December 10, 2001

 

Bard Unveils Partial Solution To Imminent Health Care Crisis

Lawmaker urges immediate action on stopgap measure addressing exodus of doctors from PA, shutdown of health care facilities due to lack of medical liability insurance

 

HARRISBURG—Montgomery County lawmaker Rep. Ellen M. Bard (R-153) today unveiled legislation she is proposing to her colleagues and the governor that provides an immediate, temporary solution to the health care crisis in Pennsylvania resulting from doctors and hospitals being unable to obtain medical liability insurance.

"The immediate crisis for doctors and hospitals is the skyrocketing cost and lack of availability of medical liability insurance, " Bard said. "It is increasingly difficult, if not impossible, for doctors to get insurance because insurers have experienced losses caused by an increasingly higher number of lawsuits and increasingly higher jury awards. These medical liability insurance costs have led doctors to choose other states when they start to practice. Many of our best and brightest doctors with established practices in our communities have moved to other states to practice medicine, have stopped doing surgery or have retired altogether.

"The situation has been deteriorating to where it is now a serious crisis. Private medical liability insurance is simply not available."

The situation has been illustrated by a number of doctors from across the state, including two orthopedic groups that are unable to get insurance after Jan. 1, 2002—the Orthopedic Institute of Pennsylvania in Harrisburg and the Orthopedic Specialty Center in Willow Grove.

Highlights of Bard’s bill, which is endorsed by the Pennsylvania Orthopedic Society, are as follows:

Physicians and other health care providers are required to obtain annual malpractice insurance coverage of $250,000 per occurrence and $750,000 per annual aggregate beginning in 2002. Current malpractice insurance requirements are $500,000 per occurrence and $1.5 million per annual aggregate.

Hospitals are required to obtain annual medical liability insurance coverage of $250,000 per occurrence and $1.25 million per annual aggregate beginning in 2002. Current coverage requirements are $500,000 pre occurrence and $2.5 million per annual aggregate.

The Medical Professional Liability Catastrophe Loss Fund (CAT Fund) is privatized beginning Jan. 1, 2002. An authority is established to eliminate the unfunded liability. Although health care providers will be required to pay off the balance of the unfunded liability (estimated at $2.4 - $2.8 billion) for up to 30 years through the payment of an annual assessment to the authority, the legislation caps the assessment at 50 percent of the 2000 CAT Fund surcharge level. The discount would be in effect for years 2002-2008 in order to provide additional long-term financial relief to doctors and give them additional incentive to remain in practice in Pennsylvania

For physicians beginning their practice after Dec. 31, 2001, the annual assessment will be adjusted downward throughout the period in which the unfunded liability is retired, in order to give new physicians a better incentive to begin their practice in Pennsylvania

The CAT Fund provides doctors and hospitals with $700,000 of malpractice coverage in addition to the $500,000 they purchase from insurers. The fund assesses an annual surcharge on providers to recoup the revenue paid out in malpractice claims.

A sharp increase in the number of medical malpractice lawsuits as well as in the size of jury awards, however, is resulting in record surcharges and double-digit premium increases by malpractice insurance carriers.

"The legislation will provide immediate and vital medical liability insurance cost savings that will allow doctors to stay in Pennsylvania until the ultimate solution—tort reform—is passed," Bard said. "Until tort reform, which I support, is implemented we won’t be out of the woods. My solution is a stopgap measure."

Only New York pays out more than Pennsylvania in medical liability awards, while Philadelphia alone paid out more in 1998 medical liability cases than the entire state of California. A recent $100 million jury award in Philadelphia was the third largest in the nation over the last ten years.

Average private medical liability insurance premiums and Cat Fund surcharges for a neurosurgeon in Pennsylvania total $111,000 annually, while neurosurgeons in Maryland pay only $44,700 and those in Delaware pay $31,700.

Pennsylvania is one of only a handful of states that has not enacted meaningful tort reform. Although the General Assembly passed a tort reform measure that was signed into law in 1996, the Pennsylvania Supreme Court invalidated much of the law as an infringement of its rulemaking authority.

Allegheny County lawmaker Rep. Mike Turzai (R-28) and Chester County lawmaker Rep. Curt Schroder (R-155) were on hand to endorse Bard’s legislation.

"Because of the lack of tort reform, CAT Fund and private medical liability insurance premiums have been skyrocketing over the last two years, making Pennsylvania an undesirable place to practice medicine," Bard added. "Now, for many of the physicians who have stayed in Pennsylvania there simply is no insurance available due to the unwillingness of insurers to offer coverage.

"This scenario is unfolding all over the Commonwealth, it’s not just a problem in the Southeast. My temporary solution would provide immediate help to our doctors and safeguard patient access to lifesaving trauma centers."