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malpractice insurance costs impact local patient care
to rally for change
By TIMOTHY COX
The Daily Standard
Skyrocketing medical malpractice insurance costs already are affecting
patient care in the Grand Lake St. Marys area, and a number of local physicians plan to
join a rally in Columbus later this week to draw attention to the issue.
Ever-increasing insurance premiums - especially for specialties like
obstetrics - are putting the squeeze on local doctors. As a result, most family physicians
have given up delivering babies due to the high cost of doing business. If insurance rates
continue to rise unchecked, local doctors warn that the problem could grow - possibly even
forcing some practitioners into early retirement.
The high cost of professional liability is a nationwide issue, but
doctors say the problem is worse in states like Ohio, where there are no laws on the books
to cap monetary awards in malpractice cases.
Coldwater physician Dr. John Naveau is living proof of the growing
insurance crisis. In his (Continued from page 1A) first 18 years of practicing
medicine, Naveau said he delivered 1,073 babies. He has since stopped doing so because of
the high insurance costs. Naveau also has quit assisting with surgeries involving his
patients for the same reason.
"Deliveries were first, physicians assisting on surgeries were
next and other medical procedures will follow," if the issue is not addressed, Naveau
said in a news release on the issue.
Like any business, delivering babies depends on volume to turn a
profit. But if a doctor has too many deliveries - as decided by the insurer - the
physician must get liability coverage previously aimed at only obstetricians who spend all
of their time on such procedures that are considered "high-risk." That simply is
not an option for most family doctors, Naveau said.
"I don't think the public understands the depth of the
issue," Naveau told The Daily Standard in a recent interview. "Doctors make a
good living so there's not a lot of public sympathy. But there are a lot of costs of doing
business the public is not aware of."
Dr. Tom Schwieterman and his brother, Dr. Jim Schwieterman, are the
only local family doctors practicing at Community Hospital in Coldwater who still deliver
babies. They admitted, though, they do not know how much longer they can continue doing
so. It all hinges on what insurance premiums for the next year turn out to be and whether
anything can be done to curb the spiraling costs.
"It's all about access to care," Dr. Tom Schwieterman said.
provide a service we can't afford. If it keeps rising, we will be forced to do
Dr. Jim Schwieterman said the practice is quickly nearing the
break-even point financially on delivering babies. They already have reached the point
where it would be more profitable to quit handling obstetrics completely to focus on other
areas of care and treatment, he said. The days of referring an expectant mother to another
physician are on the horizon.
"I envision that discussion down the road," Dr. Jim
"I'm not so sure I'm going to be able to provide OB care if things continue as they
are going. It will hurt patients far more than it will affect me."
Full-blown obstetrics coverage for the Schwietermans costs about twice
as much because they deliver babies. The partners, who have a Maria Stein family practice,
deliver about 60 babies annually between them.
"Fortunately, we have some good obstetricians in the county. That
the case in some rural counties," Naveau said. Telling statistics
A survey of 600 Ohio doctors completed by the Ohio State Medical
Association (OSMA) shows that 83 percent of the physicians reported a rise in malpractice
liability insurance in the last two years. Those who reported increases experienced an
average spike of 40 percent in their premiums, and nearly three-fourths of those surveyed
said that insurance costs have significantly impacted their willingness to perform
high-risk procedures, like delivering babies.
The survey also showed that 31 percent of doctors in their 40s and 53
percent of those in their 50s are considering early retirement.
"Every person in Ohio should pay attention to this survey. It
physicians are making decisions that will impact access to healthcare for years to
come," OSMA Executive Director Brent Mulgrew said.
"Ultimately, if nothing is done about the issue, it will reduce
the availability of sophisticated procedures in Ohio," said Tim Maglione, the OSMA's
senior director of government relations.
The American Medical Association has listed Ohio among 12 states where
the malpractice issue has reached "critical condition."
Dr. Tom Schwieterman recounted a story of a doctor who lives near the
Ohio-Indiana state line and practices at hospitals in both states. The physician only
delivers babies on the Indiana side of the border, because that is the only place he can
afford to do so, he said.
The Schwietermans also noted the rise in malpractice insurance premiums
often comes with little explanation.
"We do low-risk obstetrics and we have never been taken to court
... but that really doesn't reflect in the rate at all," Dr. Jim Schwieterman said,
noting he absorbed a 25 percent spike in his premiums for his current coverage. Doctors to
As many as 10 Grand Lake St. Marys area doctors plan to attend a rally
Wednesday at the Statehouse in Columbus to draw attention to the issue. They believe a
tort reform bill pending in the state Senate could be a first step toward alleviating the
problem. A "tort" is any wrongful act or damage claim for which a lawsuit can be
Doctors who come to the rally are being asked to wear their white coats
or hospital scrubs and to bring along their stethoscopes. They also are asked to carry
signs to help make their point.
Speakers at the rally are to include the president of the Ohio State
Medical Association, president-elect of the American Medical Association, U.S. Sen. George
Voinovich, state Sen. David Goodman and Gov. Bob Taft.
Goodman is the primary sponsor of the pending tort reform bill. Rally
participants also will hear testimonials from doctors and patients affected by the crisis.
"We want to raise awareness to the possibility of malpractice
costs impinging local care," Dr. Tom Schwieterman said.
Even though the Legislature will not be in session during the doctors'
rally, their cries will not fall on deaf ears. State Sen. Jim Jordan, R-Urbana, told The
Daily Standard that he supports tort reform efforts the physicians seek.
"There is nothing wrong with common sense tort reform measures
that preserve the rights of individuals to bring claims," Jordan said. Details of the
Senate Bill 281 would make a number of changes in state law regarding
how civil lawsuits are filed, mediated and otherwise disposed through the court. The most
obvious changes the 250-plus page bill would make are installing caps on non-economic
damages, new regulations on future damages and limit attorney contingency fees in medical
Those are the issues the doctors say can help fix the system, and that
lawyers say unfairly limit people injured by malpractice to seek compensation.
The bill would cap non-economic damages at $300,000 in all cases.
Non-economic damage is money awarded to a plaintiff that is not tied directly to
compensating for injuries or damage. New regulations - including a "periodic payment
plan" - would govern the award of future damages in excess of $50,000. There are no
limits on compensatory damages for actual economic losses.
Attorney fees would be capped at 35 percent for the first $100,000
recovered, 25 percent of the next $500,000 recovered and 15 percent of any amount received
in a judgment or settlement of any amount in excess of $600,000.
The bill also would set up an expanded arbitration system aimed at
settling more cases outside the courtroom.
The bill, introduced in June, has been assigned to the Senate's
Insurance, Commerce and Labor Committee but no hearings have been scheduled on the bill.
Its supporters point to California as proof that tort reform can bring
stability to the volatile insurance industry. State Medical Association officials claim
the California legislation has increased access to healthcare and reduced the time it
takes to settle malpractice claims by one-third.
The Academy of Trial Lawyers, however, points to Nevada, where they say
tort reform has failed to rein in sky-high insurance premiums.
The three doctors who spoke with The Daily Standard each said they
believe tort reform could bring some relief, but all agreed that it probably is not a
cure-all for the insurance crisis. Past failures
Tort reform proponents are wary of whether the bill would pass
constitutional muster if it is passed into law. The Ohio Supreme Court has
twice in the past decade struck down similar tort reform laws as unconstitutional.
Local doctors and other supporters of tort reform legislation also are
organizing support for two challengers for the state Supreme Court bench on the Nov. 5
ballot. They are supporting Justice Evelyn Stratton and challenger Maureen O'Connor
against Tim Black and Janet Burnside.
In the court's 4-3 ruling that struck down tort reform, the majority
opinion concluded that state lawmakers had exceeded their constitutional
authority with the sweeping law that took effect in 1997 and brought with it some of the
same caps and restrictions found in the bill pending today.
In the majority opinion were Justices Alice Robie Resnick, Francis
Sweeney, Paul Pfeiffer and Andrew Douglas. Chief Justice Thomas Moyer and Justices Evelyn
Stratton and Deborah Cook made up the minority. Conflicting views
Not everyone agrees the answer to the high costs of insurance lies in
changes in the state law. The Ohio Academy of Trial Lawyers has expressed its views on the
issue and has served as a powerful lobby against tort reform in the past.
"We believe that doctors are simply wrong to suggest that the
solution lies with limiting accountability for their mistakes and restricting an
independent jury's ability to make decisions on a case-by-case basis," academy
President Frank E. Todaro said in a recent editorial that appeared in The Columbus
Todaro argued in that piece that 98,000 people die annually across the
country as a result of preventable errors by doctors. He also said that malpractice is the
eighth leading cause of death in the nation, but noted that only one of eight instances
results in litigation.
Naveau said he believes tort reform legislation can be fair and would
not shield doctors from answering for the mistakes or negligence.
Tort reform would not limit injured parties' access to file court
claims, the OSMA's Maglione said, but would create "a civil justice system that makes
sense." Doctors are hit with significant expense and emotional stress in defending
even a frivolous suit, he said. Frivolous lawsuits
Naveau and the Schwietermans said they believe there is a problem with
frivolous lawsuits being filed against doctors and with rising jury awards to successful
"Many so-called malpractice claims are the result of a bad
outcome. They are situations where the patient is unhappy with the results but that
doesn't mean the doctor did anything wrong," Naveau said, adding that he does not
think juries should be able to award unlimited sums of money to successful plaintiffs for
"Clearly, awards are going up," Dr. Jim Schwieterman said,
citing recent high-profile cases where the victim of a pharmacist accused of watering down
cancer drugs was awarded more than $2 billion. A recent lawsuit against big tobacco netted
more than $3 billion, he said. "These are amounts that were unheard of 10 years
Just the looming specter of a malpractice claim costs patients money,
the doctors said. More "defensive medicine" tests and procedures are ordered by
physicians today, simply so that they have legal bases covered if they were to be sued.
But the Academy of Trial Lawyers says frivolous lawsuits and large jury
awards are not the insurance industry's biggest financial headache. Bad investments are,
it claims. Todaro cited as an example in his Dispatch column that St. Paul Insurance Co. -
which recently closed its malpractice liability business - lost $108 million through
investments in the failed Enron Corp. Something must be done
Dr. Richard G. Roberts, writing for this month's edition of Family
Practice Management, a trade publication, reasons that a couple of events came together to
form a "perfect storm" in 2001 that battered the insurance industry. With rising
loss ratios - which means that claims were exceeding premiums - and investments losing
money, insurance carriers were financially ravaged, Roberts said.
"Consequently, major carriers decided to leave the market,"
Roberts wrote, citing St. Paul Insurance Co. as one of the biggest casualties. The company
pulled out of the malpractice insurance business after losing $1 billion in 2001.
Because the insurance crisis varies in severity from state-to-state,
that is a good indication that changes in state law could alleviate the financial
pressures doctors are under, Jordan said. The fact that Indiana has virtually none of the
problems Ohio doctors are battling is another indicator, he said. But first, the issue has
to be thoroughly studied.
"That's why we need to get into it, to really look at what is
going on," Jordan said. "Maybe it is bad investments by the insurance industry.
Maybe it is too many lawsuits being filed. Both are valid points, but let's get to the
bottom of it and see what we come up with."
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