| 04/16/2006 |
| No better time to press reforms |
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The medical malpractice insurance crisis, which
for years broadly threatened access to health care in the
region and the state, has abated somewhat. But the irony
hasn’t. Even though the issue is rooted in the availability
and costs of liability insurance, the state government never
included the insurance industry itself in the measures it took
to help manage the crisis.
Some of the improvement, as detailed by reporter Jeff Sonderman in a series last week in The Times-Tribune, is due to statutory and regulatory changes that have helped to significantly reduce the number of malpractice claims being filed. And the state government has paid more than $750 million in premiums over three years to the MCARE catastrophic insurance fund for doctors in high-risk specialties such as obstetrics, neurosurgery and orthopedics. If that program is renewed this year, the total will exceed $1 billion. What may be the single most important factor in malpractice rate stability, however, hovers in the background with scant notice from the state government. Liability insurers last year reported an overall 18 percent increase in profits, a total of $44.8 billion, and a 7 percent increase in reserve funds available for claim payments, to $427 billion. Given the robust health of the insurance industry, it is not particularly surprising that malpractice rates have stabilized and that more companies have resumed writing medical malpractice policies. It is surprising, however, that the state government’s only strategy for dealing with malpractice issues continues to be legislative and regulatory efforts to mitigate the industry’s risks. The insurance industry still has not been brought to the table. Rate stability, particularly for products that help to determine public access to health care, should be predictable rather than tied to the cyclical profit margins of insurance companies. And that means that they should be more closely regulated by the state government. The state Legislature should take the opportunity, while the insurance industry is flush and the malpractice crisis is in abeyance, to establish a regulatory mechanism to prevent the reoccurrence of wildly rising malpractice premiums. There is a great deal that it could do simply by borrowing from successful practices in other states. It could require all companies that sell any kind of liability insurance in Pennsylvania to also offer medical malpractice liability insurance, thus spreading the risk and limiting each company’s exposure. Also, it could establish levels of rate increases that automatically would trigger a public hearing and a regulatory determination of whether the increase is justified. In this region, some medical groups have been able to attract young doctors to the region. A group of well-respected medical and financial professionals is examining the potential of establishing a medical school in Scranton as a means of ensuring the availability of medical expertise. Too much is being invested by professionals and the public, and too much is at stake, for one of the major players to be left on the sidelines. The Legislature should undertake regulatory reform of the medical malpractice insurance system in order to deal systemically, rather than reactively, with future rate issues.
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