CostRx: High premiums killing specialties

Dec. 14, 2005 at 2:14 PM
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WASHINGTON, Dec. 14 (UPI) -- CostRx is a UPI column that looks at the rising cost of healthcare, various factors that are contributing to the high cost and possible solutions.

The first installment of CostRx features an interview with Washington-based neurosurgeon David Curfman on how skyrocketing medical malpractice insurance premiums are driving up the cost of healthcare and driving doctors out of the profession.

Q. On the topic of soaring medical malpractice premiums, you have stated that, if something isn't done about the problem in the next five to 10 years, we will have a real crisis on our hands. Can you explain?

A. Well, I think it's going to be sooner then another decade. I very strongly believe that it's already an evolution. In probably the last three or four years, it's gotten fairly severe. My prediction in 2002 -- I gave a talk on this -- was that I thought both neurosurgery and obstetrics were going to collapse by roughly around 2009 or maybe 2010.

Q. Can you define what you mean when you say "collapse?"

A. What I mean by that is that a good portion of the people in the field who are remaining by then, those who are still paying the huge amount on a premium for malpractice insurance, their overhead is going to exceed their income to the point that there's no way that they can stay in business. In fact, there are many neurosurgeons -- and the same applies to obstetrics -- that, unless you dramatically change your profession from one of either solo practitioner (or) private practice -- in other words, non-institutional -- you're not going to be able to survive.

The few who have changed their practice have gone on to be part of a big HMO or have sequestered themselves in a government facility (like) a veterans hospital, or have gone with some hospitals where they're actually hiring neurosurgeons and obstetricians to do the work that they would have never have done as recently as five years ago. ... This is a crisis of major proportion that's hitting the big hospitals in the big cities -- inner cities -- that are faced with a lot of people who have no insurance or have very, very meager coverage on a Medicaid policy.

Q. Other than neurosurgery and obstetrics, which medical specialties are being hit hardest by rising malpractice premiums?

A. There are a lot of them that have the jitters, with trying to continue their practices, especially at the solo-practitioner level or in private practice. If you have the umbrella of an institution, like I've already mentioned, you've got somebody who's paying your overhead.

I'm not speaking for obstetricians -- I'm not one -- but I'm just noting that (neurosurgery and obstetrics) are the two specific specialties that are really having a rough time of making ends meet. And I can cite virtually by name people within the confines of the District of Columbia, both neurosurgeons and obstetricians, who are just leaving, disappearing out of these big cities, where the problems exist of reimbursement vs. payout for overhead, and the majority of our overhead obviously is malpractice insurance premiums.

Q. Can you explain further about how the problem of rising overhead -- some have estimated the cost of maintaining a medical practice will rise 20 percent in the next six years -- interfaces with burgeoning malpractice insurance costs?

A. We've got a double-edged problem. We are price-fixed as far as what we get in reimbursement and we're price-fixed, literally, on what we have to pay out in overhead. There is no other profession that I'm aware of in the United States where, as the years go on, by one means or another, we're making less money, with an overhead that's going up.

Here's the issue at hand: Over the years, physicians are getting reimbursed less for the same amount of professional skill and ability than they did even five years ago. And five years ago, malpractice insurance (cost) less.

Now I didn't go into the medical field to become a millionaire, but I didn't go into the medical field either to make $40,000 to $60,000 a year. I'm not saying I make that, but a lot of doctors do. It's becoming a very sad state of affairs where, you can charge what you want to, but if you accept Medicare, for instance, and if you accept Medicaid and you accept private insurance X, Y and Z, you're going have to abide by their rules and their talons are locked in on you strong(ly) as to what you are going to be able to get from that patient for the services rendered.

Some (patients) who have a lot of compounding medical problems ... just require more time and effort than others because of these compounding medical issues, and yet it doesn't make any difference, you're going to get so much for (a surgical procedure) whether you have to stay with that patient for two weeks, or two days or two hours.

Now you're finding a few more (physicians) in private practice who are boldly not taking insurance anymore. When patients come in the office, they have to pay upfront (and can later seek reimbursement from their insurance companies).

Q. Critics of medical malpractice reform say that the Bush administration is misguided by making medical malpractice reform its top priority for reducing the high cost of healthcare, arguing that that one issue represents only about 2 percent of the total cost problem. How would you respond?

A. They're trying to restrict this to the amount of cases that actually go to court. I can't quote you the exact numbers, but I can tell you that a few years ago, in checking around in the states of Maryland and Virginia and in the District of Columbia, there are a lot of lawsuits that are started. And many of those obviously never get to court; they don't have merit. But there is enough of the fine line of uncertainty with the situation that, with a lot of lawyers around, I know that (the share of healthcare costs attributable to medical malpractice-related costs) is far more than 2 percent.

What you have to take into account is, all of these lawsuits that that are initiated, many of those -- I'm talking about hundreds just in this area -- they go through a period of anywhere from six months to two years of discovery, or depositions, or running around trying to find all of the records. And that is a lot of time that is costing the whole profession.

A lot of these lawsuits are dropped before they get to the court. Now they don't bring that into the statistics. But you're paying out anywhere from $100,000 to $200,000 out of the pocket of your insurance company, and that mounts up sometimes to even more than the actual (jury) award.

Q. But the trial lawyers argue that, it's not that they're bringing frivolous lawsuits or winning excessive awards, it's the insurance companies that keep raising premiums to make up for profit shortfalls. How would you respond?

A. I think the lawyers by far have exaggerated and tried to literally coerce the general public into thinking this. If this is such a lucrative business, selling malpractice insurance, we can hardly find any (insurance company) to write insurance for these big cities. Now if this was such a great deal for the insurance companies, they would be coming into these cities and wanting to rake up these big profits, (but) you don't see them.

The city of Washington, D.C., has literally one company that's willing outright to write for malpractice insurance in this town.

Q. President Bush is proposing caps on non-economic damages and attorneys' fees of $250,000. Do you think this is a good way to attack the problem?

A. It's a reasonable start, (but) to talk about what level the caps should go to, I don't know. I think we're going to have to change the basic structure of what health insurance is and how it's administered. I don't think just trying to limit this or limit that (will solve the problem) because you'll get sympathetic people ... who will do everything they can to bust that cap or take it off, and then once you have a test case, everybody's back to zero.

Q. So how might medical malpractice reform go even further?

A. Health insurance is the only insurance where the only way you get any money is, you have to take people to court. Instead of going right to a lawyer to say, 'Hey, we will open up this treasure chest and take X number of dollars out because (the plaintiff was) hurt,' I think that these claims (against) a health insurance company should be taken before a panel. And (the panel) could contain lawyers and physicians and (a prospective medical malpractice case) would be reviewed. This has been my proposal even 10 years ago. I'm in the American College of Legal Medicine and I have really wanted to put this forth. ... To me, it would make sense and it would be a selling point to the general public.

Q. How would the review-panel approach work, and how would it help address the problem of cost?

A. (The term) malpractice (implies) that somebody almost deliberately did something wrong. (A particular case) may be substandard care or it may be that the physician/surgeon has done everything right in the routine, 'cookbook' fashion, and yet he has a patient who has not done well. And now what do you do with that? Is that the patient's fault? No. Is that the doctor's fault? No. Whose fault is it? Well, it's nobody's fault because that's part of life. There are people who have a normal EKG or whatever, and they drop dead five days later of a heart attack. In other words, life has quite a bit of uncertainty to it. So if this was taken before a panel and some patient had a problem and it wasn't quite sure that the doctor did anything wrong or just what was going on, if there was a way of handling this, and taking care of (the patient's) bills or doing something, then that could be resolved within the panel. It would be less costly, and if there was a settlement, if you will, the patient would be the one who would benefit. Because (he or she) would get all of the money. It wouldn't be divided up like it is in the courtroom.

Q. The Bush proposal on malpractice reform has passed in the House but has stalled in the Senate, and critics say it will never get enough votes to pass the Senate. Why do you feel there is this apparent lack of empathy on Capitol Hill for what doctors say is a crisis situation?

A. There are far more people in the Senate who are actually lawyers. I don't know what the percentages are, but I think it's quite high in the Senate compared to the House of Representatives. I think there is some psychological attitude (as in) 'Well, I'm a lawyer and I don't want my fees (reduced).' We're price-fixed, and the lawyers don't know that concept' they aren't price-fixed.

Q. A recent survey showed that the United States still leads the world in medical errors, and some critics would say that, in light of this survey, is this the time to be placing limits on medical malpractice claims? How would you respond?

A. First of all, what are the statistics? Number one, most other countries don't have the litigious climate that we do; and number two, the doctor, to some degree, is held in higher esteem (in other countries). Why is it, if we're having the most trouble, that people want to come here all the time to have their treatments? It doesn't make a lot if sense, and it's somewhat disingenuous.

I don't know where these statistics come from about all of these deaths in hospitals over a year's time. They sound staggering. Most hospitals have review boards, and if somebody is causing somebody's death, this is pretty well brought to the attention of the hospitals one way or another. You can't get away with this stuff. They may say we don't police ourselves, but we do police ourselves a lot better than they think we do, and certainly in this day and age, (more than) what used to be the case. I can't say I see anyone policing the attorneys when they bring frivolous lawsuits.

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