Doctors belted by rate boosts
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By JOHN ZICCONI Vermont Press Bureau - Published: May 14, 2005
BERLIN — Vermont physicians believe the cost of medical malpractice insurance recently approved by a state regulatory agency spells trouble for both local doctors and their patients.
Vermont's largest malpractice insurance carrier beginning in July will raise rates for emergency room physicians by 69 percent, oncologists by 46 percent and family care obstetricians 38 percent.
Medical Mutual Insurance Company of Maine will also raise rates for radiologists, urologists and surgical podiatrists more than 30 percent. Overall, the average rate increase for all fields of practice is 19.7 percent.
Skyrocketing malpractice costs — local rates rose about 50 percent between 2001-04 — are driving doctors out of business and threaten patient access, especially in rural areas where physicians earn less than they do in metropolitan areas like Burlington, doctors said.
The ever-increasing threat of being sued is also driving up the cost of health care as physicians are forced to practice "defensive" medicine that includes ordering more expensive tests and consultations than are necessary just in case their judgment is ever called into question, doctors said.
"Vermont has never been considered a state in crisis," said Dr. Glen Neale, a Morrisville orthopedic surgeon. "But we have now moved into that area."
Vermont physicians on Friday high-lighted these extreme examples at a press conference and called for the Vermont Legislature to enact malpractice insurance reform.
"There is no physician that is not going to pass the increased cost on to their patients," said Dr. David Butsch, a general surgeon at the Central Vermont Medical Center.
Physicians called for a number of reforms, including limiting damages for pain and suffering in malpractice cases to $250,000, establishing a mandatory arbitration process before cases can be heard in court and setting expert-witness qualification standards for malpractice hearings.
The Vermont House and Senate have elements of these reforms built into their larger health care reform proposals, but it is still unclear if either bill will become law.
Physicians on Friday, regardless of how health care reform efforts conclude, called for lawmakers next year to take up a standalone malpractice bill offered by Rep. Harry Chen, D-Mendon, who is an emergency room doctor.
Chen said debating the bill next year would be optimum timing because a special malpractice study committee formed by the Legislature in 2004 is due to issue a report in December. Lawmakers hope the committee — which is comprised of doctors, lawyers, hospital executives, patients and regulators — can help them identify solutions that can contain runaway insurance rates, he said.
"The hope is we will take this issue up seriously as a result of this study," Chen said.
Vermont malpractice rates are the lowest in New England and among the bottom 20 percent in the nation, said Peter Yankowski, deputy commissioner for the insurance division of the Vermont Banking, Insurance, Securities and Health Care Administration.
Medical Mutual Insurance Company of Maine last week was granted permission to increase its rates substantially because the company was losing money, he said.
"If you look at medical malpractice companies over the past few years, they have not enjoyed profitable operations," Yankowski said. "When reviewing rates, we have to make sure they can cover their expected claims."
Yankowski acknowledged that local malpractice rates have increased substantially since 2000, but in the five years prior to that they hardly budged, he said.
"No one is making a lot of money here," Yankowski said. "Even though the rates have gone up, we still have some of the lowest rates in the country."
The recent rate increase will boost insurance premiums for obstetricians from $11,100 to $15,300, emergency room doctors from $12,500 to $21,100 and general surgeons from $21,300 to $26,900.
Physicians say Vermont malpractice rates may be among the lowest in the nation, but so are their salaries.
Vermont doctors earn an average of about $120,000 per year, said Paul Harrington, executive vice president of the Vermont Medical Society.
"People make a lot more elsewhere," Harrington said. "It is the percentage of income that I look at."
Trial lawyers, who represent patients injured by physicians, do not oppose malpractice reform, but they don't agree with everything doctors want, especially limiting damage awards.
Vermonters file about 50 malpractice lawsuits per year — which represents just 1 percent of all the state's civil cases — and generally no more than two go to trial, said Tom Sherrer, president elect of the Vermont Trial Lawyers Association. Financial settlements and jury awards are among the lowest — 48th — in the nation, he said.
Vermont's biggest problem is insurance companies do not charge Vermont doctors based on local risk, Sherrer said. Local physicians instead are lumped into risk pools with states that have much worse financial histories, he said.
Instead of limiting damage payments, lawmakers should focus on ways malpractice providers can cover local doctors in isolation, he said.
"There is a disconnect between what is happening in Vermont and the insurance industry," Sherrer said. "The big question is where are they losing money? That is why this captive insurance idea that is going around is a wonderful and one that we support."
Contact John Zicconi at john.zicconi@rutlandherald.com.