Costs Worry M.D.s, Too
Seeking help from state on malpractice rates
(2/14/2008) Doctors on the South Fork say that, unless something is done to reverse the trend, recent and proposed rate increases in medical malpractice insurance could drive them out of the state.
In July, Eric R. Dinallo, the New York State Insurance Department superintendent, approved a 14-percent increase and named a task force to address the issues that drive up the cost of insurance. At the same time he called on the State Legislature to take measures to keep the cost down.
Unless such legislation is written and passed, Mr. Dinallo said, two scenarios could unfold: Premiums could rise another 15 to 25 percent, or a surcharge of $10,000 per year for five years could be added on top of existing premiums. Those doctors who have been subject to many lawsuits could be charged a $230,000 fee, with no provision for whether there was merit to those suits.
Dr. Allen Fein, a general practitioner in Southampton, said on Tuesday that he was paying $5,850 per quarter for insurance without having ever been sued.
“I have a family practice. There are not a huge amount of suits like neurosurgery or obstetrics,” Dr. Fein said, noting that he had had a heart attack recently and had cut back the hours of his practice. “The insurance companies don’t give you a discount for that.”
He said he hoped the dramatic increases or surcharges were “just saber-rattling. It sounds preposterous.” If the state allows the $50,000 cumulative surcharge, “we don’t have it. We’re paying for two kids in college.”
Comparing his experience here with the medical system in Canada, where he is from, he said the expenses charged to doctors in this country and by the state “are absurd. Five dollars of every visit goes to malpractice.” Meanwhile, he said, the amount he receives in reimbursement from his patients’ insurance has not been adjusted to reflect increases in doctors’ outlay.
Still, he said, “I love my practice. I love living here.” He intends to try to make it work. “Do we have the legal right to tell them to go to hell? I don’t think we do.”
Even worse hit are those in higher-risk specialties, such as obstetrics and gynecology.
Geri Schmitt, a gynecologist in Hampton Bays, said the number of obstetricians practicing on the South Fork has dropped from nine to five over the past decade. Two of those, Dr. John Hunt and Dr. Allen Ott, still practice as gynecologists, but three have left the area, including Dr. William Shuell, who moved to Arizona.
Dr. Schmitt, the Hampton Bays gynecologist, said, “I’ll be honest with you. As a single, solitary practitioner I’ll be forced to close or stop taking private insurance.” She is also considering making her patients pay a surcharge, as some doctors on the East End already are doing, to defray costs.
As a typical gynecologist, without a history of lawsuits, Dr. Schmitt said, she pays $170,000 a year. “And I don’t do obstetrics.” By her calculations, it costs $50 an hour to cover malpractice insurance costs alone; the total overhead, of course, includes charges for the office space, nurses’ salaries, and supplies. “No one’s driving Mercedeses.”
Dr. Schmitt also said she is determined to stay, but could see her practice greatly transformed if the increases go into effect.
Assemblyman Fred W. Thiele Jr. has been monitoring the task force’s progress and, he said, found that there are some general areas of consensus that can be reached among the diverse parties involved: insurers, doctors, hospitals, and trial lawyers.
According to a memorandum Mr. Thiele wrote addressing the issue, “The medical malpractice insurance landscape has been shaped by a history of decisions and events that have been argued to have exacerbated this situation.”
In particular, the state’s actions to take money from the Medical Malpractice Insurance Association fund, a fund paid into by all of the state’s property and casualty insurers, and placing it in a fund paid into by medical malpractice insurers only . . . prevented the spreading of losses across all the property and casualty insurers in the state, and instead focused the losses on a smaller pool.”
In fact, Mr. Thiele’s memo continued, in the opinion of Eric DiNallo, the state superintendent of insurance, “had M.M.I.A.’s reserves been preserved and allowed to grow by collecting interest over the years, instead of being so severely depleted, New York’s medical malpractice insurers would be in a much stronger financial position today, and the problem facing New York would be far less serious.”
Mr. Thiele is in agreement with doctors who point to the trial lawyers as the major cause of high insurance costs and the major impediment to rectifying the situation. Mr. Thiele noted that Assembly Speaker Sheldon Silver is a trial lawyer, and that Mr. Silver “has vociferously opposed” tort reform measures or the placement of caps on damages.
Recently, Senator Kenneth P. LaValle also expressed his concern. “Within certain areas, we don’t have people we can go see. People are leaving the state for more doctor-friendly states. The costs for an ob-gyn are enormous before they even open their door.”
According to Mr. Thiele, a resolution will probably take a joint government and insurance industry effort, with the cooperation of the trial lawyers. He said he hoped the task force might facilitate that action. “It will take that kind of consensus building.”