The Maryland Hospital Association on Tuesday released an analysis that shows rising medical malpractice premiums are affecting not just the health care industry but the entire state economy. The report also lays the blame for the rise on a rapid escalation in jury awards and settlements in malpractice cases.
Reduced spending by doctors and hospitals as a result of the rising premiums will cost the state 1,850 jobs this year, and 3,000 next year, the analysis found. Lost business sales, meanwhile, will total $171 million this year and $295 million next year, said economist Anirban Basu, author of the report.
Basu said rising settlement and jury verdicts and a drop in the number of insurers is to blame. The economist said the problem of rising jury verdicts is highest in Baltimore and Prince George's County, but exists statewide.
The analysis found the average cost paid per medical malpractice claim rose from $234,000 in 2000 to $386,000 in 2003.
While runaway jury verdicts are often blamed, a review by The (Baltimore) Sun found the state's largest medical malpractice insurer, the Medical Mutual Liability Insurance Society of Maryland, settles 90% of claims before they reach a jury. The company has also added hundreds of doctors to its rolls in recent years without verifying whether the doctors have histories of repeated malpractice claims. Once an insurer accepts a doctor, state regulations make it tough for the insurer to drop bad doctors, the newspaper reported.
Basu said the number of claims, however, has not risen in risen years, only the malpractice payouts.
Ed Hale, chairman of the Maryland Business Council and CEO of First Mariner Bank, urged the state Legislature to deal quickly with the matter, but expressed skepticism that lawmakers, many of whom are lawyers, are going to want to rein in rising jury awards.
"You can sugar coat it all you want, but lawyers aren't going to want tort reform," Hale said at a press conference at which the MHA report was released. "Doctors should be held to a higher standard, but tort reform is the key."
Doctors have warned that without legislative action, many will stop practicing or leave the state, especially those in high-risk specialties such as obstetrics.
Maryland Gov. Robert Ehrlich and state House Speaker Michael Busch revived Tuesday what they called intense negotiations to find a way to stop a looming 33% increase in medical malpractice insurance premiums.
"It's important to have the dialogue," Busch said after an hourlong meeting with Ehrlich. "It would have been beneficial to have it back in September, but at least we're having it in November."
The goal is to agree on a bill that the General Assembly could approve in a special session before the end of the year. Doctors' 2005 premium payments are due in two weeks, a deadline that could force many to leave their practices.
"The expectation from these physicians out there is that there would be some kind of relief," Busch said.
Miller and Busch have pushed for a "stop loss" fund that would hold premiums at the 2004 level and reimburse insurance companies if premiums aren't enough to pay malpractice claims. Ehrlich's bill included such a fund, but Democratic leaders were unhappy that he did not provide a funding source. Some have proposed a 2% tax on HMO premiums, which Miller has supported.
"The House is willing to find a funding source," for the fund, Busch said. "The House is willing to take as much tort reform as the Senate and the governor can agree on."
Meanwhile, a doctors advocacy group intensified the pressure on Ehrlich and lawmakers by planning a rally in Annapolis today. And dozens of doctors in Maryland's Washington and Prince George's counties are postponing elective surgeries or closing their offices this week to press state officials for medical malpractice reform.