July 15, 2004 News




Medical Records


The AMA has stated that physicians should not refuse to treat patients because of their profession, should not "strike", should not leave their offices to rally without leaving someone behind to care for all the patients,  should not leave practice or part of their practice.  These are the reasons that the majority of physicians do not belong to the AMA unless they have to belong if they belong to the local society.  Most physician believe, and rightly so, that their specialty society represents them more effectively than the AMA.  The AMA does not want to recognize the fact that the only way to the Democratic politician is via pressure.  This includes pressure from patients who will only act if they can not get the routine non-emergency care that they have become accustomed to.  This patient pressure is many fold more important than the physician pressure. There are times when taking the high road is not appropriate.  Sometimes you have to wallow in the mud with the trial lawyers.

The AMA has elected new leaders.  Let's hope they do better than the old ones.

Mississippi and Florida physicians have started to not treat the trial lawyers and their families for non-emergency cases.  They believe it is a conflict of interest and want to reduce their risk of liability. Most do not do it overtly but they make them wait for a month for an appointment or state their practice is closed.  Some do it overtly.  The physician has the right to choose his/her patients.

The Maryland malpractice insurer that covers the majority of physicians in the state has asked for a 41% premium increase.  The reason is escalating claims.  The average claim has almost doubled sine 2000 from about $234,000 to the current $412,000.  The Governor has again called for a special session to address the issue.  The Democrats in charge of the Senate will not pass any tort reform and refuse to call the special session.  Some OBs have stated they will stop delivering and stick to GYN.  The administrator at the Greater Baltimore Medical Center states that about 10% of their OB staff quit delivering babies last year and more are expected to follow this year.

Wyoming is in special legislative session to address the malpractice issue in their state. The surrounding states all have caps and lower premiums.  The physicians of the state are not able to recruit new physician and those that are there are starting to leave. Since there aren't that many to begin with this means 3-4 week waits for patients to see a physician.  

In Illinois, almost 40% of the physicians in the area close to St. Louis have been sued for malpractice.  Most have only been named once which contradicts the theory that only several bad physicians are causing the problem.  In claims paid 70-85% of the claims have been won by the physicians, which says that the attorneys are suing too much.  The legislature is continuing to work on the problem but without the possibility of caps on non-economic damages.  Instead the Democratic controlled legislature is setting higher standard for physicians to serve as experts and protecting personal assets from liability by having twice their insurance amount protected.  These will do nothing to reduce malpractice premiums. 

However, the Illinois Republicans are now playing hardball.  They are refusing to pass the budget unless there is meaningful med mal tort reform passed as well. 

In an answer to the reader's letter below the last remaining neurosurgeon in southern Illinois has sold his house and closed his practice after 13 years of malpractice free medicine.  He is going to another state where they have tort reforms.  His partner left earlier this year for the southeast and had his $200,000 tail for his malpractice insurance paid by the recruiting practice.  The neurosurgeon that is leaving states that if he waits to next year to leave, his tail coverage would be $500,000. 

Next door in Missouri, physicians are starting to place notices in their waiting rooms and to discuss with each patient the malpractice issue.  The main target is the Governor, who has vetoed malpractice reforms for two years in a row.

New York has allowed it's malpractice insurers to raise rates 7% when the insurers wanted over 25%.  At the same time they allowed the state insurance fund which insures physicians who cannot obtain coverage from other sources an increase of 20%.

In Virginia, some of the rural hospitals are closing their obstetric units.  The reason-no one willing to deliver the babies.  The reason- malpractice premiums are too high.  The reason- legislature will not pass reasonable tort reform and low Medicaid reimbursement.  The reason- the Democratic legislators get too much money from the trial lawyers.  The reason- the trial lawyers make too much money from the med mal suits.  The Governor is attempting to solve at least one of the problems by paying OBs more to care for Medicaid patients.  A panel has recommended a 45% raise in pay for Medicaid which currently pays 60% less than commercial rates.

A study recently published but which I have not personally read, reportedly states that California MICRA which limits all non-economic damages to no more than $250,000 is unfair to harmed patients.  The study alleges that the reduction in the non-economic reward for grave injuries was seven times that for non-grave injuries.  I have no idea what a grave injury is.  The author recommends a sliding scale cap.  The abstract doesn't say what the limits of the sliding scale might be.

Some Florida surgeons in the Tampa area have decided to stop doing elective surgery on children due to the long statute of limitations and the malpractice climate.  

The following is an email I received the day my last update came out from a reader in Pennsylvania.  It is being printed verbatim. 

"Mr. Tobias:

If Congress enacts limits on the legal rights of patients, the biggest winner will be the property and casualty insurance industry, which has already seen its profits go up almost 1000 percent in 2003. The losers will be innocent victims with devastating injuries due to medical negligence.

The property/casualty industry's profits rose 997% in 2003! The industry made $29.9 billion in profits last year, almost ten times the $3 billion they made in 2002. (AM Best Statistical Report, Advanced Financial Results, Property Casualty Writers 2003, April 12, 2004; Insurance Services Office & Property Casualty Insurers Association of America, "Sharp Increase in P/C Industry's Net Income Propels Surplus Upward in 2003," April 14, 2004).

The insurance industry's "return on equity in 2004 is likely to soar above double digits for the first time since 1997." (Insurance Information Institute, "Groundhog Forecast for 2004.")

Insurers have refused to lower malpractice insurance premiums after caps and other "tort reforms" have been enacted. States that have enacted legal restrictions have seen their insurance rates continue to shoot up, even after passing severe liability limits (e.g., Florida, Nevada, Ohio, Missouri and Texas).

Legislation to place limits on medical malpractice liability hurts patients by restricting their rights to hold physicians, hospitals, insurance companies, HMOs, and drug and medical device manufacturers accountable for injuries or death resulting from negligent care. The bill will do nothing to make healthcare or medical malpractice insurance more available or more affordable.

A report by the American Medical Association's Board of Trustees to its House of Delegates acknowledged that increasing malpractice insurance premiums were linked to the insurance underwriting cycle.

As for the claim of ever-climbing jury awards, studies of verdicts are skewed by what study sponsors leave in or leave out. The Medical Associations looked only at reported jury verdicts. The Trial Lawyers tracked all verdicts, including non-jury verdicts, through appeals, settlements and court-ordered reductions.

Why is tort reform even on the national agenda yet, at a time when insurance industry profits are booming, tort filings are declining, only 2 percent of injured people sue for compensation, punitive damages are rarely awarded, liability insurance costs for businesses are minuscule, medical malpractice insurance and claims are both less than 1 percent of all health care costs in America, and premium-gouging underwriting practices of the insurance industry have been widely exposed?

Limits on the rights of people hurt by medical malpractice will further victimize them and their families, and it will help neither patients nor doctors. The real beneficiaries will be insurance companies.

And who are the insurance companies? According to the Physician Insurers Association of America, a trade group of about 50 doctor-owned malpractice insurers, they cover about 60% of U.S. doctors in private practice and hospitals. It's the profits of these doctor-owned insurance companies that doctors want to protect.  " 

As one of the original physicians in the Doctor's Company, the first physician owned insurance company in the country, I can say I never cared about the profits or loss of the company, nor did I hear any other physician discussing it.  I did care about my ability to obtain insurance, which I could no longer get via the usual occurrence insurance companies.  The Doctor's Company insured me with something that nobody had heard of in 1975, claims made insurance.  I never remember receiving any money from the company but did receive realistically priced premiums for my insurance.  When I retired from active medical practice, I received my tail coverage for free.  In California, where the tort reform started in 1975 as MICRA, for the past 20 years or so the premiums have been about a 160% increase.  In the remainder of the country the increase has been close to 250%.  Was all this due to MICRA? Doubtful, but a large percentage was.  The other part of the picture is the state law requiring the insurers to justify any raises in premiums.  The reader is correct. It is not all one sided.  The main things MICRA did were to put a $250,000 cap on non-economic damages, set the fees for attorneys, allow the finders of fact to know how much of the medical bills were paid by an insurance company so the person will not be doubly compensated and the periodic payments of future damages if over $50,000.  

The other and most important aspect is societal values.  Unless costs for the physicians are reined in, there will be less physicians practicing the high risk specialties.  This need to be balanced against the limited versus unlimited non-economic damages paid out.  The physician does not pay the award, the insurance company does, but the physicians as a group then must pay the increased premiums without the ability to increase their income for the added expense.  This leads to less OBs, neurosurgeons and others of this ilk, especially those with the most experience since they will either quit or limit their exposure, leading to less care for the society at large. Eventually, if not changed, this will also limit the people entering these specialties creating an exodus at the top and not enough in the supply line. This is starting to show in the recently released information by Merritt, Hawkins that Orthopedics is the most heavily recruited specialty followed by neurology and radiology, especially those that are trained in mammography. 

The reader mentioned punitive damages.  This is done punish those who do things with malice.  I seriously doubt whether any physician states I think I will create malpractice on this person today because I don't like him/her.  There is no malice nor intent.  There are maloccurances.  When these happen the patient needs to be compensated but fairly.  This is not the time for "jackpot justice". 

As far as the suing of HMOs is concerned, the Supreme Court in the recent Aetna decision, tossed out malpractice claims against them.  A regrettable but unanimous decision.  The Court tossed the problem back where it belongs , in the lap of Congress to reform ERISA. 

In a new study on cases that went to trial by the Rand Corporation released several days ago, California has been shown to benefited dramatically by the use of MICRA.  The net payments  are down 30% from pre-MICRA and more importantly the payments to attorneys are down 60% and the payments to the patients are only down 15%.  In some cases the reduction of non-economic damages were huge-over $2 million in bad baby cases.  This is a shame for some plaintiffs but the large award reductions and the large attorney fee reduction led to California being able to have some of the lowest premium increases in the country in a state filled with plaintiff lawyers. This keeps the physicians of the state in the state. The trial lawyers state that the statistic of 55% of the non-economic damages were under the $250,000 cap show the cap is cruel to those with more damage.  The answer is true, true and unrelated.  They are taking a truth and stretching it.  It is a statistic and only that.

The Pennsylvania  Senate has tabled malpractice caps.  This came during the debate on the allowing of slot machines which was passed.  The measure needs o be passed by August 2 to make the November 2 ballot to change the state constitution.  The trial lawyers Democratic paid lackeys will not allow it to pass.         Top


Ojai Hospital in California is considering merging with the larger and physician unfriendly Ventura Community Hospital.  Both are non-profit entities.  

The Grand Jury has stated that the Alameda Hospital System in Oakland, California, is a money waster.  They cite the contract with the bailout organization for further scrutiny as certain conditions will give more money to the company and the lack of administrative oversight.  It sounds like the same as a grand jury would find in the Los Angeles King/Drew mess. 

Speaking of the bastion of good medicine King/Drew, who just lost their accreditation from JCAHO ( see new legislation), several weeks ago they left a metal clamp in a patient.  I am sure the new administrator will make sure any new hires can count. 

I must congratulate Drew University for booting out 15 of their Board of Trustees.  It's a great step in the right direction.  Drew, a private university, is affiliated with King Hospital, run by the inefficient LA County Supervisors.  The new board is to be more ethnically diverse, as the present board is virtually all Black.       Top


CalPERS, the major payor of healthcare in California dropped their contracts with 38 hospitals earlier this year.  The most hit of the hospitals was Sutter Health.  Now, CalPERS has stated that if their approximately 2500 Medicare beneficiaries want to keep their own Sutter doctor they must drop their HMO plan and join the PPO plan.  As it turns out, in many cases the PPO is cheaper than the HMO.  CalPERS has promised the patients that there would be no co-pay, deductibles, or other out of pocket costs.  They would lose their benefit for hearing aids.  Why would anyone stay in the HMO plan?  It's cheaper and as good a benefit to be in the PPO. 

In a story that most know but few publish, the Boston Globe has stated that even employees whose companies insure their employees with employee contribution refuse the insurance.  They would rather crap shoot and take the money.  As the insurers continue to raise premiums there will be more that decline coverage and will be added to the roll of the uninsured.  In typical Massachusetts style the reporter intimates that insurance is an entitlement, when it's not.  Remember, in the old days the county hospitals provided the

Medical Records

In Louisville, Kentucky, a nursing home that closed a year ago had its medical records placed out on street for a trash pickup.  A storm came in and the records went all over the neighborhood with social security numbers and private medical information.  There is presently a contemplated conversion of the building into physician offices.  There is a general hospital across the street.  When they were notified they sent over their own employees to clean and gather as much of the files as they could.  These will be shredded.  Of course, HIPAA does not affect the release since there was no healthcare provider involved in the release.        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.