Liability premiums up 34% at hospitals

Maryland survey shows $40 million increase in costs, to $144 million

Md. hospitals' liability premiums up 34%

October 06, 2004|By M. William Salganik | M. William Salganik,SUN STAFF

Adding pressure for legislative reform of the malpractice system, the Maryland Hospital Association reported yesterday that hospitals are paying 34 percent more for liability insurance this year than last, adding $40 million to Maryland hospital costs.

An MHA survey found that the state's 47 hospitals are paying $144 million in liability premiums this year, up from $104 million last year and more than double the $67 million the hospitals paid in 2001.

Twenty-one percent of the hospitals reported some service cutbacks as a result of malpractice costs.

Nancy Fiedler, MHA senior vice president, said some hospitals were dropping services believed to involve more risk, such as bariatric surgery for obesity, while others were making cuts based on budget considerations or on availability of physicians.

The MHA survey comes as Maryland doctors, led by the state medical society, MedChi, are mounting an intensifying campaign to rein in increases in malpractice insurance premiums. The Medical Mutual Liability Insurance Society of Maryland, which insures most of the state's doctors, won a 33 percent increase in rates for next year, on the heels of a 28 percent increase this year.

Yesterday, MedChi reported results of its survey, in which almost 40 percent of doctors questioned said they were considering closing their practices or moving, with malpractice costs a key factor in their decision.

Both surveys were released as doctors and hospital officials described problems with the malpractice system to legislators yesterday in a "town meeting" at St. Agnes HealthCare in Baltimore.

Also this week, Gov. Robert L. Ehrlich Jr. met with MHA officials and, separately, with a group of doctors who had threatened a job action to draw attention to the malpractice issue. A task force appointed by Ehrlich met yesterday, and a special state Senate committee is to hold a public hearing today.

While Ehrlich and legislative leaders have said they hope to see malpractice reforms enacted, perhaps at a special session of the legislature in November or December, there isn't yet agreement on the elements of a reform program.

However, a solution "seems closer in that there is a growing appreciation among leaders in Annapolis that this problem is about to break all over us," said T. Michael Preston, executive director of MedChi. "There is a need to tackle this, and pressure is building to do that."

In describing problems that hospitals are facing, Lawrence M. Beck, CEO of Good Samaritan Hospital in Baltimore, said his hospital has trouble getting enough neurosurgeons and general surgeons to be on call to assist in the emergency room. In some cases, he said, Good Samaritan has to stabilize and transfer a patient to get needed care.

Also, he said, although the hospital doesn't normally deliver babies, it does a few deliveries a year on an emergency basis. However, he added, the three gynecologists with offices on campus cannot assist in the deliveries, because their malpractice insurance would be much more expensive if they did. That means, he said, the babies are delivered by emergency room doctors, although the gynecologists have more experience.

He said malpractice coverage costs his hospital about $1 million a year. "We're not sitting around talking about what new services we can provide," he said. "We're talking about how do we save the services we have."

Preston said the survey of 774 doctors didn't measure how close they are to "pulling the trigger" on leaving practice. He said malpractice was not the only financial pressure on doctors, but, coupled with declining fees from insurers and other cost increases, "doctors are now facing cost increases they cannot adjust to."

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