Let Doctors Share The Cost Of Malpractice Insurance

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The Hartford Courant

August 25, 2003

When legislators return from their recess, medical malpractice insurance proposals will undoubtedly be on the agenda.

Fortunately, Connecticut's malpractice insurance problem is different from the widely publicized problems found elsewhere. In Connecticut there is no crisis.

Most doctors in Connecticut can obtain malpractice insurance at reasonable rates. Doctors are not fleeing Connecticut - in fact, during the past 10 years the number of licensed doctors in Connecticut has increased every year - and the number of malpractice cases filed each year has remained reasonably steady.

In Connecticut, the problem is the affordability of malpractice insurance for a few medical specialties, most notably obstetrician-gynecologists and some surgical specialties. Specialists in these fields are being quoted rates of $100,000 or more for a year's insurance coverage. Clearly, measures should be taken to protect them.

The reason these specialists face such high rates is that when they make errors, the results are devastating. In addition, there are too few of them in the state for the insurance companies to sufficiently spread the risk. To solve this limited problem, the American Medical Association and others are backing sweeping legislation to severely limit the right of malpractice victims to recover for serious injuries and death caused by medical negligence.

There is a better way to address this problem and at the same time improve the quality of patient care. Both can be accomplished through premium averaging.

For all doctors in the state insured by Connecticut's most expensive insurance company the average malpractice premium is only about $13,000 per year. That average includes rates paid by the high-priced obstetricians and surgeons. What is more, the entire amount of the premium is deductible, leaving the after-tax average cost to the doctor at only about $7,500 a year - a small price to pay for patient protection.

If all of the doctors were charged the average, the price of insurance for obstetricians and other high-risk specialists would drop from $100,000 to $13,000, though the price for most other doctors would rise slightly to that same average level.

Isn't this a more humane way to solve the problem than taking the money from the brain-damaged children and those paralyzed, sterilized, blinded and disfigured by medical negligence?

There are problems with premium averaging.

One potential problem is that in order for insurance companies to set their rates with premium averaging they will first have to know the entire pool they are insuring. Also, insurance companies wanting to lower their average, to make their product more competitive, might simply refuse to insure high-risk specialists. Finally, doctors seeking lower premiums could avoid those companies insuring the high-risk specialists.

All of these problems can be solved by legislation.

The legislation should require all doctors to purchase group malpractice insurance. Doctors with hospital affiliations would purchase their insurance though hospital insurance cooperatives that would cover the entire hospital medical staff, including obstetricians. The insurance company would know the entire pool of doctors and staff before it quoted a premium and all doctors would be guaranteed affordable insurance. Thus, every doctor with privileges at a hospital would pay for and be insured through the hospital's insurance policy.

Along with this reform, legislation can be adopted to beef up the power of hospitals to control doctors' conduct. In the end, it is the high rate of medical errors, committed by a very few doctors, that is the root cause of the insurance problem. As it is now, hospitals are often afraid to act against bad doctors for fear of being sued. But it is hospitals that are in the best position to assure quality of care, and they must be protected in their efforts to do so.

Under this plan those few doctors who practice exclusively outside of the hospital setting can be offered insurance through group coverage with county medical societies.

These proposals can effectively cure the medical malpractice insurance problem by providing guaranteed, affordable insurance for all of Connecticut's doctors without destroying the rights of those devastated by medical negligence.