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Professional News
Soaring Liability Premiums Force Practice Changes
Psychiatric News
Volume 38 Number 9 page 25-53

Two-thirds of "high-risk" specialists have changed the way they practice medicine because of rising liability premiums and diminishing access to malpractice insurance.

In some cases, these changes have included ceasing to provide certain services and referring complex cases to other physicians, according to a survey of the nation’s physicians by the AMA.

Here are some of the survey’s findings:

• 64.8 percent of specialists in the high-risk specialties—emergency medicine, general surgery, neurosurgery, obstetrics/gynecology, orthopedic surgery, and thoracic surgery—have made changes in their practice, including no longer providing certain services, referring complex cases, and even closing their practice.

• 24.2 percent of high-risk specialists stopped providing certain services, including emergency and trauma care and delivering babies; 92.4 percent of the high-risk specialists who stopped providing at least some services said that liability pressures were important in their decision to stop providing certain services.

• 41.5 percent of high-risk specialists began referring complex cases. In "crisis" states—those states identified by the AMA in which premiums have risen most precipitously and access to insurance has dwindled—34 percent of physicians surveyed began referring complex cases, compared with 24 percent in non-crisis states. Crisis states include Arkansas, Connecticut, Florida, Georgia, Illinois, Kentucky, Mississippi, Missouri, New Jersey, Nevada, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Washington, and West Virginia.

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Psychiatrists are not among the high-risk specialists, and though their premiums have risen somewhat, they remain at the low end of the spectrum. Alan Levenson, M.D., president and chief executive officer of the Psychiatrists’ Purchasing Group, told Psychiatric News that he knew of no reports of psychiatrists substantially changing their practice or ceasing services because of liability concerns. The Psychiatrists’ Purchasing Group sponsors the APA-endorsed Psychiatrists’ Professional Liability Insurance Program.

But Levenson said the AMA survey data document a burgeoning problem that threatens all of medicine. "It is unfortunate to realize what kind of seriously negative impact the malpractice problems are having on physicians in other specialties," he said. "But in the long term, these kind of data are supportive of efforts for tort reform. It will take time for tort reform efforts to be successful and time for those steps to actually have the effect of bringing down malpractice premiums. Certainly, tort reform will be beneficial to psychiatry and all of medicine."

AMA President Yank Coble Jr., M.D., told Psychiatric News that the liability crisis is a "societal problem" affecting all physicians and all of their patients. "No one specialty can be immune," he said. "Even though psychiatrists are not immediately affected, their patients are affected."

Coble said that some primary care physicians and radiologists were once considered low liability risks. Today, he said, some physicians have ceased providing mammograms, and in some regions of the country patients have to wait weeks or months for a mammogram.

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Coble said the Help Efficient, Accessible Low-Cost, Timely Healthcare Act of 2003 (HR 5), known in abbreviated form as the HEALTH Act—passed by the House of Representatives in March—would go a long way toward easing liability problems if it became law. That legislation limits pain and suffering damages, so-called "noneconomic damages," to $250,000. Punitive damages would be limited to two times the economic damages or $250,000, whichever is greater. The HEALTH Act also provides limitations on attorney’s fees, to reduce attorneys’ incentives to sue for unnecessarily large awards.

"Before you can heal the patient, first you have to stop the hemorrhaging," said Coble. "We strongly urge the Senate to pass common-sense medical liability reform legislation that will preserve patients’ access to care. The AMA will continue to work with patients, physicians and lawmakers at the grass-roots and national levels to pass medical liability reforms until this crisis ceases to exist."

Beyond stemming the immediate crisis, Coble said the nation needs to turn its attention to building a system that encourages medical safety and eradication of errors. He said the Patient Safety and Quality Improvement Act (HR 663), currently in the House of Representatives, would encourage a "systems" approach to fixing medical errors, replacing the current system of "blame and shame." ▪

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