Medical Professional Liability Pressure Builds as Market Awaits Shift

A widely held consensus that frequency within medical professional liability has stabilized after a five-year decline is giving way to a sense of anticipation about the cycle’s next turn.

An inability to hang the trend on a single clear-cut driver has created a challenge for those trying to identify what factors may drive an expected uptick in claims, and whether those will be short-lived or part of the permanent landscape.

Improved patient safety measures, doctors growing more risk averse and even state-level tort reform measures have been cited as factors contributing to a drop in claims frequency.

Soft market conditions persist in the medical professional liability space and provide a stark contrast from the early part of last decade. A composite of the industry’s 2003 combined ratio of 122.5 dropped steadily to reach 82 in 2008, according to an April 2009 A.M. Best special report on the U.S. medical professional liability market. The loss ratio declined 45.1 points to 61.1 during that same stretch.

Pricing pressure will continue to be an issue moving forward, according to Henry Witmer, an assistant vice president at A.M. Best Co.

“The demonstrated ability to price the insurance product properly is crucial to long term sound operating performance and balance sheet strength,” Witmer said. “Along with conservative loss reserving practices, accurate pricing will position a company well, regardless of whether frequency rates and loss cost severity rise or fall.”

W. Stancil “Stan” Starnes, chairman and CEO of ProAssurance Corp., said frequency has gone down before, but never stayed down.

“If we don’t know why it’s down, why would one be sanguine about the prospects of it staying down this time?”

Starnes said nobody knows for sure why it’s fallen. It’s dropped off in states that have used tort reform measures to cap noneconomic damages in malpractice cases, yet also dropped in states that haven’t opted for legal reforms.

Starnes said most would describe severity costs as increasing anywhere from 4% to 5% a year, a stable and manageable number in his estimation.

“If frequency goes up as we predict, and if severity continues to go up, which it always has, then medical liability premiums will go up,” Starnes said. “They have to. If you’re in a specialty that has a higher risk environment, your premiums will go up more.” Continue Reading via Insurance News Net

Post Tort-Reform Shift Takes Hold in Texas Market

Submitted by Hal Williams, Broker at The Keane Insurance Group

More carriers fighting over a shrinking pool of premium can be a problematic scenario, unless you’re a physician practicing medicine in Texas.

Pockets of industry data show how a 2003 tort reform measure has reshaped the once-troubled medical professional liability market in the Lone Star State.

Since 2003, medical professional liability direct premium written in the state has dropped 48% to $329.8 million in 2008, according to BestLink, which provides online access to A.M. Best’s Global Insurance & Banking Database.

The number of carriers actively writing coverage in the state as of September 2003 has increased from four to more than 13 at the end of 2009, according to the Texas Department of Insurance. Rates on average have declined 27.5%, according to Texas DOI.

Nearly 4,100 physicians applied for licenses in 2009, up 60% from six years earlier, according to the Texas Medical Board.

“For proponents of tort reform, people are looking to Texas as the poster child,” said Chad C. Karls, a principal and consulting actuary at Milliman.

Karls said the downward cost shift in providing medical professional liability coverage in Texas didn’t result from lower severity, as one might expect from a cap on noneconomic damages.

“The number of claims per physician fell off quite significantly post tort reform,” he said.

The measure that Texas voters authorized the state’s legislature to limit noneconomic damages for plaintiffs, a move designed to add constitutional layer of protection against challenges to the law. On Feb. 4, the Illinois Supreme Court overturned a state law in which the legislature established a $500,000 cap on noneconomic damages that could be sought from physicians ($1 million against hospitals), deeming such limits unconstitutional.

In Texas, it’s believed its $250,000 cap has taken what can be an emotionally charged and subjective decision off jurors’ hands, and also eliminated uncertainty surrounding runaway verdicts. Continue Reading via Insurance News Net

Space invader: Meteorite hits Virginia doctors’ office

Falling at 220 miles per hour from an asteroid belt, a baseball-sized meteorite crashed into a Lorton, Va., family practice. Late in the afternoon on Jan. 18, family physician Marc Gallini, MD, was swamped with patients and running behind. Physician assistant Susan Messing helped out by seeing Dr. Gallini’s last patient, using exam room No. 2. Ten minutes after that visit ended, around 5:45 p.m., Dr. Gallini and family physician Frank Ciampi, MD, were finishing paperwork in their offices when they heard what sounded like bookshelves crashing to the floor. Dr. Gallini found a trail of debris in the hallway. Inside the exam room were fallen insulation and three small pieces of rock.

“I thought it was something that fell from a military or cargo plane,” he said.

The rock landed near where Dr. Gallini would have been, seated on a stool next to a patient, had Messing not seen that last patient. It wasn’t until 10 a.m. the following day, when the office manager’s husband recognized the half-pound magnetic rock as a meteorite, that the doctors began to understand what had happened. Overnight, the two-doctor practice in northern Virginia became an international sensation, attracting scores of media, amateur astronomers and meteorite hunters searching for pieces of the space rock that may have broken apart as it streaked to earth. Continue Reading via AMedNews.com

The Keane Insurance Group remains dedicated to Illinois physicians, tort reform, despite disappointing State Supreme Court decision

St. Louis, Missouri (February 4, 2010)— The Keane Insurance Group, one of the fastest growing medical professional liability insurance carriers in the country, expresses its disappointment with the Illinois Supreme Court ruling to overturn tort reform legislation, which placed limits on non-economic damages in medical liability cases. This legislation, which has been in effect since August 2005, placed limits on “pain and suffering” at $500,000 per case for doctors and $1 million for hospitals. The Keane Insurance Group has closely followed the Illinois Supreme Court deliberations and remains committed to defending the reputations of the physicians and medical care providers of Illinois. We are disappointed with the outcome of today’s ruling in Illinois. Limiting the awards on medical professional liability cases protect physicians from frivolous lawsuits and helps manage the cost of practicing medicine in the state. The Keane Insurance Group stands with the physicians in the support of efforts to construct new tort reform laws.

About  The Keane Insurance Group

As brokers for medical professional liability insurance to physicians, surgeons, and related medical service providers, our clients know that we speak with the collective support of nearly 5,000 physicians, surgery centers and hospitals as well as their employees. The Keane Insurance is dedicated to providing malpractice coverage options that support and protect medical practitioners in today’s complex health care environment.

For more information visit, www.keanegroup.com

Rafferty backs legislation to keep doctors in Pa.

HARRISBURG — Seeking to keep doctors from fleeing Pennsylvania because of skyrocketing malpractice insurance rates, state Sen. John C. Rafferty Jr., R-44th Dist., joined medical representatives at a Harrisburg news conference Wednesday to push for legislation he is sponsoring that would create an MCARE Commission to oversee the future disbursement of MCARE Funds.

Rafferty was joined by Dr. Wayne Sebastianelli, president of the Pennsylvania Orthopaedic Society, who said the legislation is crucial to keeping young orthopaedic surgeons in the state and make health care available for more state residents.

Under Senate Bill 1174, the MCARE Commission will consist of representatives from the physician and hospital communities, the four legislative caucuses, the governor’s office and a medical student.

“The major focus of this legislation is to allow practitioners who pay into this fund to control its disbursements and to keep insurance rates at a high level to protect doctors and patients,” Rafferty said. “The MCARE fund should not be used as a checking account to be tapped by the administration when state funds are low. Those who pay in should be able to determine how it is used.” Continue Reading via The Mercury

Illinois Supreme Court Strikes Down Major Piece of Medical Tort Reform Law

The Illinois Supreme Court has declared unconstitutional a state law limiting plaintiffs’ damage awards for pain and suffering resulting from medical procedures gone wrong.

Ken Stoller, senior counsel with the American Insurance Association, said doing away with a cap will “subject medical malpractice insurers to excessive verdicts and settlements, setting back any progress in the Illinois market. We are disappointed in the ruling and fear a return to a time when the market was in crisis and some Illinois citizens were without access to health care.”

The Court found that portions of a 2005 statute that capped noneconomic damages at $500,000 against doctors and $1 million against hospitals violated the separation of powers between the Illinois General Assembly and the judiciary.

The case, Lebron vs. Gottleib Memorial Hospital et al, was filed by Frances Lebron, the mother of baby Abigaile Lebron, who was born at Gottlieb with “numerous permanent injuries” allegedly sustained during a Caesarean procedure, the court noted. Lebron filed suit against the hospital and her medical team in 2006, and in 2007 the Cook County Circuit Court found the caps unconstitutional (BestWire, Nov. 13, 2007).

The case was appealed and the American Medical Association filed an amicus curie brief with the high court, urging the justices to uphold SB 475, the bill that reformed medical liability laws in the state. Continue Reading via Insurance News Net

Caps are unconstitutional, Illinois Supreme Court rules

Submitted by Hal Williams, Broker at The Keane Insurance Group

The Illinois Supreme Court has overturned the state’s medical malpractice reform law. 

The decision has not yet been posted to the Court’s site.

The Court’s decision reverses a 2005 state law capping non-economic damages — such as pain and suffering — for physicians at $500,000 and hospitals at $1 million. 

The Court based its decision on a case that arose from Cook County, LeBron v. Gottlieb Memorial Hospital, involving the severe disability of a young girl, Abigaile Lebron. 

Cook County Circuit Judge Joan Larsen ruled that caps were unconstitutional in LeBron in 2007. 

The American Tort Reform Association (ATRA) reacted to the decision with “considerable disappointment.” 

“The liability limits put in place in 2005 were perfectly reasonable, and they had begun to stabilize the cost of medical malpractice insurance for health care providers throughout the state,” said Tiger Joyce, ATRA president. Continue Reading via Madison Records

Hospitals Dispute Medtronic Data on Wires

Some leading hospitals are reporting failure rates for Medtronic Inc.’s fracture-prone defibrillator wires — including among young people — that are significantly higher than what the company has publicly disclosed.

Medtronic, a medical-device maker, pulled the Sprint Fidelis defibrillator wires off the market in 2007 and substituted another type of wire with a lower failure rate. But an estimated 150,000 Sprint Fidelis wires, which are known as leads, remain implanted in U.S. patients. The company, and most doctors, generally advise patients not to have the leads surgically removed if they haven’t fractured, because of the risk of complications.

Medtronic says its own research shows the Sprint Fidelis leads survive for three years at least 95.4% of the time, for a failure rate of 4.6%. Reports from hospitals including the University of Rochester in New York state, the Minneapolis Heart Institute, the Mayo Clinic and the University of Ottawa, say the overall failure rate for Sprint Fidelis leads is as much as two times as great as the company’s own data indicate. Some of the hospitals also report that the rate of fracture accelerates as the leads age.

“The hazard of [Sprint] Fidelis lead fracture is increasing exponentially with time and, based on our data, occurring at a higher rate than the latest manufacturer’s performance update,” doctors at the University of Rochester concluded in findings published in January’s American Journal of Cardiology. The report said the three-year survival rate of 426 Medtronic leads inserted in the hospital’s patients was 90.8%, meaning 9.2% failed. Some of the researchers have received consulting fees or research grants from Medtronic and its competitors.

Medtronic says its own findings are more reliable because they come from multiple hospitals. “You have to be careful of small-center studies,” said David Steinhaus, medical director of Medtronics’s cardiac-rhythm division. He called the company’s data “very robust” and “as accurate as any data out there.”

Defibrillators are metal-encased boxes implanted in the shoulder area and connected via leads threaded through veins to the heart. In the event of sudden cardiac arrest, a defibrillator is programmed to dispatch a powerful life-saving shock, akin to being kicked by a horse, people who have experienced it say. That jolt is supposed to correct the faulty heart rhythm. Continue Reading via Wall Street Journal

Doctors Sue To Stop Unsupervised Nurse Anesthetists from Administering Anesthesia

Surgical patients are being put at risk because a new California regulation allows nurse anesthetists to administer anesthesia without the supervision of a physician, claims a lawsuit filed against California Gov. Arnold Schwarzenegger by two large physician groups Tuesday.

“It’s a patient safety issue when you have absolutely no supervision from a physician; it’s very risky,” says Francisco Silva, general counsel for the California Medical Association, which filed the complaint jointly with the California Society of Anesthesiologists.

He adds that there isn’t a severe shortage of anesthesiologists to require the revision. “Our concern is, no one has shown that there was ever the need to require doing something this drastic,” Silva says.

Additionally, the governor “completely ignored” federal law, which requires a number of procedural steps and consultations with state licensing agencies before taking the action, Silva says. The doctors last year asked Schwarzenegger to withdraw his June letter, but “the governor refused … asserting that it was consistent with California law,” according to the lawsuit, which was filed in San Francisco Superior Court. Continue Reading via Health Leaders Media

Hospitals eye the iPad for low-cost paperless records

Unless you have absolutely no imagination, you’ve probably noticed the resemblance of the iPad to one of those cheap little clipboards that your friendly neighborhood doctor carries around on rounds. Apple is rumored to be making its own rounds of hospitals marketing the new über-iPod touch, having visited a hospital in LA in the recent weeks.

What’s so great about tablets for health care? When connected to a Wi-Fi network, they’re perfect for looking up medical information or working patient charts while on the move. The iPad in particular would be perfect, having no keyboard to disinfect or lid hinges to break. In addition, the most expensive Wi-Fi iPad is priced at just US$699, while many traditional Windows Tablet PCs used in health care start in the neighborhood of $2,000. Continue Reading via TUAW.com