Physicians try fresh approaches to combat liability premium hikes

Vocal participation in rate hearings is one way to work at effecting change.

By Tanya Albert Henry — Posted Oct. 18, 2004

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When colleagues first learn that Connecticut ob-gyn Thomas J. McNamee, MD, signed on to a letter authored by the state's trial lawyers, they remark that it makes for an "odd couple," or note that politics can create "strange bedfellows."

But Dr. McNamee believes that doctors and trial lawyers -- and the two patient groups that also signed the letter -- have a common goal in this situation: reducing medical liability insurance rates.

The letter is just one example of how, after several years of being repeatedly hammered with big medical liability insurance premiums, doctors are becoming increasingly proactive -- and creative -- in their fight to temper the situation.

The July 30 letter sent to Connecticut Insurance Commissioner Susan F. Cogswell challenges the need for a nearly 90% rate increase GE Medical Protective Co. filed earlier this year.

And the letter from the unique coalition has sparked the insurance commissioner to take a closer look at the company's decision to raise rates July 1. The commissioner is hiring an outside actuary to evaluate the hike.

"They may tell us that the increase is justified, but at least we will have tried," Dr. McNamee said. "My major concern is that women are not going to have access to health care."

Dr. McNamee's action is one of several activities physicians are undertaking in hopes of stemming insurance premium increases. It comes when they are beginning to get information about what type of increases to expect on medical liability insurance premiums in coming months.

As they have in years past, doctors are bracing for double-digit increases in many states. To raise awareness and protest the increases, some Maryland doctors are planning not to perform nonemergency surgeries or provide other nonemergency services in mid-November. In Rhode Island, the medical society will be closely watching rate hearings.

"We've got to do something," said Dr. McNamee, who has practiced for 22 years. Connecticut is one of the 20 states the American Medical Association lists as "in crisis" where physicians are leaving practice or giving up high-risk procedures.

Challenging rate increases

Dr. McNamee has been surprised at how much attention his signing on to a letter with the president of the Connecticut Trial Lawyers Assn., the Connecticut Patients' Rights Group and the Healthcare For All Coalition has garnered.

He made the decision after one of his friends said the trial lawyers had an actuary do an analysis of the 89.6% overall rate increase that Medical Protective requested. That analysis showed that the hefty increase wasn't warranted.

Although Dr. McNamee says many changes are needed to reform the system, he saw this as one area that should be explored.

"Physicians; physicians and lawyers; and physicians, lawyers and insurance companies need to work together for a better resolution to what is compromising health care today," he said.

Tim Norbeck, executive director of the Connecticut State Medical Society, said the society supports scrutinizing insurance rates. But if the insurance commissioner finds that this rate increase wasn't justified, Norbeck said, it isn't an indication that the rate increases companies have requested in the past have been unjustified as well.

Norbeck said companies have needed increases to pay for defending lawsuits filed against physicians and to pay jury awards.

"We don't want to lose insurance companies because they can't afford to do business here," he said. "On the other hand, we don't want rates to be any higher than they need to be."

The Connecticut Trial Lawyers Assn. has been watching rate filings for different insurance lines on a regular basis for more than a decade. For example, it also keeps tabs on increase requests filed by automobile insurers. The trial lawyers association has taken interest in medical liability insurance in recent years given the large increases that companies have requested.

And in this case, the group does not believe that Medical Protective's increase is justified. "It's important in every state for consumers to be looking at what insurance companies are doing," said Neil Ferstand, executive director of the Connecticut Trial Lawyers Assn. "Companies should be aware that they aren't just dealing with regulators, but consumers are looking, too."

In Rhode Island, a state the AMA lists as "showing problem signs," doctors are making sure that they are at the table when rate increases are discussed later this month. They want to ensure that the requested increases are justified.

"The medical society has gotten more involved, given the climate," said Newell E. Warde, PhD, executive director of the Rhode Island Medical Society.

The Rhode Island Dept. of Business Regulations will evaluate Norcal Mutual Insurance Co.'s request for a 19% increase in rates for physicians. The increase comes on top of a more than 40% increase last year.

Medical society representatives plan to tell the physician community's story and voice concerns about how much worse the situation could become if rates continue to rise.

Already, doctors have seen insurance companies exit the market and have seen the insurance companies that have stayed request double-digit increases recently. That's led to fewer general surgeons, neurosurgeons and obstetricians practicing in Rhode Island today, doctors said. Also, physicians have been unsuccessful in their attempts to get tort reform passed.

"We're just getting hammered, and everyone is getting very concerned about it," Warde said.

In California, the Foundation for Taxpayer and Consumer Rights was successful in September in its efforts to reduce the amount that Medical Protective could increase rates for California physicians. An administrative law judge ruled that the company could increase rates by 11.8% instead of the 29.2% increase it originally asked for. The group has challenges pending on rate increase requests by other companies.

"We challenge these on a regular basis," said Lawrence Markey Jr., staff attorney for the Foundation for Taxpayer and Consumer Rights. "It just proves that companies are going to ask for what they think they can get."

Discontinuing elective services

In Maryland, a state the AMA also lists as "showing problem signs," the insurance commissioner already has approved a 33% rate increase for the Medical Mutual Liability Insurance Society of Maryland for the coming year.

In response to numerous rate increases and the fact that the Legislature hasn't passed MICRA-style reforms, some physicians have decided to protest the continuing deterioration in the medical liability climate.

Physicians said their state was once one where doctors from Pennsylvania and other neighboring "crisis states" flocked to escape high medical liability insurance rates. Now, they said, Maryland is experiencing the same level of problems their neighbors did a few years ago.

After Nov. 15, Hagerstown, Md., surgeon Karl P. Riggle, MD, plans to provide only emergency and trauma care. It was unclear how long the slowdown might last.

"There is something wrong with the system, and it needs to change," said Dr. Riggle, one of a number of physicians who are planning to run their offices every day as if it were a weekend when only emergency cases would be handled.

Hagerstown neurosurgeon John R. Caruso, MD, is another physician who has decided to stop taking elective cases.

"In order to effect reform, we need to be active," he said. "If I don't fight, no one is going to fight for me."

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Challenge to rates

"As the enclosed analysis shows, the rates charged by Med Pro were unreasonably high for the insurance provided even before the most recent rate increase by Med Pro. The +89.6% rate increase by Med Pro during 2004 simply exacerbates the situation. In addition, as is obvious from the limited number of companies selling physicians and surgeons medical malpractice insurance in Connecticut, a reasonable degree of competition does not exist in the area with respect to the classification to which such a rate is applicable."

An excerpt from the July 30 letter that a Connecticut ob-gyn, the president of the Connecticut Trial Lawyers Assn. and two patients rights groups sent to the Connecticut Insurance Commissioner challenging GE Med Pro's Feb. 19 rate filing.

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Skyrocketing premiums

Insurance premiums for Connecticut ob-gyns, general surgeons and internists have risen markedly since 2000. Here's the average that each specialist paid annually, based on the most recent data available.

Ob-gyns General
2000 $51,958 $28,662 $8,203
2001 $67,719 $35,238 $8,017
2002 $82,238 $40,146 $10,613
2003 $102,187 $46,476 $15,021
from 2000
+96.7% +62.2% +83.1%

Source: Medical Liability Monitor data

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