Accusations fly in malpractice issue

Stacy J. Willis

Monday, May 13, 2002 | 10:51 a.m.

One national group is calling local obstetricians' refusal to take new patients "a grotesque exploitation and abuse of women and children," saying the move is a part of a nationwide political campaign to limit malpractice lawsuit payouts.

The accusation comes just after Las Vegas obstetricians began turning away pregnant women because, they say, rising malpractice insurance premiums and insurance discounts requiring low patient numbers put them in an impossible financial squeeze.

Many Nevada physicians have seen their medical malpractice insurance rates increase by as much as 150 percent in the last six months after a major insurance company pulled out of the market.

And while physicians call the exploitation charge "ridiculous" and "uncalled-for," the mud-slinging further complicates what is already a convoluted debate in the state.

Policymakers are meeting today to try to cut through the rhetoric and find solid information about the relationship between lawsuit awards and malpractice insurance rates -- that is, if the state enacts limits on damages awarded for pain and suffering, will doctors' insurance rates go down?

One anti-tort reform group says the lack of consistent correlation between lawsuit caps and lower malpractice insurance rates means that doctors' groups, such as the American Medical Association, are exploiting a problem caused by market forces to champion their political preference for malpractice limits.

"These doctors are basically terrorizing women," said Joanne Doroshow of the Center for Justice & Democracy, an organization whose mission is to "protect the right to trial by jury." The New York-based center's advisory board includes Ralph Nader.

Local physicians and representatives of the AMA vehemently denied any such organized plan to exploit patients.

"We are not in any way curtailing care, that's absurd," Dr. Donald Palmisano, secretary-treasurer of the AMA, said.

"The AMA is working to make sure patients have access to physicians. We are alerting everybody that there is a severe crisis in the nation in the tort system," Palmisano said.

Dr. Raj Chanderraj, president of the Clark County Medical Society, agreed. "To say that doctors would orchestrate this is ridiculous and uncalled for," he said.

Physicians groups and insurance companies make the case for "tort reform" and plaintiffs attorneys are saying that caps on jury awards will not lower premiums.

But other states' experiences show that lawsuit damage limits and low rates do not necessarily go hand-in-hand. Some states that have caps also have high rates, and some states that do not have caps have low rates.

Statistics that will be presented to lawmakers today from the National Association of Independent Insurers, the Medical Liability Monitor, and the National Conference of State Legislatures show that the correlation between limits on noneconomic damages and medical malpractice rates is inconsistent.

Nevada is one of 27 states that have no limits on the amount a jury can award a victim of malpractice for pain and suffering -- so-called noneconomic damages. But not all 27 such states have suffered from extreme rate increases in recent years.

In 2000 Nevada's OB/GYN malpractice insurance rates ranged from $60,000 to $94,8280, according to the Medical Liability Monitor, an insurance industry journal. Malpractice insurance companies in the state operated at a loss -- for every dollar of premium collected, $1.33 was paid out in expenses, according to the National Association of Independent Insurers.

However, in Minnesota, where there are also no caps on noneconomic damages, rates in that year were $16,141 to $18,439, and companies operated at a profit -- paying out about 70 cents for every $1 collected.

"There are anomalies," Larry Matheis, executive director of the Nevada State Medical Association, which favors enacting caps, said. "I don't have an explanation for Minnesota."

But in some states that have caps on noneconomic damages, rates are higher than in Nevada and insurance companies operated at a loss in 2000.

In Massachusetts, there is a $500,000 cap on malpractice noneconomic damages, OB/GYNs paid an average of $76,176 in premiums annually, and insurance companied operated at a loss -- paying out $2.27 for every dollar of premium.

"Clearly, there is no guarantee (caps) bring the rates down," Bill Bradley, Nevada Trial Lawyers Association, said.

Shawn Martin, director of congressional affairs for the American Osteopathic Association, said that while it is not certain that enacting non-economic damage limits would reduce premiums, "tort reform would stabilize the market."

"The fear of the unknown -- of a large jury award -- can throw a whole company into disarray," said Martin, whose physician association supports limiting non-economic damages.

While obstetricians in Las Vegas curtail their practices and pregnant women call the governor's office asking for limits on malpractice lawsuit awards, similar stories are popping up from Florida to Pennsylvania -- which Doroshow counts as evidence of a national campaign.

A news story in the Lancaster New Era this week begins, like countless others across the nation, "Dr. Paul Visneski has delivered 3,000 babies ... now his firm's rates are going to $180,000."

"It's pretty clear what's going on. The American Medical Association is taking advantage of expected insurance rate increases to get tort reform. It's a well-planned campaign to target lawmakers using certain medical specialties," Doroshow said.

"I really don't think they care about insurance premiums, I think they are using this to chip away at medical malpractice laws."