Commentary by Alan Plummer
Illustration by John Nelson

Over the past few years, medical liability insurance rates have skyrocketed. Many physicians are unable to obtain medical liability insurance or can't afford it. Because of the constraints of Medicare, Medicaid, and managed care, physicians are unable to raise charges to defray the rising costs of medical liability insurance. As a result, they are forced to limit services, move to a state with lower premiums, retire, or leave the practice of medicine. Across the nation, for example, many obstetricians and family physicians have stopped delivering babies. Some radiologists and pathologists will not read mammograms and pap smears.

Hospitals too are feeling the brunt of rising insurance rates. A rural hospital in Bainbridge saw its medical malpractice premium rate increase from $140,000 to $970,000 in one year -- on a $1 million policy! In West Virginia and north Mississippi, virtually no neurosurgeons are available. Copper Queen Community Hospital in Bisbee, Ariz., had to close its maternity ward this year, when four of the six family practitioners providing obstetric care could no longer afford insurance. The only Level I trauma center in Las Vegas shut down for 10 days because it couldn't get medical liability insurance. While that University of Nevada trauma center was closed, 150 patients were taken to lesser-equipped emergency rooms; six of those patients died. The Nevada legislature had to pass emergency measures to reopen the trauma center.

The American Medical Association has identified 12 states, including Georgia, facing a medical liability crisis. In 2000, Georgia physicians paid more than $92 million to cover jury awards -- the 11th highest payout in the nation, despite the fact that Georgia ranks 38th in total number of physicians. Malpractice premiums for Georgia physicians increased 20% in 2002 and are expected to go up that much again in 2003. The Emory Clinic saw its liability rates jump by 21% in 2002 and is facing an increase of 39% in 2003.

• Medical liability insurers have never been big investors in stocks, investing about 90% of their assets in US Treasury and corporate bonds and only about 10% in stocks. The poorly performing stock market has had minimal effect on medical liability premiums.
• During the early to mid-1990s, claims were resolved for less than insurers' estimates; surpluses were returned to policyholders through lower premiums.
• The insurance commissioner regulates medical liability premiums.
• Georgia's largest writer of physician medical liability - a mutual insurance company created by physicians for physicians - sells insurance at the lowest premium. Any profit is returned to policyholders as a credit or dividend.

The major cause of skyrocketing medical liability premiums is explosive growth in jury awards. According to Jury Verdict Research, the average malpractice award doubled between 1997 and 2000 from $500,000 to $1 million, increasing 43% in the last year of that period -- more than seven times the rate of inflation. More than half of all jury awards today top $1 million.

In Georgia, the number of medical liability claims of $500,000 or more doubled since 1995. Claims of $1 million nearly tripled, as did claims of $2 million or more.

Physicians paid more than $6 billion in medical liability premiums in 2001, and this year, rates will increase 75% or more in some states for some specialties. Altogether, medical liability plus practicing defensive medicine (ordering additional unnecessary tests and treatments to help avoid frivolous lawsuits) add up to $110 billion to the annual cost of health care. There is no way to recover these rising costs.

The 2003 Georgia General Assembly will consider a commonsense professional liability reform bill. It will be similar to HR 4600 and will include these provisions:

Expert witness qualifications. Currently, any physician, practicing or not, can testify in any case, regardless of specialty. The bill requires that physicians who testify against a physician must have practiced medicine for three out of the previous five years and must be licensed to practice in the same specialty or area of medicine as the defendant.

Dismissal rule. Currently a plaintiff's medical liability case can be dismissed two times up to halfway through the trial. The plaintiff has six months after each dismissal to refile even after the statute of limitations has expired. The new bill levels the playing field by limiting the plaintiff to dismissing his or her case one time and by prohibiting all dismissals after jury selection.

Joint and several liability. Currently each defendant is responsible for 100% of the verdict at the plaintiff's option. Tort reform would apportion damages according to degree of fault attributed to each defendant.

Comparative negligence. The proposed bill recommends reducing any award to the plaintiff by his degree of fault for the injury -- for example, a patient's failure to comply with his or her physician's orders.

Cap noneconomic damages. Georgia now puts a $250,000 cap on punitive damages. The bill limits noneconomic damages to $250,000 as 23 other states have done.

Limits on attorney fees. Plaintiffs' lawyers currently get up to 50% of the settlement plus expenses, bringing their cut to as much as 60%. The bill would put attorney fees on a sliding scale, with fees decreasing as the award increases. Twenty-one other states have such limitations.

From the Director  /  Letters

Battling back

New picture of health

Big idea on a nanoscale

Moving forward  /  Noteworthy

On point:
  Medical liability -- the crisis is now

A fine kettle of soup

Allow physicians to continue to perform high-risk procedures, such as delivering babies, performing neurosurgery and trauma surgery, and reading mammograms and Pap smears.

Prevent physicians from having to leave practice or retire at an earlier age and ensure an adequate pool of physicians to meet the needs of Georgia's patients.

Lower the cost of medical liability as well as accident and health insurance premiums in Georgia and, in turn, lower the costs of health care and make health insurance more affordable for Georgians.

Improve the competitive medical liability insurance market here, which will benefit Georgia's physicians, hospitals, and nursing homes, plus other purchasers of medical liability insurance.

As health care providers, we want to give our patients the best possible care in an accessible and affordable environment. Passing meaningful tort reform in Georgia will allow us to do just that. It is imperative that you know the issues and their ramifications. Communicate your position to your legislators and urge them to support meaningful tort reform in 2003. Or e-mail alan_plummer@emoryhealthcare.org.