Friday, June 06, 2003

By Christopher Snowbeck, Post-Gazette Staff Writer

The rising cost of court payouts and legal claims is a bigger source of Pennsylvania's malpractice insurance troubles than any financial problems in the insurance industry, says a report being released today.

The 62-page study by the Project on Medical Liability in Pennsylvania, funded by the Pew Charitable Trusts, notes that the state has experienced high jury awards in malpractice cases, particularly in the Philadelphia area, but it stops short of endorsing caps on malpractice jury awards, an issue that may be voted on next week in the state House.

Instead, the authors say the only short-time fix for the malpractice premium problem is providing subsidies to doctors.

"If you want to do something that will have an immediate impact, there's not much you can do overnight except move the money around," said Randall R. Bovbjerg, a researcher at the Urban Institute and one of the authors.

Many doctors have argued that limiting pain-and-suffering awards in malpractice cases will help stem the increase in insurance premiums. Trial lawyers have argued that the increase has been due more to the insurance industry underpricing premiums in the past and then suffering from the stock market's impact on its investments.

But the study said that the medical malpractice problem is bigger than either of those issues, and challenges everyone to figure out a better way to detect medical injuries and pay for them, as well as prevent medical mishaps.

"In the long term, this is about social choice, about how you're going to deal with medical injuries -- finding them, paying for them and trying to prevent them," Bovbjerg said.

The report acknowledges that Pennsylvania has one of the worst situations in the nation in providing affordable liability insurance for doctors and hospitals.

It said Pennsylvania exceeds national averages for legal costs because of high claims rates and payouts. Total payouts adjusted for population are twice the national average in Pennsylvania and are growing faster than average.

The problem is particularly acute in Philadelphia, where plaintiffs are twice as likely to win jury trials as in the rest of the nation, and where a substantial percentage of cases results in verdicts greater than $1 million, the report said.

But the impact of all this on health care in the state is unclear. While doctors have talked about physicians fleeing Pennsylvania -- particularly the eastern part of the state -- the Pew report stops short of such dramatic claims.

"Access problems, should they be detected, may be limited to certain regions, patient subgroups or physician subspecialties," the report states.

Proponents of caps on pain-and-suffering awards in malpractice cases believe the Pew report furthers their cause.

"I think we see the report as largely confirming a lot of the conclusions that our data have driven us to," said Roger Mecum, executive vice president of the Pennsylvania Medical Society. "They've documented the enormous cost of the liability crisis. ..." and the fact that "this is largely driven by large legal costs, both payments and claims."

Mark Phenicie, legislative counsel for the Pennsylvania Trial Lawyers Association, said the report's citing of higher jury awards in Philadelphia refers to a problem the Legislature already has addressed. Act 103 put a stop to the practice of "venue shopping," in which lawyers could seek to have cases heard in Philadelphia when the malpractice occurred in a neighboring county.

"I don't think there's any question that Philadelphia juries tend to be more liberal in awards," he said.

Mecum and Phenicie endorsed the idea of subsidies to doctors as a short-term fix, although it's unclear where the money would come from, considering the tight state budget.

Mecum said he was interested in seeing more direct discussion of caps in future Pew reports, as both doctors and lawyers view the project's principal investigator, Dr. William Sage of Columbia University, as opposed to the sort of caps called for by the Pennsylvania Medical Society.

Christopher Snowbeck can be reached at csnowbeck@post-gazette.com or 412-263-2625.