Around the country this summer, at least half a dozen hospitals have closed obstetrics wards, others have curtailed trauma services and a string of rural clinics has been temporarily shuttered as a result of soaring costs for medical malpractice insurance.
Mercy Hospital in West Philadelphia closed its maternity ward Friday, and the Largo Medical Center, near Tampa, Fla., plans to do so in December.
In the past few weeks, the only trauma center in Las Vegas closed for 10 days; the Central Florida Regional Hospital in Sanford reduced surgical procedures for five days; and a handful of rural clinics across Mississippi sat empty in the summer heat for part of a week. All the closings were because of problems with malpractice insurance.
Increasing malpractice costs over the past two years have led doctors to order batteries of costly exams and limit risky procedures; many doctors decided to retire early. Now the costs are directly affecting medical institutions and the care they deliver to patients, according to interviews with hospital administrators in many states.
In all, more than 1,300 health care institutions have been affected, according to a survey by the American Hospital Association. The survey, released in June, found that 20 percent of the association's 5,000 member hospitals and other health care organizations had cut back on services and 6 percent had eliminated some units. Many of those units are obstetrics wards, where medical mistakes have historically led to expensive jury awards and settlements.
"It is likely that this is going to get much worse," said Carmela Coyle, the senior vice president for policy at the hospital association. "We're likely to see more closures of services."
Patient risks rising
No deaths have been attributed to the cutbacks, but hospitals say risks to patients are rising.
"Our trauma system has basically fallen apart," said Sam Cameron, the chief executive of the Mississippi Hospital Association. "There is a so-called golden hour in which a patient with a serious head injury needs to see a specialist like a neurosurgeon, and in some areas of our state that service is no longer available."
In West Virginia, two hospitals closed maternity wards and several hospitals no longer have either neurosurgeons to treat head injuries or orthopedists to mend broken bones, said Steven Summer, the chief executive of the West Virginia Hospital Association.
In New York City, many of the biggest hospitals have kept their insurance prices down by creating their own nonprofit insurance companies. No reductions in service have been reported in the city or elsewhere in the state.
Steven M. Visner, an insurance specialist at Ernst & Young, the consulting firm, said many hospitals had inquired about starting their own insurance companies. But it takes more capital than many of them have, he said, and exposes the institution to greater risk than buying coverage from a commercial carrier.
The New Jersey Hospital Association says insurance costs in the state have nearly doubled in the past year. Gary Carter, the chief executive of the association, said that although most services were being maintained, some New Jersey hospitals say specialists are balking at taking on-call duties in emergency rooms.
"But this is just beginning in New Jersey," he said. "We're expecting to see hospitals increasingly cutting back on services."
Insurance costs have also risen sharply in Connecticut, said Ken Roberts, a spokesman for the Connecticut Hospital Association. But he said the association had received no reports of service curtailments.
Specialists grow scarce
Around the country, hospitals say they are cutting services both because the high cost of their own insurance is overwhelming and because specialists, unwilling to bear the new costs for insuring their practices, are becoming scarce.
Some specialists, for example, have abandoned lifelong practices and started anew in states where malpractice insurance prices have yet to escalate. Many obstetricians and surgeons are restricting themselves to low-risk procedures. Still other specialists have become consultants, providing advice but leaving actual treatment to others to avoid medical malpractice insurance altogether.
The costs have become staggering. Premiums for doctors have doubled and tripled, in some cases, rising to as high as $200,000 a year for obstetricians in Fort Lauderdale and Miami. But even those prices begin to look mild compared with gargantuan insurance bills for hospitals.
In Philadelphia, for example, the cost of malpractice insurance at Thomas Jefferson University Hospital, which operates several hospitals, doubled this year, to $32 million. As a result, on June 30, Jefferson closed the maternity unit in its Methodist Hospital in South Philadelphia and cut 270 jobs at Thomas Jefferson and at the Jefferson Hospital for Neuroscience.