Crisis in California

Mount Zion is one of San Francisco's largest hospitals and normally schedules from 40 to 60 operations a day. Last week, on its busiest day, only eleven were scheduled. Operating rooms at 45 other institutions in the San Francisco Bay Area were also unusually quiet --and with good reason. Having declined to pay what they considered prohibitively high premiums for malpractice insurance, 307 northern California anesthesiologists had refused either to renew their insurance policies or practice without coverage and had walked off their jobs.

The California walkout was the most drastic response yet to the steep rise in premiums set by one of the nation's leading malpractice insurers, Argonaut Insurance Co. of Menlo Park, Calif. (TIME, May 5). Claiming that soaring malpractice awards were causing it to lose money, Argonaut last January announced that beginning in May it would raise its premiums for Bay Area physicians by 200% to 300%. Most physicians reluctantly purchased at least temporary--and limited--coverage, but few of the area's anesthesiologists, whose premiums rose from $5,377 to as high as $22,704 per year, renewed their policies; the rest refused to perform nonessential work.

The majority of the 46 hospitals affected by the walkout have not scheduled any nonemergency surgery since May 1. As a result, St. Luke's was operating at only 44% of capacity last week; St. Francis Memorial reported that 118 of its 297 beds were empty. The lack of patients hit the hospitals right in their pocketbooks. Mount Zion Hospital and Medical Center laid off 20% of its staff. St. Luke's let 33% go. Union officials estimated that half of San Francisco's 9,000 hospital workers would be off their jobs by week's end.

Higher Costs. Joseph Zem, director of St. Luke's, believes that the hospitals are headed for disaster if the strike continues; ordinarily they derive as much as half their revenues from nonemergency surgical admissions. Patients, too, are likely to be hurt by the current crisis. Hundreds have been inconvenienced. Some of those who can obtain care are finding that it costs more. Doctors are passing the increased malpractice costs along to their patients.

Neither local politicians nor the anesthesiologists--who last week marched on the state capitol in Sacramento to demand legislative action--see any speedy end to the stalemate. In fact, the crisis in California worsened last week. Supporting the San Francisco protest, anesthesiologists in the Los Angeles area took a day off, leaving most operating rooms in 275 hospitals virtually empty.

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