Iowa Press; 1318; Medical Malpractice Insurance Costs

The first number 13 18 February 23rd 1986. Oh. A. Major funding for this program was provided by friends of Iowa Public Television. This rural Iowa community's health care provisions include an ambulance service one hospital and six doctors. A few years ago all six delivered babies as part of their practice today just to practice obstetrics. The reason doctors say increased malpractise insurance rates have forced some of them to change. A look at medical malpractise the cost of doctors insurance companies and consumers. Tonight on I will cry. This is the Sunday February 23rd edition of I Will prose. Here is Dean Bourne.

Good evening. In Georgia on February 4th 2000 doctors gathered at the state capitol to protest high and they'll practice premiums. Also earlier this month in Massachusetts hundreds of doctors refused to treat patients for an entire day. Their protest a 68 percent rate hike in their malpractise insurance premiums. There have been no similar mass demonstrations in Iowa but I will physicians and their patients are also affected by increasing their practice premiums. And as Nancy Crowfoot reports many doctors particularly physicians in rural areas have had to change their medical practice because of the cost of liability insurance. Bowline is a town of just over 75 hundred people in northeast Iowa in the area of health care provisions. It is a town with an ambulance service one hospital and six physicians. Up until a couple of years ago all six of the general practitioners in this community delivered babies as a part of their practice. Today just two all line doctors practice obstetrics on a regular basis.

Dr. Steven Cook is not one of them. He still has a couple of obese patients but he says he may stop doing deliveries altogether. The reason he says is the increase in malpractise insurance premiums. It just doesn't make any economic sense. If you have say 25 or 30 deliveries in a year and the obstetric coverages is very high you probably would only receive 50 to 60 percent of your fee. The rest of it being taken up by a malpractise insurance cost the malpractise insurance is a sore point for many doctors yes. And the decision to give up a part of a medical practice like obstetrics was not an easy one for Dr. Cooke when everything goes well it's the most enjoyable part of your practice. You know the joyful birth the delivery is very exciting.

You know I have two children I can really relate to that great sense of joy when the baby is delivered but. When complications ensue it also is one of the most traumatic I think events that a parent or a doctor can encounter. And so you know I have given it up and reduced it in and just about eliminated it with a great deal of reluctance on my part. For general practitioners like Dr. Cook the difference in premiums by dropping obstetrics can mean thousands of dollars. For example his insurance company which is the largest insurer of physicians nationwide is St. Paul fire and Marine. The company says that their rates for Iowa family practice doctors who do obstetrics is eight thousand two hundred twenty eight dollars for this year for family physicians that don't do obstetrics but do minor surgery. The 1986 premium is six thousand two hundred sixty dollars. And for a family doctor that

does no obstetrics and no surgery. The premium is four thousand two hundred seventy nine dollars. Some of those rates have increased by up to 34 and a half percent over the 1995 premiums. Dr. Cooke says his insurance premiums have increased by a 150 percent since 1983. But insurance companies like St. Paul fire and marine argue that the increases are justified. In the past 10 years the average cost of medical malpractise claims has tripled. In that same time period. The number of claims per 100 doctors has doubled. People seem to be filing more suits in our society you hear the term litigious society. The increased insurance rates and the increased number of lawsuits against doctors has forced doctors to document more of their examinations of their patients and has turned some of what would once be considered a routine procedure into a lengthy one.

Maybe there was a time years ago where you could look at me and say that was fine you know give it a couple of days it'll be just a contusion and check back with me. In situations where you have a passenger car you may have a bump on his head and the pain on his elbow. You have to do X-rays of every single spot that hurts. OK. Because if it ever does come to court and frequently auto accidents do you had better have evidence that X-rays were negative because of three months from now that patients are still hearing them. And doctor you didn't do X-rays of that knee. You're in hot water. In essence the malpractise insurance you're on diversity is a round robin argument involving insurance companies lawyers and physicians the physicians blame the lawyers for upping the amount of money sought in a malpractise suit. The lawyers blame the insurance companies for upping the premiums to make more of a profit. And both insurance

companies and lawyers blame physicians for driving the premiums up by not better policing their colleagues in ousting the bad doctors from the profession to settle a controversy over the high cost of malpractise insurance premiums. Several interested parties including consumer groups and physicians have proposed state legislative action not just in Iowa but in other states as well. Currently 35 state legislatures are expected to wade into the malpractise controversy this year. But Iowa House speaker Donnie Vinson says that while the Iowa legislature plans to deal with some reforms in tort liability he doesn't expect the Iowa legislature to deal with the medical malpractise liability issues at least not this session he added that the legislature will probably pass an insurance disclosure a bill to obtain the figures of just what insurance companies receive in premiums and what they pay out in claims and given that he says it will be easier to see what kind of legislation is needed. What is needed is what we're going to be talking about this evening with our guest Dr. Everett Mathias

of Council Bluffs He's the president of the Iowa Medical Society. And Tom Vilsack of Mount Pleasant the president of the Iowa Trial Lawyers Association will be questioned by Allison Headley a legislative reporter for WOIO Public Radio and AIDS and by John the correlate a columnist for the Burlington Hawkeye and other Harris newspapers. Gentlemen first of all I'd like to get you both on record on whether or not we agree that there is a problem with malpractise premiums out of hand Lesterville sack. I disagree. And the reason I do in the state of Ohio in the last 10 years medical malpractise insurance carriers have collected one hundred sixty one million dollars in premiums during that same period they've only paid out forty one million. That's only 25 cents out of every dollar. The key question is where's the other 75 cents. In addition in 1075 the insurance commissioner's office was required to receive information concerning claims that were being filed against doctors and hospitals in the state.

Information has been categorized in computerized and it shows that from. The Nineteen eighty three to the current time in light of the piece that preceded this conversation the o b g y in cases of actually declined in number a 34 percent decrease from one thousand eighty three to 1994 and another 24 percent decrease from one thousand nine hundred forty one thousand ninety five. I think those facts would indicate that perhaps there is some question as to whether or not in this state there is a crisis. Dr Mathias and I'm guessing you're going to differ. Do you believe that there is a crisis with malpractise premium costs and if you do can you explain what the reason is. Well we the medical society and the. Osteopathic society both agree that there is a crisis. There have been a large increase in malpractise suits. There have been a large increase in their wards of the malpractise suits and both of these of course contributed to the difficulty in the medical field.

For example our main objective in medicine is to have the patient have access to. Quality medical care at a reasonable cost. And what has happened is that. The access portion is disappearing. As Dr. Cook said there are many. Family practice physicians who have dropped of no longer deliver babies. Not only that there are many high risk specialists such as neurosurgeons of down ecology who have also stopped doing some of the procedures that normally they would do. The document titled What about Mr and Mr Bill Sachs figures if that. That he had tracked the company to clean it up the way he suggested. Well I don't know anything about the figures but if the insurance companies were cleaning up as far as malpractise is concerned we would have more than in the United States there's only 10 commercial companies with 33 physician owned companies in Iowa for

example in January. St. Paul. Since January St. Paul no longer insure any new physicians unless they're with a group that already has and what about that Mr. Bill sat quiet. Why if it secure good deal I'm going to create companies jumping into it instead of getting out. It's a specialized area but if you look at the figures and the profit figures that those companies that are in malpractise insurance are making you'll see that there's a substantial sum of money being made now to tell you why. The state of Washington passed an insurance Disclosure Act slimmer of the one that we're asking for in this state as a result of that is the Disclosure Act it was determined that the 75 companies that the major companies that write about 95 percent of them out practice insurance in this country took in about seven billion dollars in premiums in the last six to seven years. During that same period of time they had investment income on that money of about 1.7 billion. But they only paid out the injured victims 1.4 billion three hundred million dollar difference and they still had the 7

billion dollars worth of premiums. So that's what I see the suggestion here that it's the profit margin that's causing all the trouble in the poems. If that is true why don't we take the profit out of it that you've got in your state and should a doctor for it for a reasonable fee. Because states already doing that with all the doctors at the University Hospitals and I would say the why don't you extend it to all that that the those those greedy profit make private companies clear out of it. One of the reasons that they have to keep that money for six or seven years is because a lot of times. Those suits that are filed are not settled for six or seven years and that company for example if a suit is filed the company has a certain amount of reserve that they put away for that and I don't have a what about that my question is what would the medical society think about getting this data that needs private companies out altogether. Do you think you'd be better assured that you and you I don't know I don't think so no. Let us go ahead let me go on and on that in the state of Maryland the physicians recently

received information that they were going to have a 70 percent increase. The physicians asked Robert Hunter who is the former federal insurance administrator under President Ford to look into whether or not a 70 percent rate was was justified. He looked into it and found that instead of a 70 percent rate increase they should have a 10 percent reduction. One of Mr. Hunter's suggestions is that the government does get involved in the insurance business in relationship to re insuring actually insuring the insurance companies because a lot of these rate increases are being dictated by companies that are not regulated in this country that are in fact overseas. Are you alleging Mr. Bill sac that insurance companies are getting rich. You've presented some figures and a difference a profit in there someplace and you asked the question rhetorically I guess who where does the other 75 cents out of this dollar you're say what do you think is getting it. Well I'll just say this Mr. Borg in the last 10 years the property and casualty insurance industry of which medical malpractise is a part. Has had its assets grow

from eighty two billion dollars and one thousand seventy four to two hundred sixty four billion dollars a quarter of a trillion dollars in just 10 years. During that same time period they have recognized over seventy two billion dollars in profits and have only paid less than 2 percent federal income tax for the sun to move on to set mouse free guidelines have the money factor here. That would all be a valid or invalid if we didn't have any malpractise cases and I would so why do we have so many malpractise cases is it the doctors fault they still sac or is it the lawyers found fault Dr deceased. Well I think we do have an increase in malpractise cases and. I think one important part is that even though and as was referred to before as kind I would just assume society as we have now everybody expects perfection in everything's done and in a not exact science it's medicine. You can't always have perfection and. You go ahead go ahead I follow and I think that as far as.

Policing the doctors and peer review. We have more peer review now than we've ever had in the history of medicine by peer review you mean doctors reviewing other doctors to see if they're competent. That's right. But could it not be that part of this malpractise insurance crisis and the increasing number of lawsuits being brought and the increasing costs that doctors are having to adding to pay thier premiums could not be blamed on an increase in just a medical malpractise and a failure of physicians to police themselves. Even though we have more peer review is it just as I stated we have more peer review we have of course as far as a Board of Medical Examiners who really rules really the actions of doctors in the state they're more active now than they have ever been. They have more committees in the they've ever been than they've ever had. And we think they do a good job. Now one thing that I might mention is that we think we can do a better job and. Of the proposals placed by the medics side in the I watch Pather society I think

nine of those 17 POWs will has to do with increased hear you I want to try to feed us here at REST OF BILL Sachs response to US had to ask the question why did he thanks the doctor has a plan. Well well let me first of all preface my remarks by saying there's an assumption at this meeting that there is in fact a malpractise crisis the statistics and I would indicate that there has been a decline in the number of claims about the cost of insurance. All right. In relationship to a doctor's income. According to a recent Time magazine article malpractise premiums represent less of a percentage of the doctors net income than they did in 1900. In fact there has been a decline. In terms of malpractise premiums in terms of the percentage of doctors in coming in for the first time since they began compiling statistics of doctors net income across this country has topped six figures that brought a hand raised from Doctor Mathias and what did you want to say hey there delilah you know I think he's talking really talking about

averages. Now those are fine because the family practice that does not do the tetration did not do minor surgery does have a small premium. But when it comes to their wages when it comes to specifics you start talking about obstetrics and gynecology you start talking about neurosurgeons and orthopedist. They've had a tremendous increase in premium amounts in the past two years with us and under the current situation though. You call that a crisis could you call that a time when patients are becoming more aware of their rights to be able to receive compensation from misjudgment by a doctor. Well that could be true it's you know this is a general problem when it comes not only the medicine that comes to everything else it comes to Department Transportation cities and counties and. Anyone that has any service that they give and I think that's probably true. I think that one thing that should be mentioned is that even though these suits are filed and even though

they go to court practice 80 percent I'm come out in favor of the doctor now so it seems that what what we're having is we're having a lot of non meritorious suits filed that finally end up costing the insurance companies costing the doctors costing everybody but the the people that filed suit but lost model money but under the current situation that you're proposing to make some changes legislatively would the patient still have the same. Full rights to be able to receive compensation Absolutely. Do you agree. Not at all the medical profession is asking for caps on damage recoveries which would severely severely restrict the rights of people that are currently going to court that had a go at me. Why don't we find out first what exactly the IMF is asking for in the form of legislation and the caps you just referred to could you give us a thought now just I should as I mentioned there are 17 points on there the first nine had to do with with increased power the Board of Medical Examiners increased peer review. Having

records from hospitals and staffs sent to the Board of Medical Examiners increasing the number of investigators and of course that poses a problem because with the with the money crunch now I doubt if there would be any increase. Money is available for the Board of Medical Examiners. Then we get down to the tort reforms we like to have a cap on pain and suffering and the other kept the weed like it's on a per case cap of $500000 except. For future medical care it's been an argument that we don't allow you know when it goes to five hundred thousand quids but that's not true because for the for anyone with future medical costs exceeding that that would be covered. The others that are involved in that are structured settlements that have to do with the structured settlement over a period of years I think over a hundred dollars. Anything over $100000 it would be structured for a period of time.

Mr. Bill Sykes what's wrong with that. What's wrong with limiting the amount of damages. Well first of all we're assuming again that there's a problem in Iowa and this is just explain why that. OK. Secondly in the good case. Secondly you're assuming that these reforms are going to make a difference in malpractise premiums. The fact is they're not. In states that have adopted these kinds of reforms in 1975 the mid 70s there's been no appreciable difference. The state of Virginia put caps on pain and suffering awards 10 years ago. Their doctors are now faced with the same problems that Iowa doctors are faced with. It seems to me that I what doctors ought to be looking away from the tort system in towards the insurance industry. There's also a question about Doctor Doctor discipline are the doctors responsible for malpractise. The American Medical Society admits admits that between 5 and 10 percent of the physicians that are practicing in this country and of which there are about four hundred forty thousand are impaired by virtue of drug or alcohol abuse and are constantly endangering their patients on a daily basis. But yet last year only thirteen hundred eighty doctors were disciplined.

They're not a problem a doctor Doctor Besides what. Why isn't the I would have medical examiner voided doc Asian themselves able to get rid of the music and a better way. Well I think that. After board a medical examiner hearing that all becomes public and I think that over the past few years. Many times during during the year at least once monthly there is a list and there are people who didn't get my observation that they do a pretty good job of getting the drug cases and the alchol case could go to specific things they could they could nail down and they could tell a guy you don't practice unless you passion a daily urine analysis. I'll tell you I don't doubt the general just general incompetence. I'll tell you one thing that happens as of many times. We do have those people the ones incompetent the negligent ones we do have those people paid and we we want to get rid of them but what happens is they obtain legal consultation and they either sue the hospital or sue the staff and we can't get rid of them.

What about that it feels like as a lawyer if you do it would you want to see any weakening of the right of a doctor to defend against efforts to take is his livelihood away from you not should we have laws that would make it easier to get rid of bad doctors. No I don't agree with I don't agree that we should but on the other hand on the other hand I question whether we're doing a very good job in the state of Iowa according to Dr. Sidney Walsh report in public health. I'll rates twenty sixth in the nation in relationship to serious disciplinary action according to one thousand ninety three Servan that survey indicated that only 4 doctors in the state for doctors in the state were disciplined. There were approximately thirteen hundred doctors disciplined even though statistics indicate that one hundred thirty six thousand people a year are hurt or killed as a result of medical malpractise and a cost of twenty four billion dollars a year. Now let's let's get back to the solution that you're proposing about limits on how much can be collected in malpractise cases. Doctor Mathias and in some literature that I that I got from the press of the island Trial Lawyers Association they call it a

massive attack on the civil justice system. I'm guessing you're not going to agree with that would you like to respond to that. No I think it probably is an attack on the civil justice system I think that we have numerous people who in the past few weeks just in in the morning for example are coming out and have come out and said that there has to be some changes in the civil justice system. One yesterday I think was the attorney general that mentioned that there has to be some changes in the civil justice as far as that the Caps are concerned I think that we need those I think that there are a lot of people who agree that we need there was one the governor while the other two justices of the United States Supreme Court that says we have to have some changes and we have to have some caps. I got a couple other things. One is we talked about the insurance companies making making a lot of money and we should blame it on the cure. Last year when excited started their own insurance company. And we have a certain number by our physicians that we insure. Even with our company which operates out of the

basement of the Medical Society has maybe two full time employees and two part time employees. We still have a reserve premium 22 percent because of the number of cases and the number and the and the highway workers. Mr. Vilsack about going back to the cap thing. If I lose the use of my hand due to a should you call accident as I have now I can see you do is no limit to what I could collect if I lose it in an industrial accident because my employer didn't put a shield on the machine. That state workman's compensation law limit put a cap on what I could collect. Now why is one such city that stalled on my rights and the others seems to be widely accepted by everybody. Two comments first of all and I will workman's compensation in exchange for a guaranteed payment. The worker gives up his right to sue the employer. It's a guaranteed payment no fault is required no negligence is required. The employee can be responsible for his own injury and still receive payment.

In the medical negligence area it's not simply a medical accident that causes a lawsuit. It's when a physician fails to practice medicine below the standard that his own peers established not not lawyers but his own peers established. So you see Workman's Compensation is not a good comparison because in workman's compensation everyone gets paid regardless of fault where it is in the medical negligence area. Only those that can prove that the doctor's conduct fell below the standard established by his or her own peers is entitled to recover. We don't agree here that the two of you are whether or not there actually is a problem with the medical malpractise insurance crisis. But there are bills pending in the Iowa legislature. Are you going to be able to convince lawmakers to either act or not act on a crisis our lack of. Let me respond if I might excuse me let me respond. I think it's important for everyone to understand that the Iowa Travelers Association is not simply against what the what the physicians are proposing. What we are suggesting

is as the insurance commissioner suggested this weekend as the attorney general also suggested that these matters are of such grave importance and involved not only the medical community and legal community but all facets of society that the legislature commission a study. The Iowa Bar Association is willing to put $100000 to fund that study to get all the facts on the table to eliminate the assumptions and to examine closely whether or not we have in fact in this state a problem. To date the Medical Society and others have fought against that concept that if lawyers malpractise premiums are going up to the extent doctors are. Would you consider it a crisis Mr. Chorley my premium went up 35 percent last year. I'd also like to state that his premium probably should turn it around two or three or four hundred. Now you know it's compatible with the family practice figures of the sheen of the attorneys that I have talked to said that there is wait around $2000 just just in the half minute that we have left here Dr. Mathias and are there other ramifications if we

continue with the current situation of doctors not delivering babies anymore in the rural areas a primarily family practice doctors and so on are there other things that are going to happen to medicine in Iowa the rural hospitals closing as a result of malpractise. Well I would think so I think that unless we get some type of rain on the problem at the present time you're going to have the same we're going to have more family physicians that are going to deliver a baby you're going to have more. It's highly skilled specialists who are not going to do some of the procedures they are doing because of the threat of malpractise. We are going to have an increase in the cost of medicine because doctors practice what's called defensive medicine they have to protect themselves. Not only you know what you do is when you have a case you can justify what the medical group can justify it to society. So you have to have all those figures I have and the figures that I have right now is that we're out of time and I'm sorry. Thank you very much doctor. And Tom Vilsack for being our guest today on I will press. We invite you to join us next week for I will press will be talking about the state's pursuit of defense dollars as a means

of economic development is not one that's I will press for today. For our panelists Allison Hadley John McCormack Thanks for joining us. We'll see you next week. A major funding for Iowa prize was provided by friends of Iowa Public Television.