Hospitals’ medical malpractice crisis

Hospitals’ medical malpractice crisis

Zinkewicz, Phil

Although this subject is not often discussed, hospitals are suffering

Earlier this year, 4,000 physicians in New Jersey closed down their practices-for a day, that is. They didn’t endanger the public in any way. Emergency services at hospitals continued, as did scheduled office visits for patients with serious illnesses, such as those who were undergoing chemotherapy. But for all other kinds of treatment, physicians just took the day off, not to golf, but to journey to the state capital and voice their frustration over soaring medical malpractice premiums.

Medical malpractice crises are nothing new to the insurance industry. There was a crisis in the 1970s and another in the 1980s. The earlier one was primarily a crisis of availability as insurance left the marketplace, leading to the formation of provider-owned companies that offered coverage at much higher rates than the traditional marketplace. In the 1980s, the crisis was one of affordability. Insurers found it necessary to raise rates dramatically in response to surging claim frequency and severity.

But this crisis is different from both of those in the sense that, this time, the legal profession has come under siege because of a more heightened public awareness of physicians’ plights.

When those New Jersey physicians stopped their normal work hours and took the time to march on Trenton, they did two things. First, they managed to grab headline news, both in the nation’s dailies and on national television. Second, and perhaps this is even more important, they brought the issue of soaring medical malpractice costs for doctors into the minds of the general public.

But what about medical malpractice woes for hospitals? To date, there has been relatively little press coverage of medical malpractice insurance problems for hospitals. Facing increasing legislative oversight, restrictions and obligations, as well as physician withdrawal of service, the crisis for hospitals is also very real and very current.

At next month’s PLUS annual conference, a panel will explore the subject of medical malpractice insurance for hospitals. James Bream, shareholder, Querrey & Harrow, will chair the panel discussion reporting on the legal aspects of the hospital medical malpractice insurance situation. Panelists will include: Ross Bertossi, senior vice president, ACE Medical Risk; and Dana Switzer, vice president/unit manager, Lockton Companies.

“Current media coverage has resulted in a situation in which the medical malpractice crisis is almost ‘owned’ by the physicians,” says Bream. “When physicians walk off the job or refuse to provide certain medical services, they get attention. But too few people are discussing what these actions mean to hospitals.”

Federal and state governments require that hospitals provide a broad variety of services, according to Bream, such as treatment in emergency rooms and trauma centers. But in order to provide that treatment, Bream says, hospitals must have the necessary medical staff.

“Providing those services without the proper medical staff serves to increase the medical malpractice exposures of hospitals,” says Bream. “To my knowledge, the medical malpractice reform being considered by the federal government is geared to physicians and does not address the issues that hospitals are facing.”

Bream says that, so far, no hospitals have gone under because of the medical malpractice crisis; but that’s because, when a hospital doesn’t have the staff to perform certain procedures, they pass the patient on to another hospital that does. That, of course, results in delays in patient treatment, leading to yet another medical malpractice exposure for hospitals.

“We have to get the message out that hospitals are a part of the medical malpractice crisis too, and that they face exposures particularly because physicians are pulling back on services. That’s what this panel will be all about. We will examine all the potential risks that hospitals are experiencing and discuss the insurance implications as well.”

Bream says that, time permitting, there will be a question-and-answer period following the panel discussion.

Copyright Rough Notes Co., Inc. Oct 2003

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