Alarm Over Malpractice

Doctors in New York State, already burdened with some of the highest premiums for malpractice insurance in the U.S., got more bad news last week. The state granted one small insurance company increases in malpractice-policy rates that totaled 52% and promised the similar largesse to other insurers as soon as they applied. Conceding that the increase was "ridiculous," New York's insurance superintendent, James Corcoran, explained that in approving it, he was simply making insurance rates high enough to keep insurers solvent.

The action was symptomatic of what the American Medical Association is calling a crisis in medical malpractice suits. According to a recent A.M.A. report, Americans are filing three times as many malpractice claims as they were just a decade ago and are winning settlements of gargantuan proportions. The huge awards are causing insurance companies to jack up their malpractice premiums and forcing doctors to raise their fees.

Alarm over malpractice suits is nothing new. The word crisis was used in the mid-1970s, when there were fewer than five malpractice suits filed annually for every 100 doctors. The A.M.A. report cites statistics from one large insurance company that in 1983 there were 16 malpractice suits filed for every 100 doctors. During 1974, according to data from Ohio's Jury Verdict Research Inc., there were only four malpractice awards in excess of $1 million. In 1983, by comparison, there were 70. The total value of awards to plaintiffs that year reached $2 billion.

As a result, says B.J. Anderson, the A.M.A.'s associate general counsel, "premiums have risen astronomically each year since 1975." Although this has placed an increasing burden on all medical practitioners, obstetricians and surgeons have been particularly hard hit. In Florida, for example, an obstetrician may pay up to $52,000 a year in premiums. After the latest increases in New York State, a neurosurgeon practicing on Long Island could be billed $101,000 for his 1985 policy.

One result of the malpractice epidemic is that wary doctors are practicing "defensive medicine"--ordering additional health-care procedures in order to protect themselves against potential suits. According to an A.M.A. survey, 27% of doctors admitted that because of concern about possible legal action, they prescribed additional treatment, and 40% said they ordered extra diagnostic tests. Such practices, the A.M.A. estimates, add from $15 billion to $40 billion to the national health-care cost, which, like the increased price of health insurance, is passed on to the patient.

One remedy endorsed by the A.M.A. report is new state legislation. It recommends as "one of the most effective" reforms that a cap be placed on the amount of money that can be awarded to injured parties. Another recommendation is the use of pretrial review. Wisconsin, Louisiana and Indiana, for example, already have panels of medical professionals who review suits before cases go to trial; they suggest a settlement if the case has merit or brand it without merit if it does not.

The A.M.A. makes another suggestion: that the medical community first heal itself, purging incompetent doctors from its ranks. How? By revamping peer- review procedures already in place and using computer systems to detect incompetent doctors, thus enabling hospitals to screen them out.

Without some corrective action against spiraling malpractice costs, Anderson fears, some medical services may simply become unavailable. She asks: "Will obstetricians stop delivering babies because they can't afford to purchase insurance?"