Malpractice: The State Steps In

The fast-rising cost of malpractice insurance led to a new medical crisis last week. A group of doctors in New York's Suffolk County threatened to treat only emergency patients after July 1 unless they get reasonably priced malpractice coverage, which may soon be unavailable from private companies. Anesthesiologists at two Mansfield, Ohio, hospitals had already carried out a similar threat for a week, forcing cancellation of several dozen elective operations. In response to a poll conducted by the Medical Society of the State of New York, many physicians said they would go even further: one-third declared that they would move out of the state if they could not obtain insurance; 42% said they would retire early.

Since neither the hard-pressed insurance companies nor the medical profession seems able to find a solution to the higher costs brought on by whopping malpractice awards (TIME, March 24), state legislatures have begun to take action. Across the U.S. they are enacting laws to provide at least emergency malpractice coverage. In Congress, several bills designed to provide federal protection for doctors and insurers are under consideration.

In Indiana, Governor Otis Bowen (who is himself a physician) recently signed a bill that limits the total award in any malpractice suit to $500,000, sets a ceiling on lawyers' fees, and establishes a panel to screen malpractice claims and weed out nuisance suits. The measure also establishes a fund, to be created from a surcharge on insurance premiums, to ease the burden on insurance companies by covering any award in excess of $100,000. Idaho has enacted a law limiting liability to $150,000 in cases involving one person, $300,000 in cases involving more than one, and establishing a limit on fees for lawyers.

Band-Aid Bills. Three bills await Governor Marvin Mandel's signature in Maryland. One would create a physicians' insurance company, another would establish a pool to cover doctors unable to obtain insurance from private companies, and the third would require that a suit be brought within five years of the treatment that caused the alleged injury.

In New York State, where the Argonaut Insurance Co. plans to cancel coverage for 27,000 of the state's physicians and 48 hospitals on July 1 (the company was denied a 196.8% rate hike last December), Governor Hugh Carey has proposed a three-part relief package. The Governor's plan would create a state insurance fund, shorten the statute of limitations on malpractice suits, and make it easier to discipline doctors who make avoidable errors. California's state senate has passed and sent along to the legislature's lower house emergency, or "Band-Aid" bills to guarantee malpractice coverage through the end of the year. Bills to limit liability or create state-sponsored insurance companies are being introduced in Tennessee, Michigan, Oregon, Pennsylvania and North Carolina. Congress is considering federal legislation that would reimburse private insurers for awards in excess of $200,000, establish arbitration and screening panels for malpractice claims, and spread payments of awards out over several years to ease their impact on insurance companies.

While the new legislation will help to protect doctors and ease the financial problems facing their insurers, none of the measures proposed--or enacted into law--thus far would do very much for the wronged patient. That omission is unfortunate. Though malpractice suits are sometimes frivolous and awards undeserved or unrealistically high, many claims are brought by patients grievously injured by the mistakes of their physicians.

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