Is There a Doctor in the House State?

The number of applicants to medical schools in the State of Illinois is down 33%. In Aurora there used to be 5 neuro-surgeons who did brain surgery, now there are 2 (but some weekends there are none!). Some counties in Illinois no longer have an obstetrician to deliver babies. Recently a patient was hospitalized at a hospital about the size of our Aurora hospitals and only twenty minutes from here. The patient fell and hit his head and there was bleeding inside the skull that put pressure on the brain. There were no neurosurgeons available locally so hospitals in Chicago were contacted but the neurosurgeons there were already working over their capacity and wouldn't accept the patient. Finally a neurosurgeon in Peoria agreed to take the patient. The patient was put in a helicopter - and died on the way to Peoria . Yes, we're starting to notice a doctor shortage. Doctors - not just neurosurgeons and obstetricians - but doctors of all sorts are leaving Illinois or just deciding not to come here in the first place. What's going on?

It is no secret that the United States of America is the most litigious (lawsuit-happy) society in the world. The number of lawsuits filed and the number of dollars awarded in verdicts or settlements continues to climb dramatically. Nowhere are those facts more in evidence than in the area of medical liability (malpractice). Not surprisingly the issue of the availability and affordability of medical liability insurance has reached CRISIS proportions in Illinois and in 18 other states around the country. We think it is important that you understand the scope of the problem and a potential solution.

Increases in the number of lawsuits and the size of judgments (verdicts in court) and settlements (out of court) have, of course, resulted in increasing costs for medical liability insurance premiums. In the past those increases were orderly and rational and the insurance companies could reasonably predict how much they would have to have in reserves to pay out claims and settlements and they adjusted their premiums accordingly. But something changed in the last five to ten years. The size of verdicts and settlements suddenly surged astronomically. Multimillion-dollar lawsuits became commonplace occurrences. The insurance companies, as expected, compensated by raising premiums but couldn't keep up with the escalating size of settlements and judgments. With no end in sight and the sky seemingly being the limit, many of them got out of the business of writing medical liability insurance and others simply stopped doing business in the states where the crisis was/is most severe. The St. Paul Insurance Companies was the largest provider of medical liability insurance in the country. Its medical liability insurance product line incurred over one billion dollars in losses and it stopped writing medical liability policies and got out of the business of medical liability insurance entirely in 2002.

A few years ago there were over 30 insurance companies selling medical liability insurance in Illinois . Three years ago that number was down to 16. Two years ago it was 9.

Now it is 4! These are not companies that have gone out of business. They have just stopped doing business in Illinois while continuing to provide insurance for physicians in other states where the liability climate isn't so adverse.

Illinois , you see, is one of the 19 "CRISIS" states in the country where the medical liability situation is the worst. Indiana and Wisconsin , on the other hand, have much more balanced medical liability laws. In any case, it is no surprise that those companies still doing business in Illinois have had to increase their premiums dramatically - so dramatically as to no longer be affordable by many physicians in many specialties. As a result many physicians in Illinois are limiting the scope of their practice (try to find a neurosurgeon to operate on your brain aneurysm), retiring prematurely (while their skills and experience are greatest) or moving to states where the liability climate isn't so punishing. All of that results in patients having fewer choices of fewer good doctors to take care of their healthcare needs.

And that impacts all of us.

So, why did this happen? First, let's make one thing clear. Medical malpractice does occur and those patients who are harmed need to be fairly compensated for their injury and their losses. But remember that of all malpractice suits filed, less than 15% of them result in any settlement or verdict against the doctor. That means that over 85% of the lawsuits are ultimately found to be groundless. Just defending those "frivolous" suits puts an enormous burden on the system and costs the insurance companies a lot of money. But in the cases where money is awarded, there are two types of monetary awards. The first is called "economic damages", which covers paying for the cost of the care needed by the patient to treat the problem that resulted from the error, paying for lost salary and wages, paying for the cost of anticipated related future medical care, etc. Those "economic damages" can be easily and reliably calculated and they are predictable so that insurance companies can plan for them. The second type of monetary award is for "non-economic damages", otherwise known as "pain and suffering". While economic damages are measurable and objective, non-economic damages are not measurable and are subjective and this is the area in which awards have gotten entirely out of control. Recently in Illinois there was a case in which a child died and economic damages were in the vicinity of one million dollars. But non-economic damages of 29 million dollars were tacked on for the parent's (and the child's) pain and suffering! In Florida (another medical liability insurance crisis state) 77% of all dollars awarded in malpractice suits are attributed to non-economic damages.

In Texas (another crisis state) the average medical liability award is 2.1 million dollars and nearly 1.5 million dollars (70%) of that is attributed to non-economic damages. Non-economic damages are clearly the area where settlements and judgments have gotten totally out of control. And, by the way, a recent study done by the United States Department of Health and Human Services showed the approximately 55% of all dollars awarded in medical liability actions go into the pockets of the lawyers!

So how can this problem be resolved? Thus far there has been only one solution that has been successful. The State of California passed its Medical Injury Compensation Reform Act (MICRA) in 1975. What that legislation did was place a “cap” or limit on the amount of money that could be awarded for non-economic damages at $250,000.00. There is no limit at all on the amount that can be recovered for measurable economic damages. Since 1975 the average annual premium nationally for medical liability insurance has increased a total of 505%. In that same time the average premium in Florida has increased 1,927%! The premiums in California, however, have increased “only” 167%. So today premiums for medical liability insurance in California are, on average, 40% lower than other states. The number of suits hasn’t been reduced and California, in fact, that state has a higher frequency of claims than the national average. But, despite having more claims with which to deal, the suits are resolved on average 35% faster. The only thing that has changed has been the placement of a limiton how much can be awarded exclusively for pain and suffering. And every state in which similar legislation has been passed has seen similar results.

Illinois is one of nineteen medical liability insurance crisis states. Every day young doctors who can choose to start practice in Illinois, Indiana or Wisconsin decide not to come to Illinois because of malpractice insurance issues. Doctors who used to do necessary but high-risk procedures no longer do them, leaving patients to travel many miles and sometimes across state lines to get the necessary care. Physicians who have honed their surgical skills over twenty or more years of experience retire in their fifties, no longer willing to take the risk that one lawsuit can bankrupt them. It all results in fewer highly skilled doctors to care for the people of Illinois and that is bad for all of us. There is a solution that works – “caps” only on non-economic damages. A recent poll showed that over 75% of the Illinois citizens polled favored just such a limit. Trial lawyers oppose such changes and their powerful lobbying groups in Springfield have kept the Illinois House and Senate from passing the necessary legislation. The medical liability insurance crisis in Illinois may not yet have directly affected you but by the time it does it may be too late. If you agree with over 75% of your fellow Illinois citizens that medical liability reform in the form of a cap on non-economic damages is the solution to the crisis we all face, please contact your Senator and your Representative and ask them to support such reform. We’ll be happy to provide you with names, addresses, e-mail addresses and phone numbers if you need them.

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