Medical Malpractice "Crisis" Contrived

The real crisis is the quality of medical care being given.

According to the June 24, 2002, Wall Street Journal, "Following a cycle that recurs in many parts of the business, a price war [among insurance companies] that began in the early 1990s led insurers to sell malpractice coverage to obstetrician- gynecologists at rates that proved inadequate to cover claims. Some of these carriers had rushed into malpractice coverage, because an accounting practice widely used in the industry made the area seem more profitable in the early 1990s than it really was. A decade of short-sighted price slashing led to industry losses of nearly $3 billion last year.

"I don't like to hear insurance-company executives say it's the tort [injury-law] system -- it's self-inflicted," says Donald J. Zuk, chief executive of Scpie Holdings Inc., a leading malpractice insurer in California. What's more, the litigation statistics most insurers trumpet are incomplete. The statistics come from Jury Verdict Research, a Horsham, Pa., information service, which says its 2,951-case malpractice database has large gaps. It collects award information unsystematically, and it can't say how many cases it misses. Most important, the database excludes victories by doctors and hospitals - verdicts worth zero dollars."

Consumer advocate speaks

Ralph Nader recently wrote that "There is an obligation for the many good doctors to speak out. Just a few weeks ago, nine of the doctors who walked out of Wheeling Hospital in West Virginia, had cost their insurers at least $6.3 million in malpractice claims. Among the damage they caused , wrote the Charleston Gazette, was operating on the wrong knee, causing the need for a liver transplant by leaving a surgical clip on an artery, and causing a massive and fatal infection by inadvertently slicing into a patient's stomach."

"There are serious ethical questions about doctors striking and preventing patients from getting medical care," said Dr. Sidney Wolfe, director of Public Citizen's Health Research Group, which ranks state medical boards annually on how well they discipline doctors. "Doctors should be pressuring medical boards to do a better job of disciplining incompetent doctors."

The whole malpractice insurance premium business amounts to about what this country spends on dog food and is one half of one percent of health care costs in this country. Isn't it about time to focus on malpractice prevention first and foremost, instead of pounding on the rights of hundreds of thousands of Americans who leave their doctors far worse than when they greeted them? "

Joan Claybrook president of Public Citizen stated ""Doctors are falsely demonizing America's legal system rather than saving tens of thousands of lives and litigation costs by preventing careless or unnecessary medical errors, such as operating on the wrong part of the body," and that "Most injured people don't sue. They turn to the courts in egregious situations. Capping damages will only hurt those who have suffered the most. Juries, which hear all the evidence, should decide how much an injured patient deserves, not politicians, who are trying to please their wealthy insurance industry contributors."

While medical costs have increased by 113 percent since 1987, the amount spent on medical malpractice insurance has increased by just 52 percent over that time.

Insurance companies are raising rates because of poor returns on their investments, not because of increased litigation or jury awards, according to J. Robert Hunter, director of insurance for the Consumer Federation of America. Recent premiums were artificially low.
Malpractice insurance costs amount to only 3.2 percent of the average physician's revenues.

Few medical errors ever result in legal claims. Only one malpractice claim is made for every 7.6 hospital injuries, according to a Harvard study. Further, plaintiffs drop 10 times more claims than they pursue, according to Physician Insurer Association of America data.

Just 5.1 percent of doctors account for 54.2 percent of the malpractice payouts, according to data from the National Practitioner Data Bank. Of the 35,000 doctors who have had two or more malpractice payouts since 1990, only 7.6 percent of them have been disciplined. And only 13 percent of doctors with five or more medical malpractice payouts have been disciplined!

What Crisis?

GAO: Malpractice Premium Spikes Don't Force Out Docs

The stories are legion: pregnant women unable to find doctors to deliver their babies because disgruntled obstetricians have closed their practices or retired in droves; white-coated physicians hitting the picket lines and threatening to shut down emergency rooms; desperate patients forced to travel long distances to find a specialist willing to perform lifesaving surgery.
The culprit, according to the American Medical Association (AMA) and President Bush: multimillion-dollar jury awards in malpractice cases that have resulted in insurance premium increases so huge that they are forcing doctors out of business and jeopardizing patients' access to health care.
But a new study by the General Accounting Office (GAO), the investigative arm of Congress, has reached a very different conclusion about the effect of rising malpractice premiums on consumers. Investigators who studied nine states found instances of localized but not widespread problems of access to health care mostly in "scattered, often rural, areas" that have long-standing problems attracting doctors.
And many of those highly publicized accounts of doctors who have retired or moved are, according to the GAO, either "not substantiated," temporary or involved only a few physicians.
In Pennsylvania and West Virginia, for example, two of 19 states designated by the AMA as being in a "full-blown liability crisis," the number of doctors per capita has actually increased in the past six years, according to the GAO.
In Florida, where the state medical society told congressional investigators that all the neurosurgeons in Collier and Lee counties had stopped practicing, the GAO found at least five such specialists at work in each county. Although medical groups have repeatedly warned that doctors are reluctant to come to Florida because of escalating premiums, the GAO found that the number of new medical licenses issued by the state has increased in the past two years.
A study released last week about Maryland, where medical groups have warned about a "crisis" caused by rising malpractice premiums, reached similar conclusions. Researchers from Public Citizen Health Research Group analyzed government data and found that the number of malpractice claims filed per physician declined significantly between 1996 and 2002, as did the amount paid by insurers to cover claims. And while some groups have warned about an "exodus" of physicians, the number of doctors in the state actually increased between 1996 and 2002, according to the advocacy group.
"Every 10 years we hear the same thing: that all the doctors are leaving, that patients can't get care; it's sort of a ritualized dance," said J. Robert Hunter, former federal insurance administrator who is now director of insurance for the Consumer Federation of America, a Washington-based advocacy group.
"And the reason is always the same," added Hunter, who also served as Texas insurance commissioner. "The AMA and insurance companies blame the tort system." Previous malpractice "crises," Hunter said, occurred in 1975 and the mid-1980s and represent cyclical economic fluctuations; the latest downturn was delayed by the sustained economic boom of the 1990s.
"What the latest GAO report shows is that the threat about access to health care is largely overblown," said Maryann Napoli, deputy director of the New York-based Center for Medical Consumers. "It's interesting that [organized medicine] always zeroes in on pregnant women every time there's a so-called crisis.
What Crisis?
"To address the issue, the Bush administration, backed by the AMA and other medical groups, is pushing legislation that would limit the amount of money patients who prove they were injured by substandard care could collect from doctors and hospitals.
In a prepared statement, AMA president Donald J. Palmisano said the report "confirms that America's medical liability crisis is causing access to health care problems in high-risk medical specialties" and noted that in five states "identified by the AMA as liability crisis states, the GAO found health care access problems."
John M. Gibbons, Jr., a Connecticut obstetrician who is president of the American College of Obstetricians and Gynecologists (ACOG), condemned the report as "a sorely superficial analysis of access problems . . . that totally misses the crisis in obstetrics and gynecology." ACOG officials disputed the methodology GAO researchers used.
"I think you just can't discount all of the press reports and information about OB-GYN departures that is coming forward," one ACOG official said.
But anecdotal reports can be misleading, experts say.
Hunter, an actuary, said that he oversaw the production of a study last year for a coalition of 100 consumer groups that tracked 30 years of malpractice payments and insurance premiums. The report concluded that there has been no malpractice "explosion" during the past three decades and that payments have been "extremely stable" since the mid-1980s.
Premiums paid by doctors, Hunter's study found, "do not correspond to increases or decreases in payouts," but "rise and fall in concert with the state of the economy. . . . Insurance companies raise rates when they are seeking ways to make up for declining interest rates and market-based investment losses."
That conclusion is similar to one reached by the GAO in a report released last June. Among the causes of the latest round of malpractice premium increases, the congressional investigators found, were insurers' losses in their investment portfolios, inadequate reserves to pay claims and artificially low rates set during the 1990s when many companies vied to attract policyholders.
Among states and specialties, insurance rates paid by doctors vary tremendously. The GAO found that a large insurance company in Minnesota charged a statewide base rate of $3,803 for an internist and $17,431 for an obstetrician-gynecologist in 2002, an increase of about 2 percent over its 1999 rates. By contrast, a large Florida insurer charged an internist in Dade County a premium of $56,153 and an obstetrician $201,376, increases of 98 percent and 43 percent, respectively, over 1999 rates.
Because reliable national data on malpractice do not exist, congressional investigators studied five states the AMA has deemed as being in the throes of a liability crisis: Florida, Pennsylvania, Nevada, West Virginia and Mississippi. For comparison, researchers also examined four states without reported problems: California, Minnesota, Colorado and Montana.
One GAO finding embraced by the AMA was that "limited available data" indicate that the rise in premiums paid by doctors and in malpractice payments to patients has been slower in states that capped some types of damage awards, a centerpiece of the Bush administration's tort reform proposal. Premiums in states with caps of $250,000 in noneconomic damages, typically known as "pain and suffering," rose by 10 percent in three specialties including obstetrics, compared with a 29 percent increase in states without such laws. The GAO concluded it could not tell whether this difference was "caused by tort reform laws or other factors that influence such differences."
Palmisano pointed to the disparity as confirmation of "what the AMA has long held to be true -- tort reform works."
But while doctors' groups often talk about how ruinous malpractice lawsuits are for physicians, the cover story in the May 23 issue of Medical Economics, a magazine widely read by doctors, had a more reassuring message.
"The vast majority of malpractice claims are dropped by the plaintiff, dismissed by the court for lack of merit, or settled before trial for an amount within the defendant's policy limits," senior editor Berkeley Rice noted. "Of those cases that do go to trial, most end in victories for the defense."
Nationally, studies have found that doctors and hospitals win about 70 percent of cases that make it to a courtroom. Multimillion-dollar awards by juries are often bigger than the amount actually paid by an insurance company or doctor; these awards can be reduced by a judge, overturned on appeal or, more commonly, are the subject of negotiations between lawyers for both sides that dramatically reduce the amount a victim receives.
"What's often lost in this discussion is that there is much more malpractice than there are malpractice suits," Napoli noted. A 1991 study by Harvard University researchers, still regarded as the most influential of its kind, found that acts of medical negligence are eight to 10 times more common than malpractice lawsuits.
source:Sandra G. Boodman Washington Post Staff Writer
Tuesday, September 16, 2003;

10.6 percent of Pennsylvanis’s doctors have paid two or more malpractice awards to patients. These repeat offender doctors are responsible for 84 percent of all payments!see Report

Please see our other pages on this issue:
tort reform or tort deform?
medical malpractice crisis "phony"
contact your Senator or Representative
Medical board criticized for lack of enforcement
medical malpractice insurance fact sheet
Doctor against damages cap
Verdicts not cause of crisis"
Medical Malpractice FAQ's
Medical Malpractice myths and facts
Medical Malpractice Verdicts and tort reform

Tort Reform Links:
Texas Patient Safety Foundation - An excellent med mal resource
Civil Justice Facts - Civil Justice Fact-sheets
Trial Lawyers for Public Justice - Consumer Advocacy Lawers
http://www.votenader.com/issues/tort.html
http://www.centerjd.org/
http://www.atla.org/
http://www.consumerwatchdog.org/insurance/tort.php3
Tort_reform_news.html
http://www.publiccitizen.org/
http://www.consumerwatchdog.org/
GAO Govermant Malpractice Report - see the actual Government findings