Pennsylvania tort crisis: Lawmakers fiddle, doctors burn
■ Physicians welcome an abatement of their payments into the state's MCare fund but say long-term solutions are needed to keep them in business.
By Tanya Albert amednews correspondent — Posted Jan. 12, 2004
General practice physician Ronald Martin, MD, isn't expecting to make any money in his rural practice in Cambridge Springs, Pa., this year.
In fact, he's borrowing money from a family member to keep his practice afloat.
He has no choice if he wants to keep his medical license. In Pennsylvania -- one of the 19 states the American Medical Association says is in the midst of a medical liability insurance crisis -- physicians have to carry insurance in order to be licensed.
Insurance this year will cost Dr. Martin about $24,000. That's without assuming the higher risk -- and higher insurance premium -- associated with delivering babies. Dr. Martin gave up obstetrics years ago, and he stopped working in the emergency department this year in order to reduce his premium a bit.
Still, the $24,000 premium reflects a 400% increase in the cost of his medical liability insurance over the past three years. It's an increase that would be difficult for any small business to absorb.
On top of that, Dr. Martin has to pay more than $5,000 into the state's MCare fund, a catastrophic fund that Pennsylvania physicians contribute to in order to help pay jury awards throughout the state.
"I'm borrowing this time," said Dr. Martin, who turns 60 this year. "But I can't keep borrowing like this again and again."
Pennsylvania and West Virginia were the first states in the nation to start seeing medical liability insurers raise physician rates or leave the market. They were also the first states to see high-risk specialists retire early, move to other states or forgo procedures. The two states were also the first to watch residents and young physicians bypass them to set up practice in areas with a more friendly liability climate.
As 2004 begins, West Virginia's Legislature has implemented a $250,000 cap on noneconomic damages awarded in medical malpractice cases, something physicians say is key to reining in liability premiums. Texas also starts the year with a $250,000 cap that is just months old.
But Pennsylvania, which did get some tort reforms passed, is still working toward a constitutional amendment that would allow caps on noneconomic damages and limits on the fees that attorneys can collect.
While the push continues, it's not just the high-risk specialists that are being hard hit by premiums. The problem is continuing to spread to cradle-to-grave caregivers like Dr. Martin, the only physician in his rural town.
"It's very frustrating," said Pennsylvania Medical Society President Jitendra M. Desai, MD. "The worst thing that is happening is that doctors are leaving the state and young doctors aren't coming in."
Scratching the surface
The Legislature is aware of the problems physicians face and in the days before Christmas gave physicians some short-term relief by cutting the amount they are required to pay into the state MCare fund.
Obstetricians, neurosurgeons, orthopedic surgeons and high-risk surgeons will not have to pay the 2003 and 2004 MCare assessment. Family physicians in rural areas who do obstetrics also are entitled to the full abatement.
Other physicians in Pennsylvania will have to pay 50% of their MCare bills for the two years.
The estimated $220 million in relief for physicians will come from a 25-cent tax on cigarettes. Physicians will have to stay in Pennsylvania through the calendar year in exchange for the abatement. If they leave before that time, they will have to pay 100% of the abatement they accepted.
"No state has done more to provide short-term relief to its physicians," Pennsylvania Governor Edward G. Rendell said in a statement. "I urge the Legislature to continue to focus on this issue and pass long-term reforms I have proposed, including patient safety, insurance and tort reforms."
Rendell signed the bill, part of the state's budget package, into law.
Sellersville, Pa., general surgeon John Pagan, MD, said the abatement is a welcome gesture. But he's not sure how much good it will do for him and the three other general surgeons in Pennridge Surgical Associates.
Before the abatement was passed, the group was faced with paying more than $1.3 million for insurance in the next 12 months. With the abatement, the group is still looking at more than $1 million in insurance bills next year -- $1,052,000 to be exact.
"The abatement is a small piece of the package," Dr. Pagan said. "Any relief is welcome, but it does not fix our problem."
And he said he believes attaching a requirement that physicians finish out the calendar year if they take the abatement could make it a less desirable option for physicians who are uncertain whether they can afford to stay that long.
At press time, the fate of Dr. Pagan and the other members of his group rested with whether they would be able to find affordable insurance for this year. At the rate they were quoted from one company, Dr. Pagan said that they would have a hard time making the payment even if they ran the practice like a clinic where physicians didn't take a salary.
The decision on whether to close the practice depended upon whether they could work out an arrangement with a hospital for more affordable insurance. Dr. Pagan and the other physicians have been telling patients they may have to close the practice, and the physicians have made an arrangement with a group in Delaware to provide care to postoperative patients if necessary.
"The decision will be made for us," said Dr. Pagan, who has been active in trying to get tort reform passed. "We don't want to leave. We don't want to stop practicing. We want to do what we were trained to do. But the decision will be made for me. I've fought a good fight and I'm at peace."
Long-term relief needed
In order to attract younger physicians and keep older physicians from retiring early, physicians say Pennsylvania needs to pass a constitutional amendment that would allow noneconomic damage caps. And they say lawyer fees need to be curbed.
Not surprisingly, the Pennsylvania trial bar disagrees. Instead, it points to the cyclical nature of the insurance business, noting that insurance companies have gone through a spell during which they are receiving lower income on investments. Attorneys also say the state should focus on improving patient safety.
It's been an ongoing argument in Pennsylvania for several years now. And doctors say that as more of them leave the state, retire early or cut high-risk services, the state is growing ever closer to a meltdown.
At the end of 2002, physicians such as Pottstown colon and rectal surgeon Scot Paris, MD, found affordable insurance by obtaining a claims-made policy. But he knew the cost of that policy would go up when he received his bill at the end of 2003 and that it would be difficult to hang on another year if nothing changed politically.
"Last year, I knew it was going to get worse," Dr. Paris said. "This year, I feel the same way, but this year reality hits because the numbers just aren't doable."
Like other physicians, Dr. Paris is able to continue to practice in Pennsylvania because an outside source is providing assistance with his medical liability insurance premium.
But he and others fear what will happen when that money runs out if noneconomic damage caps are not passed at the state or federal level.
"I love what I'm doing," said Dr. Martin, the general practice physician from Cambridge Springs. "I'd give anything to continue practicing until I'm ready to retire and then turn the practice over to someone."
But with less than 6% of Pennsylvania physicians now younger than 35, Dr. Martin fears that, without long-term legislative relief, there will be no one to take over the reins. And his town will become another place without a physician.