Better Policing Could Stem Medical Malpractice Insurance Crisis

The every ten years of malpractice insurance crisis is off and running. Insurance companies are canceling policies for some specialists or raising their premium two, three, four even six fold. One Maryland physician, with a clean record, saw his insurance bill this year go from $6000 to over $40,000. Physicians in some states, such as New York, have marched on state legislatures demanding that victims of malpractice be restricted both in their rights to sue and in how much they can recover.
Yet when one looks at the data, the overwhelming causes of the malpractice insurance crisis are (1) malpractice, (2) poor underwriting practices by insurance companies and (3) very weak disciplining of incompetent or negligent physicians by hospitals, medical societies, state licensing boards and federal peer review agencies.

Several medical groups have estimated that, of the 400,000 practicing doctors in the U.S., anywhere from 20,000 to 55,000 of these people are either alcoholics, drug addicts, mentally ill, infirm or grossly incompetent. Last year, it took the U.S. Postal Service to uncover the fact that over two thousand individuals were working as physicians after buying phony medical degrees through the mails. Neither state regulatory agencies nor the self-policing units of the medical profession found them.

Medical licensing boards in the 50 states and the District of Columbia revoked, suspended or put on probation only 563 doctors in 1983. New York, with the biggest increase in malpractice premiums, has one of the lowest rates of doctor discipline in the United States — 1/10th of the rate of disciplinary actions in Utah. Although malpractice verdicts and settlements amount to less than 1% of the nation’s total health bill, malpractice produces other costs such as more hospital stays, rehabilitation services and disability payments.

Instead of cracking down on medical incompetents, state medical societies and their lobbyists have declared war on malpractice victims and their lawyers. Instead of moving to spotlight and remove the bad actors in their profession, competent physicians allow themselves to be dunned for legislative war chests to reduce victims’ rights.

Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group asks: “Why should the many excellent physicians who have not had adverse malpractice adjudications or settlements against them have to subsidize the premiums of their less competent colleagues who now pay the same as they? There is a tremendous and dangerous gap between the amount of malpractice — negligent doctor behavior resulting in injury or death — and the amount of doctor discipline.”

Far more malpractice cases occur than ever reach the lawyers. In one California study, only 1 in 10 cases of malpractice occurring to people inside hospitals in which the patient would probably prevail, are actually brought to litigation. Based on 1984 data from the American Medical Association (which at last wants to get tougher on bad physicians), there were about 16,400 patient awards or settlements in malpractice suits. It is also not easy, by the way, for an injured plaintiff to win a case in court against a physician, statistics show.

One woman in a small town in Oklahoma found she could not obtain services from physicians in the area because they learned that she was seeking legal advice in a malpractice claim against one of their colleagues. In Mississippi, the Professional Review Organization (PRO) found that in 1983 doctors in that state performed 35 “inappropriate” leg amputations on Medicare patients. And there are unfortunately all too many reports of similar horror stories elsewhere.

What can be done about the incompetent doctor? Dr. Wolfe recommends the following:

1. Pass stronger legislation in states to expand the size and strength of the licensing (doctor discipline) function.
2. Raise the annual license fee for doctors and use the revenues to improve the monitoring and evaluation of physician competence.
3. Insurance companies should experience-rate doctors so the good doctors stop subsidizing the ones with worse performance records.
4. Require attorneys to turn over to state licensing boards information about doctors after patients prevail in a malpractice suit. Now, the terms of settlement by the defendant and his/her insurance company often prevent the transfer of this information.
5. Require other data, such as those collected by PROs, be made part of doctors’ files in the state licensing bureaus.
6. Require periodic and thorough recertification of doctors.

Over the next twelve months, the physicians’ and insurance lobbies will be all over the state legislatures to curtail victim’s rights to sue and obtain an adequate award. These lobbies are recklessly going after symptoms, when the disease is the gross lack of disciplinary action against those physicians who should not he practicing medicine at all.

(For a copy of Dr. Wolfe’s full report, write him at 2000 P Street, NW, Washington, DC, 20036. Please include 50 cents in postage.)