WASHINGTON – Payouts from malpractice suits against Maryland doctors have risen sharply in recent years, climbing from an average of $165,000 in 1993 to $237,000 in 2002, according to an analysis of the National Practitioner Data Bank.
That is either an “unbelievable crisis” or a mere reflection of the up-and-down cycle of insurance that has seen lower premiums in recent years — depending on who is talking.
What is certain is that the Medical Mutual Liability Insurance Society, which insures 70 percent of Maryland doctors, has already announced that it will raise premiums 28 percent on Jan. 1 because of what it says are skyrocketing awards from malpractice suits.
“It’s very unfortunate, and it’s very difficult for the physicians,” said Jeff Poole, chief operating officer for Med Mutual.
According to its own estimates, Med Mutual says it paid almost $74 million in malpractice costs in the first 10 months of 2003 — up from $51 million for all of 2002.
The $51 million that Med Mutual paid last year was just part of the statewide total of $80 million that the National Practitioner’s Data Bank said was paid out last year on malpractice suits in Maryland. That was up from just $50 million 10 years ago, according to a Capital News Service analysis of the data.
But those total increases are a little less shocking when adjusted for inflation. In constant dollars, total awards grew by about 25 percent, and the average payout grew by about 14 percent.
The National Practitioner Data Bank, which went into operation in 1990, was established by federal law as a resource for hospitals to check on the background of doctors.
An analysis of the last 10 years shows that the number of lawsuits against Maryland health care providers has gone up and down — anywhere from 270 to 370 are sued every year. The amount of the jury awards and settlements has generally been on the rise, but has gone down some years as well.
But Med Mutual says the data bank is incomplete and does not appear to include every case of malpractice. Whether or not the data bank’s 2003 data show a significant spike in malpractice payouts, Med Mutual will continue to provide its own data showing a pending crisis.
Doctors and insurers have long complained about malpractice costs spinning out of control. A spike in the number of malpractice suits in the 1970s led to the creation of Med Mutual. The second spike, in the 1980s, led to a cap on damages. This time, doctors and insurers are concerned with the amount of malpractice payouts.
“I don’t know what’s going to stop it,” Poole said. “It’s unbelievable.”
The state’s medical society, MedChi, is planning a Jan. 21 rally in Annapolis to press lawmakers to lower the cap on non-economic damages from $635,000 to $350,000, to limit attorneys’ fees and require that large awards to be paid over time.
But Sabrina Friedman, a professional liability manager for the Lutherville-based insurance agency PSA, said the experience of the 1970s and 1980s demonstrates that malpractice costs could top off.
“It’s going to turn around,” she said. “It’s extremely cyclical . . . . Things level off again.”
Friedman said many doctors do not realize they are paying the same premiums they were 15 years ago, when there were no caps on damages.
Opponents of malpractice reform also argue that a disproportionate number of claims are leveled against a few doctors, so lawsuits have helped weed out the bad apples. But Michael Preston, president of MedChi, called that a “laughable assertion.”
If the same doctors committed malpractice year after year, they could be removed, which would keep them from driving up insurance premiums, Preston said. But it is impossible to identify the troublemakers in advance.
The national data bank does not identify doctors by name, but by a code. While it shows that several lawsuits were against the same providers, most doctors do not show up more than once.
Preston fears that higher premiums will force doctors out of business, particularly those in high-risk professions like obstetrics. Physicians are only now receiving their insurance bills for next year.
“Nobody can offer a service if they’re losing money at it,” Preston said. “Like any business, they face a squeeze.”
Roger Wolf, a University of Maryland School of Law professor who sponsored a roundtable on medical malpractice this fall, noted that most of the malpractice payouts have been settlements, not jury awards. He said he believes that most of the doctors who settled did so not because they wanted to make the suit go away, but “because they felt they had liability.”
As for premium rates, they might have been artificially lower in earlier years when many insurance carriers got into the malpractice business, Wolf said.
“It is a cycle,” he added. “Premiums will go up again no matter what you do.”