A Call to Break Medical's Wall of Silence
By MARY JO LAYTON and BENJAMIN LESSER
STAFF WRITERS
Monday, August 4, 2003
Dr. John Poole's malpractice insurance bill increased $216,000 this year for his
five-physician practice, despite no change in their claims history, he said. That's
more than his parents paid for their house.
Outraged, the 47-year-old Holy Name Hospital surgeon helped lead thousands of
angry New Jersey doctors this year from the steps of the State House to the governor's mansion to press for limits on patients' awards.
The fallout from skyrocketing malpractice costs is monumental. Some physicians
have abandoned New Jersey practices, patients have been forced to reschedule routine care, and key insurance companies are on the ropes and
might need the help of New Jersey taxpayers.
It's a nagging migraine in need of a strong prescription.
But even Poole acknowledges the tort reform that doctors endorse - "caps" on
pain-and-suffering awards - is only part of the remedy.
If physicians aren't willing to break the so-called "white wall of silence" and report
their troubled brethren, the better doctors will continue to subsidize the physicians
who pay out numerous claims, the doctor said.
"You can't have it both ways," Poole said. "Why should I be paying someone
else's premium?"
On Sunday, The Record reported that state regulators are reluctant to investigate
physicians, even those with multiple malpractice payments, and consumers have little access to information about a doctor's past. In addition,
lawsuits are settled with no finding of fault and non-disclosure agreements.
The result is a system that makes it hard for patients to come to informed choices
about their physicians. And a small but unknown percentage of problem physicians remain in practice, adding to rising insurance costs and
medical errors.
With premiums increasing so dramatically - more than 40 percent in just six
months for many doctors - more physicians should share Poole's concerns, experts say.
Jonathan Turley, a professor at George Washington University, notes that 5
percent of doctors in the United States are responsible for more than half of the
malpractice tab. Some of those doctors may be unlucky, but the bad physicians among that group, he said, are often protected by their colleagues, ignored by
regulators, and driving up costs for all.
"An effort at self-policing could have a significant effect on insurance rates," Turley
said.
Armand Grasso is a doctor whom trial attorneys derisively call a "frequent flier" for
his multiple malpractice suits. His insurers paid out $2.5 million in six cases -
mostly settlements, court records show - and Grasso was disciplined by the state
Board of Medical Examiners just a year ago. But he is returning to practice after a
one-year suspension.
All told, 282 New Jersey doctors have paid out four or more claims since 1990,
according to the National Practitioner Data Bank, a registry set up by the federal
government to track malpractice payments. Their insurers have paid out roughly $300 million, or 16 percent of New Jersey's tab, in that time.
Physicians, however, would prefer to talk about the other data, the numbers that
indicate that "caps" on jury awards are the signature solution: Median malpractice
payouts in New Jersey have more than doubled since 1991, many suits are deemed baseless, and insurance companies spend an average of $30,000
defending physicians in lawsuits.
Limit the awards for pain-and-suffering to $250,000 or so, doctors say, and lawyers
will lose their desire to pursue a jackpot verdict. In states where caps are in effect,
doctors are insulated from the premium increases that are pounding New Jersey physicians, organized medicine says.
A favorite reference point is California's sweeping Medical Injury Compensation
Reform Act (MICRA), which President Bush has endorsed for the nation. The plan includes limits on jury awards and attorneys' compensation.
With so much at stake, patients will lose access to providers if drastic action isn't taken, said Dr.
Mark T. Olesnicky, president of the Medical Society of New Jersey.
"Anybody has to realize that the medical malpractice insurance industry is in deep
crisis," Olesnicky said. "We are fighting for the life of our profession."
Critics of caps, however, say they unfairly punish the elderly and the young,
groups that typically have no wages to be compensated for and would win only their medical expenses. Those critics also warn that caps may save
insurers money, but doctors won't necessarily see those savings.
One thing is clear: Doctors aren't backing down. Poole, and thousands of his
colleagues, insist they are walking off the job Oct. 7, and staying out until the
state Legislature passes reforms, which stalled this year.
"The doctors have negotiated and compromised; now we want solutions or we're
not coming back," Poole said.
A looming doctor's strike isn't the only bad news for a state already weathering a
malpractice firestorm.
Princeton Insurance Co. announced that it will stop writing new policies this
month, because it can't buy the reinsurance it needs to cover high payouts. The fallout was immediate: The state will conduct hearings, and there's
talk of reactivating a state insurance pool for malpractice companies, a strategy that
during an earlier malpractice meltdown left New Jersey with a $64 million debt.
Experts say this is yet another compelling reason to alter the lax approach to
policing problem physicians. Their disproportionate impact on insurance bills is
evident.
Unlike car insurance, in which policyholders are rated individually, doctors' policies
are grouped into a handful of tiers based on their specialty, as well as their claims
history. As rates go up, even the best doctors pay more.
This crude approach allows the most negligent doctors to pass along some of the
cost of malpractice to every other physician, Turley said. He has urged Congress
to impose a more equitable, individual rating system.
"The whole purpose of individualized liability is to effectively price the most
negligent doctors out of the market," he said. "Hundreds of doctors could not continue to practice, given their malpractice history. That would be a very
good thing."
Jay Angoff, deputy insurance commissioner in the Florio administration, agrees
that doctors with multiple claims unfairly push up rates for all. Too often, the best
doctors don't get meaningful discounts for clean records, he said.
At the same time, those with the most claims may pay surcharges, but those
extra premiums don't cover the true cost of their malpractice, said Angoff, who also
served as Missouri's insurance commissioner.
Princeton Insurance Co., which insures more than half of New Jersey's doctors,
assesses 7 percent of its policyholders surcharges of 50 percent to 250 percent of
the standard rate, said Lois Hogya, vice president of underwriting. These physicians aren't necessarily bad doctors, she said. "They could be a very good
doctor with a bad outcome because of a sympathetic jury."
In most states, the largest insurance companies are owned by physicians, who
are reluctant to impose legitimate surcharges because they see frequently sued doctors as victims of frivolous litigation, Angoff said.
Malpractice victims certainly don't see it that way.
Janet Iorio was one of six patients who have successfully sued Armand
Grasso, the Ridgewood obstetrician who is returning to practice.
Iorio said she tried for 12 years to get the state to sanction the doctor, whom Iorio
blames for paralyzing her daughter, Alyssa, in a botched forceps delivery. Iorio
received a $4 million malpractice settlement years ago, with Grasso's insurance paying $1 million. Alyssa has never taken her own breath or walked a step. If
regulators won't put Grasso out of business, Iorio asks, shouldn't insurers?
"Insurance companies are talking about their payments getting so high, so why
take on someone like [Grasso] who is such a high-risk person?" she asked.
Grasso's attorney insists his client has done nothing wrong.
Risky physicians often turn to the insurers of last resort who charge as much as
four times a typical rate. States are seeing more doctors go to these "surplus" carriers.
In 1998, premiums paid to insure these risky physicians accounted for 4 percent to
5 percent of total premium dollars. Today, that percentage has nearly doubled, said Mary Cozzolino, spokeswoman for the state Department
of Banking and Insurance.
The state recently helped nearly 50 doctors obtain policies despite their claims
history. The doctors who benefited from the state's assistance include two obstetricians with a combined 28 claims, who paid out nearly $1 million, as
well as a cardiac group of four surgeons that was sued 19 times, paying out $6.85 million,
according to a state report.
In only one case was the state unable to obtain an insurance quote. That involved
a cardiologist who was under review by the state medical board, Cozzolino said.
It's not the first time regulators have had to come to the aid of doctors.
New Jersey weathered malpractice crises in the 1970s and 1980s, and many of the economic forces - forces unrelated to medicine - that pushed up costs
are still at work. Plummeting investment income has forced insurance companies to
ratchet up rates.
Carriers who aggressively underpriced their policies to attract business in the late
1990s are now playing catch-up, increasing premiums sharply. There also are fewer companies writing policies in New Jersey, a factor squeezing the
marketplace further.
Moreover, in recent years, it's been much harder for doctors to pass on higher
insurance costs to patients, because reimbursements are limited by managed-care companies, as well as Medicare and Medicaid.
"In New Jersey, doctors have been able to get insurance," Cozzolino said. "The
problem arises in certain high-risk specialties where they're unable to afford the
policy or don't want to pay it."
Obstetricians, in particular, "are not being compensated at a level to afford to pay
the premiums they're quoted," she said.
New Jersey is not the only state where doctors are scrambling.
Dr. Gregory Przybylski, now a neurosurgeon at JFK Medical Center in Edison and
a professor at Seton Hall University, once practiced in Philadelphia but said he had
to leave after his rates went from $75,000 to $250,000 in a single year.
In January 2003, Przybylski was one of a handful of physicians who met with Bush
to discuss the malpractice insurance crisis and ways to solve it - an effort that will
no doubt dominate New Jersey's legislative calendar in the fall.
Przybylski said that after he left Philadelphia, the city had only one neurosurgeon
qualified to perform the spinal reconstruction surgery that he specializes in.
"I had patients driving to Chicago to see me," he said.
E-mail: layton@northjersey.com
and lesser@northjersey.com