cardiologist, says his rates rose 64.6 percent, to $99,000, in 2002. Orlando Sentinel, January 20, 2002. Central Florida Cardiothorasic Surgery in Orlando says it will pay about $140,000 to insure two surgeons in 2002, compared with about $54,000 last year. Orlando Sentinel, January 20, 2002. Dr. Alexander Jungreis, an Orlando neurosurgeon, said his liability insurance premiums tripled this year. Orlando Sentinel, January 20, 2002. Dr. Jorge Perez, an Orlando internist, said his insurer canceled his policy last year even though he never had a claim filed against him. His new company is charging him $18,000 per year, compared with the $11,000 he previously paid, on top of a $25,000 fee to cover possible lawsuits from prior incidents. Orlando Sentinel, January 20, 2002. Nationwide, one out of every 12 doctors gets sued each year, while in Florida it's one out of every six, said Bob White, chief operating officer of Jacksonville-based First Professionals Insurance Co., the state's largest provider of medical malpractice insurance with about 33 percent of the market. "Litigation was and always will be the problem in Florida until there are caps on economic damages," said White, whose company raised rates an average of 10.6 percent in 2001 and 27.7 percent this year. Orlando Sentinel, January 20, 2002. Mississippi According to recent reports, from 1999-2000, the number of malpractice lawsuits faced by Mississippi physicians increased 24 percent, with an additional 23 percent increase in the first five months of 2001. Delta Democrat Times, June 24, 2001. 324 Mississippi physicians have stopped delivering babies in the last decade, and only 10 percent of family physicians will deliver a child. Delta Democrat Times, June 24, 2001. The Mississippi Health Care Association, a trade association of nursing homes, says there was a 190 percent increase in the number of lawsuits filed against nursing homes in the state between 1997 and 2001. The Commercial Appeal, January 22, 2002. Ohio In 2001, general internists in Greater Cleveland paid about $16,000, on average, for $3 million worth of coverage, according to Medical Liability Monitor, which follows malpractice issues. Local surgeons paid about $60,000, and obstetricians/gynecologists paid about $58,000 to $95,000. The Plain Dealer, December 22, 2001. Pennsylvania Statistics compiled for the PA Medical Association by Caso Consulting indicate it costs $96,199 to cover an orthopedic surgeon in PA, compared with $37,783 in Delaware and $36,291 in New Jersey. Best’s Insurance News, January 7, 2002. Howard A. Richter, a neurosurgeon and president of the Pennsylvania Medical Society, said a 2001 survey by the medical society showed that 72% of doctors have either deferred the purchase of new medical equipment or haven’t hired needed staff because of "sudden and sharp increases" in insurance rates. Best’s Insurance News, January 21, 2002. To lower their risk and insurance premiums, doctors who normally would take on high-risk medical procedures are opting not to do so. For example, we've seen obstetrician/gynecologists give up delivering babies. Virtually every medical liability insurance carrier increased their rates in recent years. From the beginning of 1997 through September 2001, major liability insurance carriers writing in Pennsylvania increased their overall rates between 80.7 percent and 147.8 percent. York Daily Record, January 20, 2002. Driving premiums through the roof are excessive sums awarded in malpractice suits. According to data from the National Practitioner Databank, medical malpractice payments for physicians in 2000 totaled $3,908,113,303. York Daily Record, January 20, 2002. New York has the highest payouts at $632,996,221. Pennsylvania is the second-worst state in the country for total payouts for medical malpractice. During the fiscal year 2000, combined judgments and settlements in Pennsylvania amounted to $352 million--or nearly 10 percent of the national total. York Daily Record, January 20, 2002. Generous jury awards in the populous southeastern corner of the state are part of the Pennsylvania problem. From January 1994 through August 2001, the median jury award in Philadelphia for a medical malpractice case was $972,909. For the rest of the state, including Pittsburgh, the median was $410,000. York Daily Record, January 20, 2002. Texas Dr. William F. Tucker, an orthopedic surgeon, figured he'd try to curb the cost of his malpractice insurance premium by abandoning spinal surgeries and reducing his emergency room calls. Both decisions cut down on his income but provided him with a greater sense of security as malpractice lawsuits against doctors become more common in Texas and the nation. Then came the shocking news that his premium would rise by 63 percent to $38,000. The Dallas Morning News, January 20, 2002. The problem is particularly acute in Texas, where 51.7 percent of all physicians in 2000 had claims filed against them, according to the Texas Medical Examiners Board. Although no concrete numbers are available as a comparison, several industry experts say the frequency is twice the national average. The Dallas Morning News, January 20, 2002. In Texas, about 85 percent of cases are closed without payment to plaintiff, yet they still cost money to resolve, said Texas Medical Liability Trust president W. Thomas Cotton. The Dallas Morning News, January 20, 2002. Insurance carriers in Texas paid more than $381 million in claims in 2000, according to the Texas Department of Insurance--costs passed on to policyholders. That's an 87 percent increase since 1995. Nationally, the median malpractice award more than doubled from 1994 to 1999, to $800,000, according to the latest figures from Jury Verdict Research in Horsham, Pa. The firm doesn't break the awards down by state. The Dallas Morning News, January 20, 2002. Indeed, claims against physicians have increased in the last decade, though they fluctuate widely from year to year. Patients filed 4,501 claims in 2000, up 51 percent from 1990, according to the Texas Medical Examiners Board. More troublesome is the rise in expenses involved in resolving a case. Each claim cost an average of $68,681 to litigate in 2000, compared with $46,079 in 1995. The figure does not include the amount of settlement or award. The Dallas Morning News, January 20, 2002. Meanwhile, physicians in the Rio Grande Valley are in crisis, said Texas Medical Liability Trust president W. Thomas Cotton. Their premiums are higher than anyone else's in the state, forcing many specialists to change professions. An OB-GYN in North Texas pays $47,500 annually for $500,000 in coverage, while his Rio Grande Valley counterparts pay $82,300. Neurosurgeons pay even higher premiums. The Dallas Morning News, January 20, 2002. Seven in 10 Rio Grande Valley doctors have had medical liability claims filed against them. A February 2001 survey by the Texas Medical Association found that 1 in 3 Valley doctors say their insurance providers have stopped writing liability insurance. The Dallas Morning News, January 20, 2002. In Rio Grande Valley, half of the physicians admitted to being inclined to leave the area or to retire, according to a survey conducted in February 2001 by the Texas Medical Association. Many doctors in the Valley said they profile patients and refuse to treat some, because they fear the patients are prone to sue. They said they deny care for people who pay with cash, because the patients are most likely poor and may look at a lawsuit like a lottery opportunity. Some physicians are even hesitant to respond to a "code blue," which indicates a medical crisis, in a hospital. Dr. Carlos Cardinez, a gastroenterologist in McAllen, said he doesn't want to respond anymore because of the legal uncertainty. The Dallas Morning News, January 20, 2002. Increases in medical practice costs have outstripped revenue increases over the last 10 years, according to the Medical Group Management Association's 2000 cost survey. Operating costs for multispecialty groups went up an average of 35 percent over the past 10 years, while revenue increased 21 percent over that same period. The Dallas Morning News, January 20, 2002. Dr. William F. Tucker, an orthopedic surgeon is trying to make up for the premium rise by recruiting his wife to work the front desk, because he can no longer count on the extra income of spinal surgeries and emergency room shifts. Page Tucker often comes in to work with their 7-month-old daughter. For Dr. Tucker, the $38,000 annual premium represents 11 percent of his operating costs for one year. The Dallas Morning News, January 20, 2002.