CJ&D in the News
Great Falls Tribune (Great Falls, MT)
June 17, 2003 Tuesday
Malpractice insurance woes threaten doctors
By: Richard Ecke, Staff
Dr. Bill Bloemendaal knew treating the injured girl would be difficult.
The teen's elbow was shattered in an auto accident, and the orthopedic surgeon worked painstakingly to repair it. Bloemendaal believes he did a good repair job
under difficult circumstances, a view later reinforced by other physicians who examined the case.
"I didn't do anything wrong," he said. Yet the girl's family sued.
Malpractice insurance is an increasing headache for physicians as costs rise
and some states face crises. Doctors in states like West Virginia and Nevada have threatened to leave those states unless their
legislatures put the brakes on awards to injured people by trial juries.
Montana has a $250,000 cap on jury awards in malpractice cases.
A move is afoot in Congress to protect physicians by setting a similar $250,000 federal cap.
Trial lawyers and some consumer groups are lined up on the opposite side, pointing to dramatic cases of
negligence. One leading opponent of damage award caps, the Center for Justice and Democracy in New
York City, claims doctors are "hypocrites" for urging caps to protect themselves
while filing lawsuits for their own purposes.
"When an HMO, a health insurer or even an auto insurance company has treated
doctors unfairly, these doctors gostraight to court," claims a June 2 "mythbuster" from the group.
Entering the fray this month is a Florida financial rating service, Weiss Ratings Inc., urging legislators to place all
cap proposals on hold until the reasons for soaring malpractice insurance costs are examined.
Montana different. Lawsuits against physicians are unusual in Montana.
Part of that is due to a panel, made up of doctors and lawyers, that reviews
malpractice complaints before they canbe filed in state district court.
A few years ago, Bloemendaal's case went to the Montana Medical Legal Panel,
which found in his favor. The family still threatened to go to court, and mounting a defense would have been costly.
Bloemendaal agreed to settle, but now has second thoughts.
"Many times I think about that case. I'm sorry I settled it, because I didn't
do anything wrong," he said.
A number of cases get settled without ever coming into public view. A few
reach district court and may take several years to resolve. Even if the case is dismissed, it is expensive to defend oneself.
Bloemendaal said he could not have refused to treat the teen at the Benefis Emergency Center, even though he
knew the family might not be happy with the repair to the smashed elbow.
"You had to take care of it," he said.
Statistics from the Montana Medical Legal Panel's 2003 annual report showed a
declining number of paid claims against doctors from 1999 to 2001. Paid claims numbered 93 in 1999, 67 in 2000 and 69 in 2001.
Even so, money collected in the state from physicians' insurance companies was hardly chump change. Injured
patients received a median payment of $100,000 in 2002 in Montana, according to Weiss. That's
$50,000 less than the median payment in states without caps.
Not satisfied
Part of the malpractice problem is great expectations on the part of patients, who think doctors and hospitals ought
to be able to patch people up and make them nearly as good as new, said Wayne Dunn, chief financial officer
for Benefis Healthcare.
"They expect to be totally fixed and made whole," he said. "Sometimes you may
get better but you don't get totally better. There's a difference between outcome and negligence."
Unfair lawsuits help push up the costs of insurance coverage.
Benefis is part of Providence Services, a Northwest group that buys insurance
coverage for its member hospitals. About one-fifth of the total covers Benefits.
Dunn said Benefis' malpractice costs are soaring. Malpractice insurance will
cost the Great Falls hospital about $1.5 million this year, compared with $500,000 two years ago.
"That's a million-dollar increase to us," he said. And when the hospital only
makes a profit of $3 million or $4 million per year, that keeps the hospital from spending the money on new technology and
other things. Consumers end up holding the bag.
"Our patients are basically paying about $6 a day just to recoup our malpractice insurance," Dunn said.
Then there's the other side of the story, cases of egregious medical neglect.
The Center for Justice and Democracy cites the case of Sherry Keller of Conyers,
Ga., who was recovering from a hysterectomy when her doctor yanked on a wound, causing the poorly sutured skin to pop open from
hip to hip.
The doctor left her alone, and Keller went into shock, fell off the table and
broke her neck as she hit the floor. Now a quadriplegic, Keller testified before
the House Judiciary Committee, opposing strict caps on damage awards.
The emotional issue of capping malpractice awards may be heard this summer. Whether federal caps will be
enacted remains to be seen.
Who's to blame?
If high jury awards prompt malpractice worries for doctors, why are insurance
companies sharply raising rates even in states with strict caps on noneconomic damages, such as Montana, which features a
$250,000 lid?
"Tort reform has failed to address the problem of surging medical malpractice
premiums, despite the fact that insurers have benefitted from a slowdown in the growth of claims," said Martin D. Weiss, chairman
of Weiss Ratings Inc.
Weiss cited six factors other that court cases affecting the big jump in insurance premiums:
* Medical inflation in general. Costs are up 75 percent since 1991.
* Investment woes. Once the stock-market plunged, insurance companies raised
premiums to compensate.
* Low reserves. Since 1997, medical insurers had inadequate reserves. Now, they're hiking premiums to boost
reserves.
* Insurance business cycle. The 1990s were a boom period; the 2000s are a bust so far.
* Financial safety. More than a third of medical malpractice insurers are on
shaky financial ground, compared with 23.9 percent of the property and casualty industry as a whole. These companies may want to
raise rates to stay viable.
* Supply and demand. The number of medical malpractice insurers numbered 274
in 1997, but dropped to 247 last year.
Weiss argued caps are failing to achieve their intended purpose of putting the brakes on malpractice rates. He took
insurance companies to task for sloppy planning, and suggested the medical profession
police itself better.
What's next?
Even supporters of federal caps agree Montana already has a strong law. But that doesn't mean Montana and its
courts are always friendly to physicians, according to Gary L. Morse of Seattle, general
counsel for Physicians Insurance Cos., which insures hospitals including Benefis
Healthcare.
"There are serious problems in the legal system in this state," Morse said. Insurance officials are frustrated with
Montana, he said, in part due to fears that a liberal Montana Supreme Court might not
back insurance companies in a showdown over the state's caps.
Morse said Montana is on a list of 18 states that could be facing a malpractice crisis.
Dunn said about the only apparent effect of malpractice costs in Montana has
been physicians, both family doctors and obstetricians-gynecologists, getting out of the business of delivering babies.
Problems delivering a baby can lead to lawsuits, making baby delivery one of
the most expensive specialties for getting insurance.