Condition Critical: Ohio's Malpractice Costs

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In an examination room tucked away inside Fairview Hospital on Cleveland's West Side, Doctor Dan McLaughlin is preparing to see his next patient. McLaughlin jokingly calls himself a glorified plumber, but in fact, takes his profession very seriously. He's a vascular surgeon who treats mostly elderly patients for blocked arteries. His work is considered high risk, and that's part of the reason why his medical malpractice premium costs have catapulted more than 500 percent the past two years. With no relief in sight, McLaughlin is feeling the financial pain.

Dan McLaughlin: What do you do for the physicians or physicians who really have a pretty good track record but now find themselves uninsurable or at some outrageously high rate that has required someone like me to take loans the last few years so that I can stay in Cleveland, Ohio.

Annual loans amounting to upwards of $100,000 are forcing McLaughlin to reconsider his decision to stay in Ohio, where he grew up and where he wants to raise his family. He says the issue affects not only him, but also future generations of Ohio surgeons.

Dan McLaughlin: A lot of them or at least many of them are scratching their heads and saying, 'Well, it may be nice to get my training here but I'm not sure that I want to stay here to do my career because the environment right now is not friendly.'

Brain drain also troubles Dr. Kevin Cooper, a University Hospitals dermatologist who helped form a special insurance group that provides doctors at the hospital system with insurance relief.

Kevin Cooper: If personal bankruptcy after years of work and finally paying off student debts is your next option, it's not a real good carrot for attracting the best and brightest to our area.

But of chief concern is how the cost of malpractice insurance is hurting the delivery of health care in Ohio. That's according to Doctor James Tasse, who pioneered a local physicians' advocacy group.

James Tasse: The fact that the doctors are afraid of medical liability means that they're not performing procedures that they would have performed five years ago because they're afraid that they might be sued.

While there's little disagreement that high medical malpractice insurance rates are a problem, fingerpointing abounds as to who's at fault. Doctors applaud a limit on jury awards approved by state lawmakers in 2002. But trial attorneys like John Lancione say the law is unconstitutional; that it robs his clients of their rights. Lancione attributes higher premiums, not to frivolous lawsuits or excessive jury awards, but to what he calls the rise in medical errors and shady business practices on the part of insurance companies.

John Lancione: Every time they have had investments, every time they've cut the rates so far, they can't pay the claims against them, they blame somebody. I mean the Board of Directors of some these companies ought to be thrown out, just like they're throwing out people at Tyco.

Such allegations of corporate wrongdoing riles Melissa Denison, director of business development at Ohio Health Insurance Company or OHIC. OHIC is one of five insurance companies underwriting the bulk of medical malpractice insurance in the state. Denison characterizes OHIC's rate increases as "adequate" for covering their costs.

Melissa Denison: Insurance is one of the heaviest regulated industry there is. I can't speak for everyone in the industry, but I'm not aware of any fraud.

Controlling malpractice insurance rates won't be easy. Some state legislators say they need access to more information. Some are proposing that lawmakers have subpoena power to question insurance executives about the factors in their rate increases. Bill Ryan is president of the Center for Health Affairs, an industry association of Cleveland-area hospitals. Ryan isn't convinced that insurance companies are going to lower premiums any time soon.

Bill Ryan: They're going to want to see a pattern of cases that are upheld through the entire process of appeal that suggest that in fact jury awards have effectively been capped.

The Ohio Medical Malpractice Commission says it will recommend screening malpractice lawsuits before they're filed and require insurance companies to report more data about their costs. Still, according to Ann Wormer Benjamin, chairwoman of the commission and the Ohio Department of Insurance Director, premiums will continue to rise 10 to 40% this year alone.

Ann Wormer Benjamin: Very little that can be done for immediate relief to physicians other than potentially some kind of tax break, as I said, but I don't think that the Ohio budget would be able to afford that.

But physicians like Doctor McLaughlin say they can't afford to wait.

Dan McLaughlin: This is a problem that deals with money, and medicine has become a very big business and it's evolving into more of a business and my concern is that in the process of doing that are we going to lose a lot of that personal touch, compassion, caring side of it.

The Ohio Medical Malpractice Commission has an April 2005 deadline to submit its final report to lawmakers, who will consider whether or not to adopt the recommendations. In Cleveland, Tasha Cook, 90.3.

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