Malpractice insurance scalds doctors
Dr. Michael Rosenberg, a plastic surgeon based in Mount Kisco and the 2008 president-elect of the Medical Society of the State of New York, pays $65,000 a year in malpractice liability insurance premiums. The doctor, who belongs to an eight-physician reconstructive surgery practice, said the cost of premiums prevents the group from investing in needed expansions and improvements.
“There”™s so much we could do if we didn”™t have to throw away half a million dollars a year,” he said. “We could have the most up-to-date EMR (electronic medical records). We could hire two more nurses.”
As medical malpractice liability premiums continue to soar ”“ last year, Rosenberg”™s rate went up 9 percent; this year the two largest liability insurance carriers are calling for a 16.6 percent and 25 percent additional increases ”“ some physicians are finding it more difficult to maintain their practices. “There are areas of New York state where already you have to travel to see an obstetrician and where the number of neurosurgeons is not optimal,” Rosenberg said, alluding to the specialties that pay the highest premiums. “Access to family practitioners is becoming difficult.”
The highest amounts are for neurosurgeons in Nassau and Suffolk counties, where the annual cost of malpractice liability premiums charged by Medical Liability Mutual Insurance Co. (MLMIC), one of the largest carriers, for exposure of $1.3 million is $256,000, according to MLMIC vice president Edward Amsler. In the lower Hudson Valley, the price of the same coverage is $198,000.
Amsler explained that the medical liability insurance companies are owned by the policy holders and hence are not profit-making entities. “The only driving force is the cost of claims and defending those claims,” he said.
At the same time New York physicians are getting hit with higher premiums, they”™re also receiving lowered reimbursements for Medicaid compared with other states, with a 15 percent drop predicted for next year. “Many physicians are saying, ”˜I can”™t afford to practice anymore,”™” said Rosenberg. “It”™s been in a crisis mode for three years, and it”™s only getting worse.”
The problem is a state tort system gone awry. “New York state does not have any controls on (lawsuit) payments for pain and suffering,” said Amsler. In contrast, California has capped those payments to $256,000, “and physicians pay less than half of what New York physicians pay.” Texas also has a cap, which has resulted in a 30 percent decrease in malpractice liability premiums.
Here in New York, the payment awards, as well as the cost of physicians”™ legal defenses, continue to go up. Amsler said the average closed-claims payment increased from $396,000 to $466,000 in the last five years.
Medical liability rewards have increased by 31 percent between 1999 and 2005 and were expected to be as high as 50 percent between 2005 and 2007, according to Dr. Imtiaz Mallick, who practices internal medicine in Fishkill and is president of the Dutchess County Medical Society.
Mallick said the median liability award in New York went from $1 million to $1.3 million from 2000 to 2005. The average award increased from $6 million to $8 million during the same time period.
There are a number of bills proposed by New York state legislators that would establish caps similar to California”™s and Texas”™, but the possibility of passage is “nil,” due to the trial lawyers”™ powerful lobby, said Amsler.
Doctors are anxiously awaiting this year”™s rate increase, which will be set by the state superintendent of insurance on July 1. It”™s expected that the increase will probably be a bit less than the amount requested by the carriers. In fact, onerous as the premium increases have been, Amsler at MCLMIC said there”™s been “an artificial suppression of rates to prevent a crisis in health care,” with actuarial rates running in the double digits over the past five years, compared with the single-digit rate increases that were levied on policyholders.
If next year”™s proposed hike in premium rates ends up being 16 percent, it would result “in an increase of probably $4,000 a year, over the increment of $3,000 last year, for an internist with 14 years of experience and no malpractice settlements or payout,” said Mallick.
The increasing burden of malpractice liability insurance is causing many young people to decide against a career in the primary-care specialties, he noted. The possibility of being dragged into a malpractice suit is another deterrent. “A lot of people come out of these cases fairly bruised and disenchanted with their calling. You”™re being paraded as a criminal. Some of the antics of the trial lawyers are shady. We are trained to care for the sick, not play the legal game.”
He himself had to stop offering a free clinic he had set up for indigent migrant workers because he couldn”™t get coverage for malpractice liability. “The insurance carriers sent a letter specifying that what I was doing was outside my contract,” he said, noting the perception is that “people without continuous care are the easy guests of trail lawyers. I had to stop it because I had no coverage and was putting myself and family at risk.”
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