Health care languishes under liability fears, fees

Marc J. Yacht
Published September 20, 2004,   St. Petersburg Times

The doctors blame the lawyers, the lawyers blame the insurance companies and the insurance companies blame the awards. Our health care system is battered while this finger pointing continues.

Doctors, a trial lawyer, hospital administrators and insurance agency executives interviewed agreed that liability represents one of several woes plaguing hospitals' bottom line and doctors' income. Add inadequate reimbursements from private insurers and the increased uninsured population who cannot afford their medical services.

Doctor malpractice is the least understood and most emotionally charged of these issues. Physicians have seen colleagues priced out of insurance and/or personally experienced the embarrassment of lawsuits. Every practitioner interviewed saw the process of liability as too costly, demoralizing and a detriment to doctor-patient relationships. Many doctors have responded by changing careers, taking early retirement, refusing hospital call and selecting their patients.

Hospital administrators complained that difficulties in recruiting physicians were related to liability fears. The most difficult physicians to recruit are ER doctors, anesthesiologists, neurosurgeons, orthopedic and general surgeons, radiologists and obstetricians. Recently, fears of litigation relating to mammograms almost denied women this important screening tool. There are fewer doctors willing to deliver babies.

Hospital administrators cite increasing uninsured and underinsured patients, expensive liability premiums, and low reimbursement rates for decreasing doctors' incomes and the hospitals' bottom line. All administrators agreed that significant dollars for hospital liability premiums drained resources for needed staff, infrastructure improvements and supplies.

The attorney sympathized and agreed that doctors have seen their incomes drop. However, he strongly argued that increasing the difficulty to sue for medical injury was the wrong tactic to solve doctor and hospital woes. He further argued that insurance premiums and insufficient reimbursement rates were the culprit. The attorney added that doctors and lawyers have a similar problem in that most suits are due to poor communication between professionals, their staffs and clients. Both professions should look to understanding why people sue, to thwart suits. The attorney further suggested that doctors and lawyers join together and seek insurance reform to address better reimbursements and lower liability premiums.

Insurance agency executives want to sell policies that are affordable. They disagree with the attorney that insurance companies are profiteering. Companies have left Florida due to losses. Furthermore, insurance rates are simply a product of the cost of past awards and the predicting of future costs. Issues such as the Bad Faith Law and Joint and Several Liability play havoc with insurance payouts and drive costs up. One hospital administrator argued that when opting to be self-insured, the actuarial computation for premiums were much lower than what the insurers had calculated.

The insurance agency executives suggested that health insurance rates for consumers could be significantly reduced with catastrophic protection, rather than policies paying for vaccines and office visits. The insurance executives suggested that liability, the uninsured and poor reimbursements for care were intertwining issues. Resolving one issue and not addressing the others would inadequately address the environment for practicing physicians and struggling hospitals.

Doctors, hospital administrators and the insurance agency executives all agreed that arbitration should be in place to decide which suits go forward against doctors and hospitals. They also concurred that caps on noneconomic damages along with limits on attorney's fees would reduce malpractice premiums.

One insurance executive summed it up best when he suggested that if the attorneys, hospital administrators and the insurance industry don't work together amicably to find a solution, the government will find one for them.

Such government intervention has already occurred with expanded federal funding to community health centers across the nation. Many public health agencies provide sick care. Hired staffs include doctors, nurses and other professionals to address the needs of the uninsured and inadequately insured. That need is increasing as the more affluent opt not to have health insurance and are appearing in these facilities. There are stringent limits of liability to government entities.

One hospital administrator suggested that we are evolving into a three-tier health care system. One system is for the uninsured and another for the insured. The third alternative is emerging medical clubs for the affluent. These expensive, closed clubs offer their health services to members only.

Dr. Marc J. Yacht is director of the Pasco Health Department.