Malpractice Crisis Looms For Area MDs
By George Wallace
Less than a year after New York State raised medical malpractice premiums by 15%, and created a task force to look into nagging problems in financing medical practitioners’ insurance, some doctors in Suffolk County are up in arms about rumors that they may be in for another financial shock this year. Doctors could be hit with as much as a $50,000 surcharge on their practices, and another 10% to 15% increase in premiums this year and in succeeding years, to help plug a persistent gap in monies needed to insure them.
More than 100 physicians attended a meeting of the joint medical staff physicians of John T. Mather Memorial Hospital and St. Charles Hospital in Port Jefferson to discuss the issue recently. Doctors are “concerned that many of them and their colleagues will need to close their doors shortly after this increase occurs and leave their patients without access to care,” according to Dr. Erika Jurasits, who is on staff at Mather Hospital. “Thirty primary care physicians have already left this community, either leaving medicine all together or retiring early,” she said.
In response, a rally is being organized by the Suffolk County Medical Society for March 4 in Albany to raise concerns and to protest, noted Marlene Israel, a spokesperson for Mather Hospital.
“The law requires assigned risk doctors to get insurance somewhere,” explained Joanne Doroshow, executive director of the Center for Justice and Democracy, and a member of the state’s task force. “So, originally, a state fund was set up. But over the years the governors started taking money out of that fund, they disbanded it, and they created a medical malpractice insurance pool so that carriers [insurance companies] could take on responsibility for these doctors. If that money hadn’t been taken from the original state fund, there wouldn’t be much of a problem in this state today – that was the repeated testimony of the carriers before the task force.”
“There is a deficit in the assigned risk pool and a shortfall in the commercial marketplace,” noted Martin Schwartzman, director of policy initiatives for the New York State Insurance Department. “It has happened over time because rates have been suppressed.” The result, he said, is that insurers have lost a significant amount of money, and an increase in premiums is necessary to avoid further financial deterioration of these companies.
Dr. David Kirshy, president of the Suffolk County Medical Society, said he understands the problem of the handful of insurance companies that still do malpractice coverage in New York State – they don’t have enough money to pay claims.
“There used to be a lot of insurers in the state, not just two. The expense and the risk was shared amongst a lot of companies,” he said. “But most of them stopped writing insurance, probably because they couldn’t afford to do it. Now we’re down to the last two covering the risk. One of them – MLMIC [Medical Liability Mutual Insurance Company] – has about 70% of the claims.”
But laying the cost of bailing out the shortfall on the physician committee isn’t the solution, according to Kirshy. “OB-GYNs in this area have stated that they can’t afford any more increases,” he said. “They’ll just have to stop delivering babies altogether. That’s not a threat; they’re just stating facts.”
In July of 2007, NYS Insurance Superintendent Eric Dinallo announced that the state insurance department was imposing a 14% increase to medical malpractice insurance rates, lower than what insurance companies had requested. On the same day as the rate increase, Governor Eliot Spitzer charged Dinallo with heading a new task force to confront the fundamental causes of high medical malpractice costs. The task force, which reported back to the governor at the end of 2007, included New York State Commissioner of Health Dr. Richard Daines, as well as a broad range of representatives from physician and hospital associations, the insurance industry, consumer groups, health plans, trial lawyers and representatives from the state Legislature.
The group was asked to “consider potential solutions to controlling medical malpractice costs, including risk management, legal reform and regulatory changes to foster a stable, competitive environment with financially sound companies – including new entrants into the marketplace – that offer competitive rates to New York’s healthcare providers,” according to a press release from Dinallo’s office.
There are suggestions from state officials that the surcharge and rate increase are only a possibility, and that physicians are reacting to rumor and speculation. But while the findings of the task force have been presented to Spitzer, they have not yet been released.
“I guess he’s looking at it, and we hear he’s going to discuss it in March,” Kirshy said. “But in the meantime, we feel there are solutions to the problem.” Among them are a number of proposals that fall under tort reform. They include a cap of $250,000 on non-economic damages – such as pain and suffering – on personal injury cases; the creation of medical courts, with specialized judges and experts reviewing cases, to weed out frivolous suits and build up expertise and efficiency in case management; Medical Witness Reform, which includes increasing transparency in regard to the identification and credentials of medical witnesses; and an impaired newborn compensation program to find alternative ways to finance claims for perinatal neurological impairment issues.
“Those things weren’t even on the table [during the state task force deliberations],” said Doroshow. “It was clear that they [the tort reform recommendations] don’t do anything to help and rates won’t come down. That was the lesson in everything that we saw in other states.” What will help then? “There are many proposals that were made to deal with the deficit,” she said. “Spread the deficit within the entire property casualty industry – then there would be an infinitesimal increase for policy holders. Another idea is to reinstate the original state funds to handle these doctors and bring some money into the fund. There are myriad ideas, but we think that the one bad idea is the $50,000 surcharge.”
NYS Assemblyman Fred Thiele (R-Bridgehampton) agrees. “A surcharge just treats the symptoms, it doesn’t get to the cause of the problem,” he said. “I think there is a need for tort reform in New York. I’m not saying all the tort proposals are good, but there are a number of frivolous lawsuits out there, and clogging of the courts. All of that drives up insurance costs and at least has to be looked at.”
Also opposed to the surcharge proposal is NYS Assemblyman Marc Alessi (D-Wading River), but he wonders if it might be possible to focus more on the doctors with repeated claims. “They’re the ones we should go after with rates,” he said.
State Assemblywoman Pat Eddington (WF-Medford) agrees. “The first thing we have to do is look at malpractice,” she said. “It’s soaring, but you need it because there’s a lot of damage done. Some of these doctors can make mistakes and they can walk away from it. The family is left to deal with a damaged child for the rest of their lives.” As for physicians leaving the business? “According to the trial lawyers, malpractice rates don’t cause that to happen,” Eddington argued. “Fifty thousand dollars more won’t stop people from becoming doctors, or cause them to leave.”
But Senator John Flanagan (R-Smithtown), who serves on the state Senate’s Insurance Committee, says that a balanced approach – and a quick one – is what is needed now. “Should we go after bad doctors? Should there be tort reform? I feel it has to be a combination of things,” he said, “and it will take compromise.”
But his more immediate point is that the state has to act quickly on the issue. “The short-term problem has to be fixed right away, and I think the state has to put $50 million to $60 million in to stave off the problem,” said Flanagan. “The long-term solution needs to be vetted and implemented sometime this year. We are definitely in a crisis right now, and I don’t think we have a choice. This resembles a pressure cooker – it’s been building up over time and when it blows, it’s not going to be pretty.”