January 15, 2003 Recent News





Health Care Spending



The surgeons of West Virginia finally woke up.  Many surgeons went on an extended holiday of thirty days.  This cancels all but emergency surgery in the state.  This will force the legislature into action on tort reform.  This is especially true if another group takes thirty days off when these surgeons return.  

This move has caused quite a stir.  I have read editorials stating this will encourage universal (socialized) medicine.  On the other extreme articles have been written stating that this will increase availability of physicians.

The West Virginia Governor, who has had ample time to push the legislature, is calling for the surgeons to go back to work. I hope they don't.  The West Virginia trial lawyers think the current cap of $1 million for non-economic damages is just fine.  They state that California's $250,000 cap if adjusted for inflation would now be $1.2 million.  Their logic is flawed since the cap is not adjusted for inflation and the courts of the state have stated that no rise for inflation is constitutional.  The average payout in California is over $50,000 lower than in West Virginia.

Governor Wise of West Virginia has recommended a $500,000 cap on malpractice arising from trauma care if not reckless and willful as in Nevada.  Also, he  asked for a reduction of an non-economic cap from the current $1 million to between $250,000 or three times economic damages up to a maximum of $350,000. He will also get rid of the unfair law that if a physician is tagged with part of the fault they may have to pay all the award.  This will now be only that amount percentage that the physician is at fault. He also wants the jury to know the collateral source of payments from health insurance.  The Republicans are poised to bring their own bill to the legislature if the Governor does not put in enough reforms. 

As the Governor explained this in the State of the State Address, other West Virginia surgeons considered joining the walkout.  Most physicians don't believe the words of the Governor, and will await what actually comes out of the legislature.

After the address, the state house judiciary committee put out their own version of reform.  It included a $250,000 cap on non-economic damages but this would be increased annually for inflation.  It did keep the $500,000 max liability from trauma care.  They also canned the Governors $20 million relief fund to help pay for premiums with a less generous income tax credit.

The physicians are also starting a campaign to get rid of a state supreme court justice.  The legislators agreed that for any law to change, the supreme court makeup must change.  

In Virginia, Mississippi and Alabama, Reciprocal Of America, the malpractice insurer for many hospitals is insolvent.  They are attempting to get a loan but if not the hospitals need to find new insurance.  Good luck.  

In Pennsylvania the surgeons were to also go on leave but didn't.  This may  have been due to the new Governor's rhetoric to attempt to alleviate the problem when he takes office in three weeks.  It definitely was not due to the abusive letter sent by the State Idiot to the physicians reminding them of abandonment.  

Georgia may be next.  The rates in the state are rising dramatically.  The state has a new governor who might be more business friendly and help tort reform in general.  Currently almost 20% of the state's physicians are stopping high risk procedures to decrease their malpractice premium.  The attorneys state it is the insurance companies.  The insurance companies state it is the lawyers.  The largest malpractice company in the state has had a 35% increase in the average claim paid during the past year.  The average claim paid if the case goes to court is over $3 million.  They state they pay out $1.17 for each dollar taken in with premiums.  At this time not only are some physicians either retiring early or leaving the state but new business is not entering the state due to the tort problem, states Insurance Commissioner Oxendine.  

In South Florida the war continues.  The physicians continue to pay huge premiums but are unable to recoup from the patients or insurance companies.  A recent study showed 44% of physicians have stopped doing high risk procedures, 66% are increasing testing to protect themselves and 33% are increasing patient wait times for office visits.  Over half of the physicians are now considering going without insurance which is legal in Florida.  The high risk procedures that are being curtailed are spinal surgery, mammography readings, joint replacements and OB. 

In Bradenton, Florida there are five nephrologists.  Only one continued to practice.  The other four had no malpractice insurance since the beginning of the year.  Two got   coverage soon afterwards at large premium increases.  The last two physicians to get insurance paid double and dropped placing shunts and renal biopsies.  The hospital that these physicians work have allowed self insurance but the physicians are afraid of potential financial ruin.  

Missouri, the show me state, wants to be shown the way to lower malpractice premiums.  The physicians have received a 60% premium increase.  

Tort Reform? We don't need no stinkin' tort reform.  So say Houston Texas attorneys.  What we need is less doctors.  The Texas Medical Board should get rid of doctors who have claims by getting more money for investigations.  

South Carolina has low malpractice rates but they are about to increase.  They have gone up 400% in the last two years.  The medical association wants to head off problems in the state by meeting with legislators and the trial attorneys early to forge a compromise.  If that does not work these physicians will be in the same boat as its neighbor, West Virginia.

My Gawd!  Malpractice insurance problems have even hit the People's Republic of Massachusetts.  There is a growing number of physicians that are dropping high risk procedures, such as OB. In the western part of the People's Republic there is difficulty in the hiring and keeping of OBs due to the malpractice climate.  This is not true in Boston as the physicians are more shielded due to the academic centers.   

A study of the two malpractice reform legislation currently in the  New Jersey legislature found that if the combined bills passed, the malpractice premium paid per physician would rise, not decrease.  Half of the measure would help decrease the premiums while the other half would increase rates.  The net effect would be an increase.  The study stated that early discovery prior to filing a suit to drop physicians not actually involved would add costs.  Also increasing costs would be a provision to have all, not just serious, errors reported to hospital committees for consideration.  There does not look like any type of cap on damages with the make-up of the Democratic legislature.  If a bill passes without caps, there will probably be an exodus to other states of physicians. 

Hey Oregon, nice to hear from you.  The medicos there are beginning their own tort reform battle.  Tort reform was passed in Oregon in the late 1990s but the state supreme court turned down the $500,000 cap on non-economic damages.  The premiums are dramatically increasing as are the payouts per claim.  The trial lawyers blame the insurance companies for the increase but agree that the claim payout has increased.  They state this is because of the increasing severity of the harm, a spurious argument. The large malpractice insurer in the state has put a moratorium on new policies for OBs, FPs and CNPs in groups with under five physicians.  When the situation gets bad enough, these physicians will need to stop the practice of OB and even join their colleagues in West Virginia who recently went on a leave of absence and their California cousins who went on strike in 1975 to get their tort reform passed.      Top 


The Bush administration has created an unfunded mandate that may hurt people and cost alot of money.  The smallpox inoculation mandate for service personnel and voluntary for medical personnel is foolish in general and will affect all available medical care by taking away monies which could have been spent for more worthy programs.  The Homeland Security Act also gives liability protection to physicians and makers of the vaccine. This is done by making these people federal employees and forcing patients to prove negligence under the Federal Tort Claim Act.  Hospitals are not protected from liability unless they are the ones doing the actual vaccinations.  If the inoculations are part of a military action, healthcare insurers may not pay.

The other major problem is what to do with the medical personnel that are inoculated.  As the cowpox is transmittable for about three weeks, these people should not come into contact with any patients during that period.  

Grady Hospital and Virginia Commonwealth University have decided not to vaccinate their healthcare workers.  Others will follow.            Top


California physicians are getting out of the HMO business.  Only 58% of the physicians are taking new HMO patients.  This can be done in the state since the HMOs are prohibited from owning physician practices.  In 2002 about 51% of commercial insurance customers were in HMOs and 16 of the 26 HMO plans lost members.  About 2000 physicians have dropped all managed care plans.  

Ohio HMOs are also losing enrollment.  In the first half of 2002 they lost 5.3%, mostly in commercial plans.  The only HMOs that significantly gained were the Medicaid HMOs.  They also increase their premiums by about 17% which will cause more to drop out, a never ending spiral.  

Piedmont Hospital physicians in Buckhead, Georgia have returned to Aetna.  They broke off after their negotiator Promina Health negotiated a poor contract.  The original refused contract called for a decrease in reimbursement.  The physicians now negotiated themselves and got a increase in fees.  This contract has some stability with a three year term.  The insurance company saved some face by stating the physicians had demanded an increase significantly higher than the market. This may be a lesson to other large groups to do their own contracts and not use an intermediary.  Nobody knows the costs better than the physicians. 

In rural Butte County, California the local IPA is closing its doors.  The reason is that there is only one HMO, Blue Cross, left in the area.  It does not pay to continue the IPA for one insurer.  The patients will go to the same doctors but under a PPO arrangement under a short term arrangement.  In the long term Blue Cross may petition the California Department of Managed Care to drop its HMO from the county. 

Medicare HMOs are warning the government that an additional 670,000 people will have their care disrupted if the HMOs don't get more money for care (or profits).  The industry states that people want the HMO program at the same time that the enrollment has dropped by 1,300,000 in the past two years. 

The AMA reports that HMOs are continuing to ease gatekeeper restrictions to healthcare.  It has been found that it does not reduce costs and does increase provider and consumer frustration and dislike for the HMO system.  It was found that only 4%-7% of patients who could self refer did so.  This means a small increase in costs and an offsetting decrease in administrative costs.      Top


Tenet Healthcare has voluntarily agreed to stop their increased billing to Medicare for the outlier program.  They will take a $700 million hit this year on that decision. This may drop their stock dramatically.  However, it did not stop the Feds from filing suit for $323 million for their actions.  I don't know whether they will fight it or not but they should since they did nothing not allowed by the Byzantine Medicare regs.      Top

Health Care Spending

In 2001 healthcare spending rose 8.7%, the largest increase in ten years.  This now accounts for 14.1% of the GNP.  The two largest parts of te increase are pharmaceuticals and hospitals.  The hospitals are making up for past losses by banding together to get higher prices from the stingy HMOs.  These companies, which do nothing except act as a go-between and suck money out of the system, have continued to raise premiums and deliver less benefits.  The HMOs blame, and with justification, the government for many of the financial ills.  The government continues to throw unfunded mandates on all sectors. 

I love Massachusetts.  These legislators are probably the most out of touch individuals in the country. When they passed the tax of $1.30 on all prescriptions in the state, they did not state who would pay the tax.  The pharmacies said the consumer will pay and put up signs that if you don't like it call your representative.  Apparently some did.  One of the People's Republic finest now states he will introduce a bill that the tax can not be passed to the consumer. An idiot in the Department of Insurance stated that consumers will be told which pharmacies are not charging the patient the tax and will be directed to them.  She also said that the consumer could bypass the tax altogether by using mail order pharmacies.  She forgot the reason for the tax was to make money for the state's giant welfare program.           Top


Texas is considering a mandatory competency exam or proof of proficiency when renewing their licenses.  The law placed in the state legislative hopper would be to ensure all have sufficient knowledge regarding current medical technology and other developments in the practice of medicine.  The state legislator who introduced the bill stated that she does not want a proficiency exam unless their has been hearings on the issue.  The Texas Board wants the exam by 2006 but does not know how it would be funded.  Both California and Nevada are also considering the use of medical school type exams, which test nothing.        Top


DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.