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In February 2003, many New Jersey doctors temporarily shut their doors to protest the rising cost of medical malpractice insurance in their state. Under the direction of organized physicians’ groups, the doctors ceased routine check-ups and elective surgery for up to a week and protested at the state capital to have a limit placed on damages for pain and suffering. The walkout was called off after several days, although the physicians retained the option to resume such actions in the future.

This is a dramatic example of how strongly doctors feel they are being affected by changes occurring in the malpractice insurance business. But rising premiums are only part of the problem – there are implications for the entire healthcare delivery system that are not showing up on the evening news. For example, medical school faculties are facing staff reductions because of the substantial increase in the cost of insuring part-time clinicians. The bottom-line of this move: Students may no longer have the benefit of clinician researchers as their bedside teachers. Another example: Some states have had a perilous drop in sheer numbers of practitioners, particularly those in certain specialties, such as obstetrics, orthopedics, and trauma due to the loss of malpractice coverage.

These days, even getting malpractice insurance isn't easy because some large, nationwide insurers have left the business altogether, advising physicians that they will no longer cover them. One of these insurers, the St. Paul Company, is the nation's second-largest and most prominent insurer. This has led to the type of situation that currently exists in New Jersey and many other states, where malpractice insurance is so expensive and difficult to get that the medical practitioner is finding it virtually impossible to sustain the skyrocketing costs. In Pennsylvania, for instance, rates have increased by nearly 100 percent. Physicians have even moved away from states where such high rates make it impractical to practice medicine.

Insurance companies say they have been forced to take these steps as the result of two blows – the aftermath of 9/11, which caused insurance payouts to rise, and the economic downturn, including the stock market collapse, which made their investments less profitable. In some settings, there has indeed been a rise in the trend toward adverse judgments, a reflection of the sophistication of legal arguments that look at long-standing costs for an individual's care and loss of productivity. Juries have also changed their attitudes about culpability and blame. Even though most actions do not end in a jury decision, the impact of this inflation of expectation about settlements has led to a greater number of higher settlements. Jury verdicts in the United States rose, on average, from about $425,000 in 1996 to about $1 million in 2000. Thus, those insurers who continue to provide malpractice insurance have raised their rates – substantially in some specialties – to cover these increased jury awards.

The remedy sought by the New Jersey physicians – placing a limitation on awards for pain and suffering – would ameliorate only one element of a settlement. Costs for long-term medical care, actual loss of wages, etc. would be unchanged by this type of limitation. The concept of "tort reform," which requires changes in state legislation, thus has become a rallying cry as a way to improve the situation.

The current climate that increases doctors' liability burden comes at the same time as there is greater focus on patient safety. In a landmark report four years ago, the Institute of Medicine highlighted the fact that with more than 98,000 deaths annually attributed to "medical errors" in hospitals, medical care – both in and out of the hospital – can harm as well as heal. This has led to a focused effort – these days called "risk management" – to identify and improve quality of care by reducing risks to patients. But there has also been a rise in "defensive medicine" – a greater tendency to obtain tests to "rule out" conditions to head off potential liability. Such testing, which was partially controlled when managed care first came on the scene, appears to again be on the rise. This tendency runs counter to modern medicine's commitment to evidence-based practice, as backed up by epidemiologic data, and published clinical trials. It also increases the cost of medical care.

The battle over medical malpractice is being fought on several fronts with a number of different players: lawyers – who argue that their clients deserve as much as they can get for pain and suffering; insurance companies, which are pleading diminished reserves; legislators, who have the ability to make substantive changes; and doctors, who are being buffeted by multiple forces. It remains to be seen how this volatile issue – one that ultimately affects every American – will be resolved.

Dr. Tenenbaum is the Edgar Leifer Professor of Clinical Medicine. In January, he was appointed as the senior associate dean for clinical affairs.


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