Medical Malpractice: Implications of Rising Premiums On Access to Health Care
General Accounting Office August 2003
GAO_03-0836

The General Accounting Office (GAO), a non-partisan independent research agency of the federal government, conducted a thorough and objective study of the consequences of the liability crisis and issued a report entitled "Medical Malpractice: Implications of Rising Premiums On Access to Health Care". While the report did not note substantial evidence of access to care issues for a number of providers, key findings illustrated the unique problems that the liability crisis poses for access to emergency care.

Language from the GAO Report:
"We confirmed instances in the five states where actions taken by physicians in response to malpractice pressures have reduced access to services affecting emergency surgery and newborn deliveries... For example, the only hospital in a rural county in Pennsylvania no longer has full orthopedic on-call surgery coverage in its emergency room (ER) because three of its five orthopedic surgeons left in the spring of 2002, largely in response to the high cost of malpractice insurance."

"Among several potential access problems we reviewed in Florida, the most significant appeared to be the reduction in ER on-call surgical coverage in Jacksonville. We confirmed that at least 19 general surgeons who serve the city's hospitals took leaves of absence beginning in May 2003 when state legislation capping noneconomic damages for malpractice cases at $250,000 was not passed. According to one hospital representative, the loss of these surgeons reduced the general surgical capacity of Jacksonville's acute care community hospitals by one-third. The administrator of the practice that employs these surgeons told us that at least 8 are seeking employment in other states to avoid the high malpractice premiums in Florida. Hospital officials in Jacksonville told us that other providers, including some orthopedic surgeons and cardiovascular surgeons, had also taken leave as of May 2003 due in part to the risks associated with practicing without surgeons available in the ER for support in the event of complications. Hospital and local health department officials said that the losses of surgeons have caused a reduction in ER on-call surgical coverage at most acute care hospitals in the city; the health department official said patients requiring urgent surgical care presenting at an ER that does not have adequate capacity must be transferred to the nearest hospital that does, which could be up to 30 miles away. Within the first 11 days after most of the physicians took leave, 120 transfers took place."

"Reductions in ER on-call surgical coverage and newborn delivery services have created access problems in certain areas of Mississippi. We confirmed that some surgeons along the Gulf Coast who formerly provided on-call services at multiple hospitals are restricting their coverage to a single ER and others are eliminating coverage entirely in an effort to minimize their malpractice premiums and exposure to litigation. Officials of two of five hospitals we spoke with in the three Gulf Coast counties told us they have either completely lost or experienced reduced ER on-call surgical coverage for certain services. These reductions in coverage may require that patients be transferred greater distances for services."

"Reductions in ER on-call surgical coverage have created access problems in Clark County (Nevada). To draw attention to their concerns about rising medical malpractice premiums, over 60 orthopedic surgeons in the county withdrew their contracts with the University of Nevada Medical Center, causing the state's only Level I trauma center to close for 11 days in July 2002. The center reopened after a special arrangement was made for surgeons to temporarily obtain malpractice coverage through the Medical Center and the governor announced his support for state tort reform, prompting the return of approximately 15 of the surgeons, according to medical center staff. Another hospital in the county has closed its orthopedics ward and no longer provides orthopedic surgical coverage in its ER as orthopedic surgeons have sought to reduce their malpractice exposure by decreasing the number of hospitals in which they provide ER coverage, according to a hospital official."

"Some areas in Pennsylvania have experienced reductions in access to emergency surgical services and newborn delivery services. For example, one rural hospital recently lost three of its five orthopedic surgeons. As a result, orthopedic on-call coverage in its ER has declined from full-time to only one-third of each month... Trauma services in Pennsylvania have also been affected in some localities. For example, a suburban Philadelphia trauma center closed for 13 days beginning in December 2002 because its orthopedic surgeons and neurosurgeons reported they could not afford to renew their malpractice insurance. The situation was resolved when a new insurance company offered more affordable coverage to the surgeons and the governor introduced a plan to reduce physician payments to the state medical liability fund, according to a hospital official."

"Access problems due to malpractice concerns in West Virginia involved ER specialty surgical services. One of the state's major medical centers lost its Level I trauma designation for approximately 1 month in the early fall of 2002 due to reductions in the number of orthopedic surgeons providing on-call coverage. During this time, patients who previously would have been treated at this facility had to be transferred to other facilities at least 50 miles away. The hospital's Level I designation was restored when additional physicians agreed to provide on-call coverage after the state extended state-sponsored liability insurance coverage to physicians who provide a significant percentage of their services in a trauma setting. The state's northern panhandle lost all neurosurgical services for about 2 years when three neurosurgeons who served the area either left or stopped providing these services in response to malpractice pressures, requiring that all patients needing neurosurgical care be transferred 60 miles or more, limiting patients' access to urgent neurosurgical care."

"Our contacts with 49 hospitals revealed that although 26 confirmed a reduction in surgeons available to provide on-call coverage for the ER, 11 of these reported that the decreases had not prevented them from maintaining the full range of ER services." (Consequently, 15 of the 49 hospitals contacted indicated that the reduction in on-call coverage in the ER had prevented them from maintaining the full range of ER services.)

"Because of the recognized limitations of Medicare claims data for these and other services, we used other methods to explore whether malpractice-related pressures had affected access to ER on-call surgical services and newborn deliveries and indeed found - and reported - evidence of access problems for these services in localized areas."

Medical Malpractice Liability Crisis Meets Markets: Stress in Unexpected Places
The Center for Studying Health System Change
Issue Brief No. 68, September 2003,
Berenson RA, Kuo S, May JH.

"Rather than treat patients in their offices, more physicians are referring patients to emergency departments. And many physicians, especially those practicing in high-risk specialties, are unwilling to provide emergency department on-call coverage because of malpractice liability concerns."

"HSC researchers have identified a range of other emerging physician responses to malpractice insurance concerns across the country, including referring more patients to emergency departments, safety net hospitals and academic health centers; refusing to provide on-call emergency department coverage; and declining elective referrals from safety net providers."

"In some communities, physicians were referring increasing numbers of patients after hours, or even during office hours, to hospital emergency departments, where patients can receive a complete workup in one visit, and the emergency department physicians and hospitals assume risk for a bad outcome. This type of defensive medicine could generate additional health spending by physicians unfamiliar with the patient and does contribute to crowding in emergency departments."

"Physicians' willingness to provide on-call emergency department coverage - a hospital's responsibility under the federal Emergency Medical Treatment and Labor Act, known as EMTALA - also has been affected by malpractice litigation concerns. Combined with the reality that many emergency department patients are uninsured, liability concerns have contributed either to certain specialist physicians either declining to provide on-call emergency department coverage or demanding payment from hospitals for taking calls or caring for uninsured patients in Phoenix, Orange County, northern New Jersey, Miami and Seattle. The converse is also true, with many specialists declining to accept elective referrals from emergency departments and safety net clinics and health centers, especially for uninsured patients. In some cases, physicians fear that low-income patients, with inadequate or no insurance, may not follow through on treatment, increasing the likelihood of a bad outcome and a malpractice claim."

 American Hospital Association Professional Liability Insurance Survey, March 2003

Percent of hospitals in crisis states reporting specific effects of increased professional liability expenses:

• More difficult to recruit physicians, 53%
• Loss of physicians and or reduced coverage in emergency departments, 45%
• Negative impact on hospitals' ability to provide services, 35%