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Med-Mal and Tort Reform in the News
An article in the May 17, 2008 edition of The Wall Street Journal online, titled "Why Doctors Are Heading to Texas", credits tort reform as the reason 7,000 physicians have flooded into Texas in the past few years.  The writer, Joseph Nixon, attributes the 2003 enactment of a $250,000 non-economic damage cap along with other tort reforms in 2003 and 2005 as the reason for the influx of doctors into urban, rural and underserved areas of the state.  Nixon also cites a dramatic reduction in liability insurance premiums and increase in hospital charity care resources as direct benefits of tort reform.  Regarding the latter, he writes that Christus Health, a nonprofit Catholic health system, has saved in four year $100 million it would have spent on premiums and lawsuit defense.

 Ohio Obstetricians Still Paying High Medical Liability Rates
 A study by the Associated Press in March 2008 found that medical liability rates remain near historical highs, and that the number of doctors listing obstetrics and gynecology as their primary specialty has dropped 5% from 2002.  The report found that obstetricians in the Cleveland area were paying a base rate of $194,293 to one large insurer, compared with $84,029 in 2001.  While the article notes the enactment in 2005 of a cap on non-economic damages, it fails to note that the Ohio Supreme Court has not ruled on the constitutionality of that cap, thereby making it difficult for actuaries to predict future settlements and verdicts and the rates that must be charged to eventually pay them.  Find the AP article at http://blog.cleveland.com/medical/2008/03/five_years_later_falling_insur.html.

AMA:  Damage Caps Work
Medical liability premiums are on average at least 17% lower and the supply of physicians in high-risk specialties 4%-7% higher in states with caps on non-economic damages, according to a report released yesterday by the American Medical Association. The report summarizes the research on medical liability reform since 2006, including one study that suggests a $250,000 cap on non-economic damages would reduce medical liability premiums nationally by $1.4 billion. The report is posted at www.ama-assn.org/ama1/pub/upload/mm/363/prp2007-1.pdf.

California Med Mal Cap Continues to Work
 The Los Angeles Times reported in late December 2007 that malpractice lawsuits in California "appear to have dropped significantly since the state capped pain and suffering awards"  at $250,000.  Filings dropped 48% in Los Angeles and 29% in Orange County since 2001, and the number of suits was down in eight of the 10 largest counties.  Malpractice premiums had risen by one-third the national average since 1991 when the non-economic damage cap was adopted.

Towers Perrin 2006 Tort Costs:  Up for Medical Malpractice Despite Decrease for Total Tort Costs
 While Total U.S. Tort Costs during 2006 dropped by 5.5%, medical malpractice costs continued to climb--from $29.4 billion in 2005 to $30.3 billion for 2006.  Medical malpractice tort costs have increased since 1975 at an annual rate of 11.1% compared to 8.2% for all other tort costs.  A Towers Perrin spokesman suggested the moderation in medical malpractice costs may be a "reflection of reforms enacted by several states."  Total tort costs were about $825 per person during 2006, with a nine fold increase since 1950 after adjusting for inflation--a growth rate that "far exceeds U.S. population growth."  Find the study, issued in December 2007, on the www.towersperrin.com website.

Ohio Med Mal Insurance Rates Drop Slightly
 The Ohio Department of Insurance reports that rates for physician liability insurance have dropped slightly in 2007, averaging a 6.4% drop for the five insurers with a majority of the Ohio market.  ODI reports the average decrease for the top five companies is 6.4%, following a 1.7% decrease in rates for 2006.  The modest decreases follow annual increases as high as 31% between 2002 and 2005.  The rate reduction is attributed to a variety of factors including tort reform and improved economic conditions.  Rates for specialties such as obstetrics and neurosurgery can exceed $100,000.  See http://cincinnati.bizjournals.com/cincinnati/stories/2007/10/15/story8.html for more information.

Ten Cents of Every Healthcare Insurance Dollar Spent on Liability and Defensive Medicine
The international financial consulting firm PriceWaterhouseCoopers estimates that ten percent of every dollar spent on health insurance premiums is attributed to the costs of liability and defensive medicine. (“The Factors Fueling Rising Healthcare Costs 2006” PriceWaterhouseCoopers, January 2006).  The report is posted at
http://www.pwc.com/extweb/pwcpublications.nsf/docid/BB82984D3A7DF2A485257267003C98BC

Ohio ACOG Section:  OBs Still Leaving
The Ohio section of the American College of Obstetricians and Gynecologists (ACOG) surveyed the state's 900 obstetricians/gynecologists and found that 67% had dropped obstetrics or reduced the amount of high risk care they accept.  Over 100 OB-Gyns reported leaving the state or retiring early.  ACOG reports "the reason is the prohibitive cost of medical liability insurance and the extremely high cost of 'tail coverage' due to the long statute of limitations in Ohio."  Rates reportedly range as high as $211,000, and tail coverage rates range as high as $400,000.  More information may be available from www.acog.org.

Influx of Doctors in Texas Confirms Importance of Reform
 The Texas Press Association reported March 1, 2007 that enactment of a $250,000 non-economic damage cap in 2003 has led to a backlog of out-of-state doctors seeking a Texas medical license.  A record 4, 2036 applications were received by the Texas Medical Board in 2006, 34% more than in 2005.  82% of applicants are from other states such as New York, Florida, Illinois and Pennsylvania.  See www.texaspress.com/pressreleases/nixon030107.html.

 

Defensive Medicine Pegged at $124 Billion, Creates 3.4 Million Uninsured
A report from the Pacific Research Institute issued March 27, 2007 finds that medical liability concerns result in $124 billion in defensive medicine expenditures, which increased the number of uninsured by 3.4 million.  The report estimates direct and indirect tort system costs at $865 billion a year or more than $9,800 per family.  Tort reform is recommended to make the tort system more efficient and less costly.  The article is available at www.pacificresearch.org.

AMA Report shows Damage Caps Work
 The American Medical Association issued a report showing that non-economic damage caps on medical malpractice verdicts slow losses and improve the supply of physicians in a state.  "Clearly, the body of research on the impacts of tort reform shows that caps have resulted in lower growth in medical liability losses in states that passed caps than in states that did not.  The report is available through the AMA web site at www.ama-assn.org/ama1/pub/upload/mm/363/prp200502caps.pdf.

 

Texas Tort Reform Results in More Doctors

Medical liability reforms enacted in Texas in 2003 have resulted in more physicians, and more of them willing to accept patients with complex problems, according to a recent survey by the Texas Medical Association.  Because of the reforms, TMA says it has been easier to recruit high-risk specialists such as physicians specializing in emergency medicine, obstetrics, orthopedic surgery and neurosurgery.  The report is posted at http://www.texmed.org/Template.aspx?id=5245.

Manhattan Institute:  Med Mal Premiums Due to Payouts
The cost of medical malpractice insurance in New York was linked directly to the state’s malpractice litigation awards and not the cyclical nature of insurance pricing, according to a study issued by the nonpartisan Manhattan Institute’s Center for Legal Progress.  Other findings include a showing that premiums are not explained by insurance industry gouging, and that “malpractice tort awards and thus insurance premiums can vary dramatically for reason having little or nothing to do with negligence.”  The study is posted at www.manhattan-institute.org/html/cjr_10.htm.

Ohio Med Mal Market Stabalizing
Ohio’s medical liability insurance rates continue to stabilize after years of skyrocketing growth, according to the Ohio Department of Insurance (ODI) in its announcement that three of the five largest medical liability insurers have decreased rates by an average of 1.5 percent in 2006. In 2005, medical liability rates increased by 6.7 percent, following rate increases of 20 percent in 2004 and about 30 percent in each of 2002 and 2003. View an ODI news release.

Meritless Claims and a Costly System
 About 40 percent of the medical liability cases filed in the U.S. are groundless, according to a Harvard School of Public Health study published in the New England Journal of Medicine (NEJM) on May 11, 2006. The study found three percent of claims analyzed were filed by patients who had no injury and 37 percent of cases lacked evidence of a medical mistake. In general, the study found that some meritless claims were paid while some meritorious claims were not paid. The study also found that 54 cents of every dollar spent by the system went to administrative expenses, including lawyers, experts and court costs. The NEJM article is available online at http://content.nejm.org/cgi/content/full/354/19/2024.

Majority of Americans Support Medical Liability Reform
 Three-quarters of Americans want their elected representatives to support comprehensive medical liability reform, including reasonable limits on non-economic damages, according to a new survey by Harris Interactive for the Health Coalition on Liability and Access. A similar proportion of respondents believe their access to affordable, high-quality health care is threatened because medical liability costs are forcing doctors out of medicine, while 64 percent said medical liability lawsuits are one of the primary reasons behind rising health care costs. The poll results are posted at www.hcla.org/releases.html.

Non-Economic Damage Cap Working in Texas
The Doctors Company, one of the largest insurers of physician medical malpractice coverage, announced in March 2006 an average 18 percent reduction in physician insurance rates in Texas. The reduction follows a 14 percent reduction, on average, made during 2005. Additionally, Texas has seen an increase in the number of specialists such as obstetricians, orthopedic surgeons and emergency medicine specialists since 2004. In announcing the 2006 rate reduction, The Doctors Company attributed the rate reductions and increased number of specialists to passage by Texas voters of a $250,000 non-economic damage cap in 2004.

Tillinghast Issues 2005 Tort Costs Update
The Tillinghast financial consulting arm of Towers Perrin issued its latest assessment of U.S. Tort Costs, based upon data available through 2004.  $260 billion, or $886 per person, was the cost of the U.S. tort system for the U.S. during 2004—an increase of 5.9% over 2003. Medical malpractice tort costs in 2004 were approximately $28.7 billion, 8.5% over medical malpractice costs in 2003. Tillinghast forecast continuing increases with the amount depending, in part, upon the effectiveness of recent medical malpractice reforms enacted by various states.  The report is posted at www.towersperrin.com/tillinghast/publications/reports/2005_Tort_Cost/2005_Tort.pdf.

AMA Rejects “Angoff Report”
The American Medical Association (AMA) issued an assessment of the “Angoff Report,” calling it a “misrepresentation of the medical liability insurance industry." The AMA statement cites insurance industry experts as finding that “the financial measures that Angoff looks at are meaningless, if not misleading, and his conclusions are without merit.” The AMA analysis is posted at www.ama-assn.org/ama1/pub/upload/mm/363/angoff-prp.pdf.

Insurance Department Reports Lower Med Mal Rate Increases for 2005
Ohio Department of Insurance Director Ann Womer Benjamin announced that the medical liability insurance rates of Ohio`s top five medical malpractice insurers, which represent 66% of the market, increased only 6.7% in 2005, following rate increases of 20% in 2004 and about 30% in each of 2002 and 2003, according to an ODI news release.

Plaintiff Lawyers Issue Another Sham Report
Medical malpractice plaintiff lawyers issued in December 2005 another specious report claiming that medical malpractice insurance companies filed erroneous information with state insurance agencies in order to justify the dramatic rate increases in recent years. The report was issued by the Foundation for Taxpayer and Consumer Rights and concludes that from 1986 to 1994 the industry reported to regulators losses of $39.6 billion but actually paid only $26.7 billion, 31 percent less. The Physician Insurers Association of America responded with a letter.

American Academy of Actuaries Calls Angoff Report "Unsound"
The American Academy of Actuaries (Academy) took the rare step of issuing a statement regarding the "Angoff" report, which asserts that medical liability insurance companies have caused the insurance crisis and have been profiting at the expense of physicians and hospitals. The Academy calls the Angoff report "incomplete, actuarially unsound, and misleading". The Academy is a non-profit, professional membership organization founded in 1965 and currently with 15,000 members.

HCLA Study Refutes Angoff Study: Medical Liability Crisis Not Caused by Insurers
A comprehensive analysis of the financial performance of the medical liability insurance industry by two of the nation’s top academic experts found no evidence that medical liability insurance is overpriced or that insurance companies are to blame for an insurance crisis that is forcing doctors of medicine.  The Angoff study was called “critically flawed” with “errors and shortcomings.”  The study was done at the request of the Health Care Liability Alliance and is posted on its web site at www.hcla.org.  

 

PIAA: "Angoff report is a hoax"
Independent actuaries with the firm Towers Perrin found that a July 2005 report released by the Center for Justice and Democracy and five other “consumer groups” is incomplete and unsound. Jay Angoff, an attorney employed by a personal injury law firm, performed the analysis which found that insurers were profiting at the expense of physicians and that there was no medical liability insurance crisis. See a press release from the Physician Insurers Association of American and the actuarial report issued by Towers Perrin.
 

 

PIAA and Others Refute Report Issued by Plaintiff Lawyers

The Center for Justice and Democracy, a nonprofit organization receiving much of its support from plaintiff lawyers, commissioned a report released in July 2005 that asserted medical malpractice claim payments are decreasing while premiums are rising. The Physician Insurers Association of America has created talking points that demonstrate the inadequacies and misrepresentations in the report.

ACEP Journal Reports Evidence of Defensive Medicine
Fear of malpractice litigation appears to affect emergency department physicians' treatment decisions in evaluating patients with a possible acute heart condition, suggests a study in the on-line Annals of Emergency Medicine, the Journal of the American College of Emergency Physicians. Released July 13, 2005, the study found that physicians with the greatest fear of malpractice litigation, as identified by their responses to a questionnaire, were less likely to discharge low-risk patients, more likely to admit patients to a monitored bed, and more likely to order diagnostic tests such as chest radiography. The report can be accessed through the ACEP Web site at http://www.acep.org/webportal.

Defensive Medicine is Prevalent Among Specialists in Litigious Environment
A survey of physicians in six specialties at high risk of litigation (emergency medicine, general surgery, orthopedic surgery, neurosurgery, obstetrics/gynecology, and radiology) in Pennsylvania in May 2003 found that defensive medicine is highly prevalent, with potentially serious implications for cost, access, and both technical and interpersonal quality of care. The study is reported in the June 1, 2005 issue of the Journal of the American Medical Association.  See http://jama.ama-assn.org/

Physician supply increases in states with malpractice award caps
States that have capped malpractice lawsuit awards have seen a larger growth in the number of practicing physicians than states without such caps according to a new study. Researchers at the Agency for Healthcare Research and Quality found that between 1970 and 2000 the number of physicians per 100,000 residents more than doubled in the 13 states that enacted caps on non-economic damages during the 1980s, compared with an 83 percent physician growth rate in the 23 states that didn't cap malpractice awards before 2000. The study, "Have State Caps on Malpractice Awards Increased the Supply of Physicians?" was published in the May 31, 2005 Health Affairs. See www.ahrq.gov.

Ohio Medical Malpractice Commission Final Report
The final report of the Ohio Medical Malpractice Commission was issued April 27, 2005 and “strongly recommends” that the California-style tort reforms (e.g., cap on non-economic damages) in SB 281 remain in effect. While the commission considered it too soon to measures the effects of SB 281, it found that evidence in states with similar tort reform indicated it would stabilize the medical liability insurance market. The commission also recommended formation of a “patient safety center” and recommended against formation of a state-run patient compensation fund at the present time due to unsatisfactory savings. See www.ohioinsurance.gov/agent/medmal.htm for the other findings and recommendations.

Coalition Finds California Tort Reform Effective
 A study released in February 2005 concludes that California's medical liability reform law adopted in the 1970s accounts for the relatively low growth in medical malpractice insurance costs in California and that any increase in the amount of the $250,000 non-economic damage cap would reduce access to care. The report is posted atwww.micra.org/MICRAStudy22805.pdf.

Health Care at the Crossroads: Strategies for Improving the Medical
Liability System and Preventing Patient Injury
The Joint Commission on Accreditation of Healthcare Organizations has issued a call to action in its newest public policy white paper to reform the nation's medical
liability system, urging that the current proposal for caps on non-economic damages be expanded to pursue intermediate and long-term system changes to facilitate improvements in patient safety.
 http://www.jcaho.org/news+room/news+release+archives/jcaho_0210_05.htm

Medical Malpractice Costs Outpace Overall Tort Costs
 Tillinghast Towers Perrin has released its "U.S. Tort Costs: 2004 Update" that reports a 5.4% increase in tort costs for 2003. Tort costs for that year totaled $246 billion, or $845 per person in the U.S. Medical malpractice costs continued to outpace overall U.S. tort costs, with an increase of 11.8% as compared to 9.2% for all other tort costs dating from the 1970s when medical malpractice costs were first separately tabulated. www.towersperrin.com/tillinghast/publications/reports/Tort_2004/Tort.pdf

DHHS OIG Approves Hospital's Proposal To Subsidize Neurosurgeons’ Medical Malpractice Premiums
 The Department of Health and Human Services Office of Inspector General (OIG) said a proposal by a hospital to subsidize malpractice insurance premiums for two neurosurgeons on the hospital's staff could potentially generate prohibited remuneration under the Anti-Kickback Statute, but that it would not impose administrative sanctions in connection with the arrangement. The OIG determined that the arrangement was implemented as a temporary measure to assure that neurological services are available in the community. To read the Advisory Opinion, go to www.healthlawyers.org/docs/ask2005/AO_0419.pdf.

DHHS OIG Approves Hospital's Proposal To Subsidize Obstetricians' Medical Malpractice Premiums
 The Department of Health and Human Services Office of Inspector General (OIG) said a proposal by a hospital to subsidize malpractice insurance premiums for obstetricians on the hospital's staff could potentially generate prohibited remuneration under the Anti-Kickback Statute, but that it would not impose administrative sanctions in connection with the arrangement. The OIG determined that the arrangement was implemented to assure that obstetrical services are available in the community. To read the Advisory Opinion, go to www.oig.hhs.gov/fraud/docs/advisoryopinions/2004/ao0411.pdf.

Rising Liability Insurance Costs Linked with Reduced Access to Care
Rising professional liability insurance costs have reduced the availability of health care services in rural Florida, according to a study in the Nov. 8, 2004, Archives of Internal Medicine. Researchers surveyed 781 physicians practicing in rural areas of the state in 2003, and found more than half (52.6%) had decreased or eliminated health care services in the past year. The researchers found professional liability premiums rose an average of 93.5% in the state, and said difficulty finding or paying for the insurance was an important factor cited by those reducing or eliminating services or planning to leave the community in the next two years.

Increasing Premiums Threaten Primary Care
A survey by the Medical Group Management Association found the average increase in the cost of medical liability insurance for a full-time equivalent physician in a medical group practice in 2003 ranged from 5.9 percent for neurological surgeons to as high as 49.2 percent for anesthesiologists, with many liability crisis states experiencing larger increases. The report indicates that many practices were forced to take cost-cutting measures such as reducing support staff, potentially reducing access to primary care. www.mgma.com/press/2004cost.cfm

Tort Reform Working in Texas
A survey of member hospitals by the Texas Hospital Association found that the frequency of lawsuits and amount of premiums have fallen since the Texas legislature enacted a non-economic damage cap in 2003. Texas voters narrowly passed a constitutional amendment protecting the damage cap. The results of the survey are posted on the Texas Hospital Association Web site at www.thaonline.com.

Americans Say Health Care Access Threatened by Liability Crisis
A new poll released April 7, 2004 by the Health Coalition on Liability and Access reveals that Americans believe a growing crisis in health care liability is pushing health care costs up and forcing good doctors out of medical practice. By overwhelming margins, 82 percent of Americans say their ability to get the health care they need is threatened by excessive litigation. For more, visit www.hcla.org/pressreleases/2004-HCLAPollRelease.pdf

Medical group practices report continued liability cost increases
The average increase in the cost of professional liability insurance for a full-time-equivalent physician in a medical group practice in 2003 ranged from 49.2% for anesthesiologists to 5.9% for neurological surgeons, with many liability crisis states experiencing larger increases, according to the latest annual cost survey by the Medical Group Management Association. That follows average increases in 2002 ranging from 43.89% per physician in hospital-owned multi-specialty practices to 7.63% per physician in internal medicine practices. For more on the 2004 cost survey, based on 2003 data, visit www.mgma.com/press/2004cost.cfm.

Congressional Budget Office Finds Studies Validate Tort Reform
In June 2004, the Congressional Budget Office issued a report in which it examined the effects of tort reform as measured by various researchers. "A number of those studies have found that state-level tort reforms have decreased the number of lawsuits filed, lowered the value of insurance claims and damage awards, and increased insurers' profitability as measured by payouts relative to premiums in the short run." CBO noted its findings should be used cautiously given the limited number of studies. http://www.cbo.gov/showdoc.cfm?index=5549&sequence=0

Medical Malpractice Insurance Myths Debunked
Lawrence E. Smarr, president of the Physicians Insurer Association of America, debunks common arguments advanced by personal injury lawyers in remarks made to the American College of Surgeons: there is an insurance crisis, it did not result from stock market losses, California's tort reform including damage caps is successful, and more. http://www.facs.org/about/chapters/smarr.pdf

Survey: OB-Gyns Driven from Practice by Medical Liability Crisis
The American College of Obstetricians and Gynecologists surveyed its members in August 2002 and found that 59% of responding Ohio obstetricians had changed their practice because of the medical liability insurance crisis. Practice changes included retirement, relocation, decreased surgical procedures, decreased deliveries, and decreased amount of high risk obstetric care. ACOG estimated that 13,932 pregnant women in Ohio were not able to obtain care from an obstetrician. www.acog.org/

AHRQ: States with Damage Caps Have More Physicians
Researchers at the U.S. Agency for Healthcare Research and Quality (AHRQ)  found that states with caps on noneconomic damages experienced about 12 percent more physicians per capita than states without such a cap--states that adopted a cap averaged 135 physicians per 100,000 citizens per county while states without a cap averaged 120. Moreover, states with relatively high caps were less likely to experience an increase in physician supply than states with lower caps. The study is posted at www.ahrq.gov/research/tortcaps/tortcaps.htm

Insurance Information Institute Report
 Insurance Information Institute summarizes the problem and responses to the medical malpractice crisis in this report dated February 2004, available at www.iii.org/media/hottopics/insurance/medicalmal/

The Economics of U.S. Tort Liability
The Congressional Budget Office issued a study titled "The Economics of U.S. Tort Liability: A Primer" in October 2003. It examines the U.S. tort system from the standpoint of efficiency, equity, and costs, and it examines several options for changing the tort system, available at www.cbo.gov/ftpdoc.cfm?index=4641&type=1 or on this index page: www.cbo.gov/Studies&Rpts.cfm.

Bricker & Eckler, LLP
Information on pending tort reform legislation as tracked by Columbus law firm Bricker & Eckler, LLP.

Bricker & Eckler, LLP Opinion Letter:
Guidelines for Hospitals to Evaluate Insurance Coverages
OHA's Medical Malpractice Insurance Crisis Task Force has twice requested guidelines for hospitals to use, once in 2003 to evaluate insurance coverages and address changes to medical staff bylaw requirements on mandatory physician insurance coverage, and again in 2004 to evaluate alternative risk financing vehicles such as risk retention groups and captives.

Ohio Department of Insurance Issues Guidance on Captive Insurers
ODI advises medical providers of the risks associated with purchasing coverage from captive insurance companies. Read the bulletin

Damage Caps Reduce Liability Insurance Premiums
A report by Kenneth Thorpe, chairman of the health policy and management department at the Emory University Rollins School of Public Health, found that "premiums in states that cap awards are 17.1 percent lower than in states that don’t cap." See the report

Study Validates Cap on Non-Economic Damages as Effective
Pennsylvania Medical Society reported a study by Milliman USA, Inc. examined the impact of a $250,000 cap on damages in Pennsylvania and found the cap would reduce losses and defense costs by 18 percent. Full report

An earlier study by Milliman USA of the benefits of a cap on non-economic damages reported found that from 1990 until 2001 the average medical liability loss per physician was lower in states with caps. Full report

Malpractice Reform: Beyond the Current Debate
Several resources on malpractice reform from the Alliance for Health Reform are available online at www.allhealth.org/event_092903.asp.

ODI Patient Compensation Fund Report
As mandated by Senate Bill 281, tort reform legislation effective in April, the Ohio Department of Insurance (ODI) in May delivered a final report to address the feasibility of a patient compensation fund (PCF). The study looked at similar funds in other states and analyzed its ability to help stabilize Ohio’s medical malpractice insurance marketplace. The report is available at www.ins.state.oh.us/Documents/05-01-03FinalReport.pdf.

Bricker & Eckler Opinion Letters: Mandatory Arbitration
Senate Bill 281 made some changes to Ohio statutes that authorize the use of mandatory arbitration in claims involving medical negligence. The statutes were originally enacted in the 1970s but have not been used. OHA's outside legal counsel, Bricker and Eckler LLP, studied the use of mandatory arbitration, which appears limited by hospitals

GAO Report Finds Losses On Medical Malpractice Claims Are Driving Up Malpractice Premiums
The General Accounting Office (GAO) released a report in June 2003, "Medical Malpractice: Multiple Factors Have Contributed to Increased Premiums" (GAO-03-702), which found that losses on medical malpractice claims are the primary driver of rate increases. Find the report at www.gao.gov

Limiting Damage Awards Would Save Billions
A study by the Employment Policy Foundation estimates that limiting damage awards in medical liability cases could save $54.8 billion to $97.5 billion annually, or 7.2 percent to 12.7 percent of the $764.8 billion spent on hospital and physician services each year. The analysis found significant cost differences between states with non-economic damage award caps and states without limits.For more, go to www.epf.org/.

HHS: Problems Associated With Medical Litigation Sparked by High Jury Awards
A report issued in March 2003 by the Department of Health and Human Services finds problems associated with medical litigation have significantly worsened in the past year, sparked by a rise in million dollar jury awards and settlements, particularly for non-economic damages. The report, "Addressing the New Health Care Crisis," is available at www.hhs.gov/.

Checking the Financial Rating of an Insurer
To check your carrier's financial ratings, visit:

Medical Malpractice Insurance in Ohio: What's Happening?
A presentation by The Premium Group, Inc., to the Ohio Osteopathic Association with Ohio-specific information on jury awards, premiums, market conditions and more. The presentation is online at www.ooanet.org/pdf/premiumgrouppresentation.pdf.

An Unhealthy System:
Doctors Flee as Skyrocketing Malpractice Claims Drive Up Insurance Costs
A report of TrialLawyersInc.com with information about increasing malpractice costs and the nation's crisis states. Find the full report at www.triallawyersinc.com/html/part06.html.

HSC Study Finds Rising Malpractice Premiums Affecting Care in Cleveland and Elsewhere
The Center for Studying Health System Change (HSC) released the results of its study of 12 areas of the country and found, as a result of rapidly rising medical malpractice insurance premiums, physicians in some areas are referring more patients to emergency departments, refusing to provide on-call emergency department coverage, and declining elective referrals. Cleveland was one of the areas studied. The effects of higher premiums are diminished patient access to care and increased healthcare costs. Find the full report at www.hschange.org/CONTENT/605/.

MGMA Finds Liability Premiums Increased Group Practice Costs
Professional liability premiums contributed to increased operating costs for medical group practices in 2002, according to a new report by the Medical Group Management Association. Nationally, cardiologists reported an average 22 percent increase in professional liability cost in 2002, while OB/GYN practices reported a 67 percent increase in professional liability cost between 1998 and 2002. The report notes that many states experienced greater increases. For more on the report, go to www.mgma.com/press/cost2003.cfm.

Med-Mal Programs

Medical Liability Insurance Reimbursement Program
Hospitals and other organizations that operate free clinics are eligible to participate in the state’s Medical Liability Insurance Reimbursement Program, which reimburses 80 percent of premiums paid for medical liability insurance for the clinic, its staff and volunteer health care professionals and workers. To participate in the program, free clinic must register with the Ohio Department of Health by Jan. 31, 2007.
Application

AHA Survey: Tort Reform Works
Legal reforms have slowed the growth of medical liability insurance premiums where they have been enacted, but federal reform is still needed. That was the message in April as the AHA released a survey of 1,000 hospitals on the effects of the nation's liability crisis. In states identified by the American Medical Association as "crisis" states, medical liability expenses have doubled for nearly half of hospitals, costing as much as $11,435 per staffed bed compared with $4,228 in non-crisis states. At a news conference releasing the survey, Gerry Miller, president and CEO of Crozer-Keystone Health System in Springfield, PA, said "something is substantively wrong when a system like Crozer-Keystone spends more on insurance than on all the medications we buy for the patients we care for." And Jeff Curtis, president and CEO of H.S.C. Medical Center in Malvern, AR, said his hospital "had no choice but to discontinue delivering babies" because local doctors could not afford to pay their premiums. Because the crisis is affecting care now, and because many state reforms could take years to accomplish, the AHA is calling for Congress to enact federal reform like that in The HEALTH Act, passed by the House and pending in the Senate (S. 607).

OHA's Providers Re Offers "Rent-a-Captive"
OHA owns Providers Reinsurance domiciled in the Cayman Islands. It is a segregated portfolio company, meaning you can "rent" one of the "cells" and use it to quickly create an off-shore captive either for the hospital or your medical staff. Reportedly you can transfer surplus assets in a hospital's self-insurance trust fund to such a captive. For more information, contact David Haas at OHA, at pdavidh@ohanet.org. Note some of the large insurance brokers offer similar arrangements. http://www.providersre.com.

Ohio Department of Insurance
Information about ODI's Medical Coverage Assistance Program and other useful information is available at www.ohioinsurance.gov. Agendas, minutes, testimony and reports of the department's Medical Malpractice Commission are posted on http://www.ohioinsurance.gov/agent/medmal.htm.

OHA Resources

Related OHA Articles

OHA Bulletins
Alternative Risk Financing and Acceptable Coverage for Medical Staff
    (Bulletin 03-018)  8.29.03
124th General Assembly Enacts Tort Reform (Bulletin 03-002)  2.14.03

Related Links

Questions?
Contact Rick Sites, OHA General Counsel, at ricks@ohanet.org or 614.221.7614.

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© 2001-2008 OHA. Last updated May 21, 2008.
Please direct comments, corrections or additions to: oha@ohanet.org 614.221.7614.