Editorial: Put insurers under the microscope

Tuesday, Sept. 9, 2003 | 9:23 a.m.

It's been exasperating trying to determine just how much patient care has been affected by the medical malpractice insurance crisis in Southern Nevada. It's indisputable that malpractice insurance premiums for doctors have skyrocketed in the past two years, especially for specialists such as OB/GYNs and orthopedic surgeons. But because of the lack of reliable surveys to assess the impact, it's been difficult to get a fix on precisely how many doctors have left Nevada or shut down their practices due to the rising rates. A new report from the General Accounting Office, Congress' investigative arm, assesses the medical malpractice insurance crisis in Nevada and other states. It is a study that offers an independent, outsider's perspective.

The GAO determined that patient access to doctors had been curtailed somewhat by the medical malpractice crisis, including in Nevada, but the study also determined that physicians had exaggerated its impact. The GAO made random calls to 30 OB/GYN practices in Clark County and found that 28 were still accepting new patients. And of the 11 surgeons who purportedly had ended their practices due to the crisis, the GAO said four of them were still working. The Clark County Medical Society and the Nevada State Medical Association dispute the specific findings about the number of physicians still here, saying that they don't jibe with their own experience.

Even after the GAO report, it seems that we don't know much more than we did two years ago -- and that is a terrible situation in which to make important decisions, such as restricting a patient's right to sue if he's been harmed by the actions of a negligent doctor. Despite the absence of hard information, doctors argued that runaway jury awards had caused the spike in their premiums, and in 2002 they were successful in getting the Legislature to cap damages for pain and suffering in medical malpractice cases.

Jury awards very well may have played a role in the rising rates, but we still haven't been sold on the notion that these awards are the primary reason for the increase. Historically, insurance companies raise their rates at the onset of tough economic times to make up for their investment losses -- something that mirrors what has been going on since the end of 2001. And after the Legislature placed a cap on jury awards for pain and suffering, the doctors' medical malpractice insurance rates increased anyway.

If there is one thing that is certain, it is that the insurance companies have eluded real scrutiny to determine what role they may have played in driving up medical malpractice insurance rates. One of the arguments that plaintiffs' trial lawyers make is that insurance companies often refuse to settle cases out of court. Insurers too often are willing to take a gamble by going to court because their policies often limit how much they'll be out of pocket if the doctor loses a malpractice judgment -- typically an amount of about $1 million for both actual medical costs and for pain and suffering.

Just two weeks ago the Nevada Supreme Court upheld the largest malpractice verdict ever in this state -- $11 million against a doctor from Northern Nevada. Advocates for tort reform might point to this as an example of an excessive verdict, but that jury award, involving a patient who must be fed intravenously for the rest of her life because the doctor delayed making a diagnosis about a bowel obstruction, could have been much lower. The attorney for the 24-year-old woman offered to settle for $1 million, but the insurance company refused.

The medical malpractice issue hasn't gone away and will soon be before Nevada voters. Doctors have collected enough signatures to get an initiative petition on the ballot in November 2004 that would place greater restrictions on medical malpractice jury awards. Nevadans will have to do a thorough job in sorting through the rhetoric and demand better information before taking any more steps that could further erode the legal rights of patients who've been harmed by their doctors.