Considering Alternatives to Medical Malpractice Insurance
In this blog we have often discussed that it is not medical malpractice lawsuits that are driving doctors out of practice in some states, but, rather, it is the rising cost of medical malpractice insurance which drives doctors out of practice. For example, the obstetrics crisis in neighboring New York was brought on by the possible approval of a $50,000 surcharge on every medical malpractice insurance policy for an obstetrics doctor. Statistics from a recent report by the Manhattan Institute for Public Research show that on average, costs at least twice as much for doctors as the amounts paid to innocent victims of medical malpractice (including lawyers' fees). It seems, then, that doctors might be able to save money by taking the risk of not having insurance.
In fact, many doctors in Florida (35 % in the Miami area, 25 % in Broward County, 21 % in Palm Beach County, and 12 % statewide) are trying this very solution (allowed under a state law), and for them it works well. Doctors know that bankruptcy laws will protect them in the event of a large decision against them, and, at any rate, doctors are not obligated to pay more than $250,000 per medical malpractice award, and no more than $750,000 per year. When doctors can be asked to pay $200,000 or more per year for premiums, but only have a medical malpractice claim every eight years on average, the math for doctors is clear. And financial advisers have begun specializing in sheltering doctors' assets from malpractice verdicts. They advise doctors to drop coverage and, if sued, offer patients a paltry settlement or no settlement when the doctor goes bankrupt.
This is clearly "solution unsatisfactory" to the problem for patients and society as a whole, even if we discount the corrosive effect such cold calculations have on the morality of the medical profession. If a doctor makes a mistake, a person can be permanently disabled or can die, leading to a life of hardship for dependants. And, without money from insurance companies or doctors, the disabled patient or his or her dependants end up depending on the state for support.
Even Florida legislators could see the flaw in the system, but their attempt to fix the problem is just as botched as the initial flaw. To make insurance a better option, legislators passed a law in 2003 limiting damages for pain and suffering to $500,000 for most cases, $1,000,000 for wrongful death cases. In response to this, medical malpractice insurance rates have fallen by 10 %, but insurer profits have grown by 20 %.
If doctors are to be allowed to go without insurance, they must face the full consequences of their mistakes. At the very least, every dollar a doctor earns by providing care must be vulnerable to medical malpractice settlements. This gives doctors a very real incentive to provide good care. An even better solution might be to force doctors to pool their money, so that one doctor is vulnerable to the mistakes of another doctor. This would encourage doctors to police one another, something that is currently taboo. A very few doctors are responsible for the vast majority of medical malpractice claims. According to a study by Public Citizen, less than 5 % of Pennsylvania doctors (all of whom had more than 3 medical malpractice settlements a year) were responsible for more than 50 % of the payouts. Less than 11 % of doctors were responsible for over 84 % of payments. Simply getting rid of bad doctors would be a tremendous stride toward reducing the cost of medical malpractice to the population as a whole.
If you have been hurt as a result of a doctor's medical malpractice, contact an experienced medical malpractice lawyer at Pomerantz, Perlberger, and Lewis, LLP today for a free initial consultation.
