Term Paper: Rising Cost of Medical Malpractice

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[. . .] A majority of the research conducted related to medical malpractice claims up until this point in time have focused exclusively on statistical data, including insurance claims and surveys of patients regarding claimants (Fielding & Waitzkin, 1999). This data suggests that the incidence of medical malpractice claims is rising rather than declining.

The idea of medical negligence and malpractice is longstanding; for generations the issue of medical malpractice is evidenced through records. Historically, records of malpractice insurance claims date back to the first quarter of the early nineteenths century (Fielding & Waitzkin, 1999; Mills, 1956). Kenneth Allen De Ville reports that medical malpractice claims started to become more common during the Jacksonian period, and have risen continuously ever since (Patel & Rushefsky, 1995). During the time between 1835-1865, a medical malpractice "crisis" was identified, that paralleled the crisis occurring today within the medical field (Fielding & Waitzkin, 1999). Data from research conducted at this time indicates that the number of malpractice cases rose in fact, at a rate faster than the population growth (see Table 1.1).

Among the reasons cited for such increases during this time include the idea that medicine was becoming more heroic, where decisive medical intervention was becoming more the norm rather than the exception to the rule (Fielding & Waitzkin, 1999). Physicians began utilizing new treatments such as bloodletting and induced vomiting, which at the very least left "much to be desired in the eyes of the public" (Fielding & Waitzkin, 1999).

Progress often comes with pain. The development of the forceps for example, was accompanied by "numerous accounts of fetuses being dismembered during delivery in order to save the mothers life" (Fielding & Waitzkin, 1999). Unrelated to such horror stories, medical advances have also been cited as raising patients expectations of projected outcomes, and once those outcomes are not fully realized a greater number of malpractice claims subsequently results (Fielding & Waitzkin, 1999). This rationale is far more likely applicable to the modern day insurance premium crisis.

Medical malpractice cases arise for a number of reasons. Medical treatment rendered by a physician that is inadequate or incorrect, even excessive may result in adverse outcome and a subsequent case. Fielding and Waitzkin (1999) note that from a structural perspective, the American health care system at present makes physicians easy targets for claims because "the complexity of this system increases the chances that something will go wrong despite the efforts of even the best trained practitioners." Medicine in contemporary times has also become a capitalized, profit hungry industry, where physicians and patients alike are often left feeling "isolated and dehumanized" (Mills, 1956; Fielding & Waitzkin, 1999).

Physicians often describe medicine as "fraught with frustration" (Fielding & Waitzkin, 1999). Many are faced with increasing demands and workload pressures, as well as insurance provider limitations that dictate the amount of time allocated for each patient, often preventing a physician from spending what they feel is an adequate amount of time with patients. Also, the ever increasing threat of malpractice claims has now affected physicians in such as way that they now view patients as potential threats (Fielding & Waitzkin, 1999). Distrust has subsequently evolved and encouraged physicians to practice more "defensive medicine" (Fielding & Waitzkin, 1999).

According to a recent report in "State Legislatures" (2002), more than 60 specialists at the University Medical Center in Las Vegas "walked off their jobs" because of the rising cost of medical malpractice insurance (Boulard, 2002). The mass exodus resulted in the closing of a 24-hour trauma center (Boulard, 2002).

In Nevada, lawmakers responded to the crisis by passing a bill that set a cap on medical malpractice claims to $350,000 (Boulard, 2002). Two exceptions to this cap exist however, in situations where a "gross malpractice" or "clear and convincing evidence" exists suggesting intentful malpractice. The recent crisis in medical insurance has increased rapidly from about the year 2000, when insurance premiums started to rise rapidly. In December of 2001, St. Paul companies claimed that they would no longer offer medical malpractice coverage, in part because of losses cited "in the hundreds of millions" (Boulard, 2002). St. Paul covered more than 42,000 workers and more than 73,000 other types of health care workers (Boulard, 2002). These figures represent more than 40% of the covered physicians in some states.

In Ft. Lauderdale, obstetricians now pay in excess of $200,000 per year for medical malpractice insurance (Boulard, 2002). Rising insurance premiums have resulted in national cutbacks of services. In Hopwood Pennsylvania for example, three local obstetricians who "together delivered up to 450 babies each year" stop practicing because their insurance premiums increased to greater than 260% (Boulard, 2002). Part of the problem lies in juries who are continually awarding plaintiffs larger and larger claims. According to Boulard, juries awards "contributed to a 33% jump in claims paid by insurers between 2000 and 2001" (Boulard, 2002). The size of awards has been growing by approximately seven percent over the last 10 years, an increase "that is about 3% more than the rate of inflation" (Boulard, 2002).

Some solutions that have been presented include the notion of insurance "caps." Lawyers argue however, that such caps "penalize patients most severely injured from medical malpractice" (Boulard, 2002). The bigger issue perhaps is addressing the problem of rising premiums. Caps can help stabilize the market, but research suggests that caps rarely "have the immediate effect of reducing premiums" (Boulard, 2002). West Virginia has taken an alternative approach, passing in 2001 HB 601, which established a limited state-run insurance plan that is designed to provide reasonable insurance for physicians who aren't able to obtain traditional coverage (Boulard, 2002).

Certain specialties are more at risk than others, including obstetrical care providers and the field of neurosurgery (Cornell, 2002). States currently have several options available to them that are not adequately being utilized to reduce the medical malpractice problem. These include insurance market interventions or "stopgag solutions" that specifically target the problem of a lack of affordable or available insurance for practicing physicians (Cornell, 2002). One method these programs may help is by providing subsidies to providers or creating state-run insurance programs such as those in operation in West Virginia. These measures however, are generally considered more "short-term" in nature. Another proposed intervention is tort reforms, which in general target the manner in which medical malpractice claims are processed through the court system (Cornell, 2002). Tort reforms "are aimed at reducing either the size of awards or the number of suits that make it to the court" (Cornell, 2002). This type of reform is perhaps the most controversial, as lawmakers and patients are concerned that such reforms might adversely impact patients who are the victims of severe medical malpractice situations. Another proposed intervention is alternative dispute resolutions programs, which attempt to reconcile medical malpractice claims outside of the court system (Cornell, 2002).

Patient safety efforts have also been proposed, which would focus on prevention and patient well being as an approach to "resolving the issues that contribute to medical errors" (Cornell, 2002).

For adequate reform to be enacted, states must firs analyze the market forces operating within their market segments and ascertain the depth of the medical claims crisis within their judicial system. Even in 2002, many insurance companies in various states are quoting rates that were double and triple what doctors had paid in 2003 (Cornell, 2002). Insurance rates apply not only to doctors, but also hospital emergency rooms, trauma centers, birthing centers and nursing homes (Cornell, 2002). Americans face a crisis if these facilities continue to shut their doors in response to the lack of available and/or affordable medical malpractice insurance.

Research suggests that three primary factors are contributing to the increasing rise in insurance premiums. These include the following: (1) insurers in the past kept premiums artificially low in order to gain a market share, and this practice has changed, (2) jury awards are continuing to rise in cases of medical negligence, (3) major insurance carriers (such as St. Paul) are leaving the market, or no longer offering physicians medical negligence coverage because of the frequency and amount of claims (Cornell, 2002).

A strong economy and stock market typically enable medical insurers to better mitigate the costs of insurance premiums; I some cases in a well supported economy medical malpractice premiums can be kept below market value (Cornell, 2002). This is possible because the profits "from investment income help offset low premiums and underwriting costs" (Cornell, 2002). This evidence suggests that the rapid rise in medical insurance premiums during the last five years specifically might be attributed to the deficient state of the economy within the United States. The poor economy in and of itself however, cannot be blamed wholly for the rise in premiums.

Jury awards as mentioned, are continually arising. Some reports indicate that jury awards jumped as much as "43% in one year" (1).

State run stop gap medical malpractice liability coverage may… [END OF PREVIEW]

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