Why Doctors Are Quitting Medical Practice: Behind the Malpractice Crisis

Article excerpt

Newspapers across the country report a developing crisis in medical practice--doctors quitting and hospitals cutting services because they can't afford the soaring cost of medical malpractice insurance.

From the Houston Chronicle: In July 2002, Las Vegas' only level-one trauma center had to shut down for 10 days because its surgeons could not afford their liability insurance premiums. The closing left Las Vegas residents 80 miles from the nearest operating level-one trauma center. One auto accident victim was reported to have died at a local hospital while awaiting transportation to the out-of-town location.

From the St. Louis Post-Dispatch: In October, 2002, a gynecological oncologist left his group practice because of rising malpractice premiums. As a result, he closed a rural outreach clinic. Now some women with gynecological cancers are forced to travel over 100 miles to receive treatment.

From the Las Vegas Review-Journal: A woman was forced to wait six months to have three lumps removed from her uterus. She said she probably would still be waiting for the surgery if she had not gone to her doctor's office and refused to leave until the surgery had been scheduled. The county medical society says over 30 Las Vegas obstetricians have left town because they cannot find affordable malpractice coverage.

From Health Care News: Forty percent of kidney specialists in Manatee County, near Tampa, Fla., have been unable to renew their malpractice insurance for 2003. Medicare regulations require a kidney specialist to be on hand for open-heart surgeries.

According to the American Medical Association, 24% of specialists have stopped providing some high-risk services--like delivering babies. A 2002 survey by the American College of Obstetricians and Gynecologists found that 73% of ob/gyn specialists had been forced to retire, relocate or modify their practice.

Behind this medical exodus lie reports of soaring malpractice insurance premiums for physicians--especially for certain areas and for certain specialties. While doctors' yearly premiums can vary widely, they typically run into the tens of thousands and sometimes hundreds of thousands of dollars. The Louisville Courier-Journal recently reported one obstetrician who stopped delivering babies in April 2003, in order to reduce her malpractice premiums from $300,000 to $49,000. Medical Liability Monitor reports that ob/gyn specialists in Miami pay an average of $210,576 a year for coverage. The figure for Las Vegas was $141,917.

Medical Liability Monitor reports that internists, general surgeons, and ob/gyns have faced double-digit percentage increases in liability premiums for two years running. Newspapers also contain various reports of increases exceeding 100%. The Los Angeles Times, for example, reported one obstetrician who moved her practice from Las Vegas to West Los Angeles because her malpractice premium increased from $37,000 to $150,000. According to the Washington State Medical Education Research Foundation, some Washington doctors have seen a tripling of their premiums since 1998.

While the nature and causes of these premium increases are vigorously debated, two things are clear. First, the cost of defending lawsuits and paying awards and settlements for alleged malpractice has increased. In 2001, the total costs were estimated to be $21 billion, up from $9.4 billion in 1991. The increase, while not dramatic, has been steady over the past decade. That is true even when the data are adjusted to account for inflation- and the growth in the number of doctors practicing in the United States. Since 1991, the inflation adjusted per-doctor cost of malpractice lawsuits has increased 14%. Since 1975, the per-doctor cost has gone up 47%. (See table below.)

The second factor affecting physicians' premiums for malpractice insurance has been the generally negative investment climate. Premiums are connected to the investment climate because insurers price their policies based not only on the costs they expect to incur in offering the coverage, but also on the income they expect to earn on the premiums they are able to invest. …