Two weeks ago, Dr. Dennis English stopped delivering babies. After 25 years as an obstetrician, he said he hadn’t grown tired of handing newborns to anxious mothers. Rather, he feared one of his patients might allege malpractice and win a jackpot settlement in the millions of dollars. “My future can be destroyed by a lawsuit,” said English, 52, who has delivered 2,500 children at Magee-Womens Hospital in Oakland and now is limiting his practice to gynecology. “Why would you want to work with this bull’s-eye on your back• It just doesn’t make any sense.” Physicians across Pennsylvania are sounding warnings of a malpractice insurance crisis they say also is hitting hospitals and, ultimately, patients. The physicians’ chief nemesis in the debate — lawyers who represent patients in malpractice cases — won’t admit to a crisis, but they do say escalating malpractice premiums are a problem. Leaders in Harrisburg are taking notice. Doctors groups say premiums are so expensive — sometimes exceeding $100,000 a year — that some specialists, like English, are scaling back practices, moving to other states with more favorable rates or simply retiring early. Hospitals that pick up the premiums of some doctors say they might not be able to afford high-risk specialists such as obstetricians and neurosurgeons. In Pennsylvania, about half the doctors pay their own premiums and the rest have their premiums paid by the hospitals who employ them, according to the Pennsylvania Medical Society “The threat is real, and we need to act before the health care system crumbles,” said Dr. Gerald Pifer, an orthopedic surgeon at Allegheny General Hospital who is president of the Allegheny County Medical Society. A report from the National Practitioner Data Bank, which records doctors’ disciplinary actions and malpractice payments, showed that Pennsylvania had the nation’s second-largest amount of medical malpractice payouts, about $352 million, during 2000. Hospital officials say their malpractice premiums have more than doubled in recent years. UPMC Health System, for example, pays $27.3 million in annual premiums for the 2,700 doctors in its physician division. It paid $11.9 million five years ago. In addition, UPMC’s own annual premium increased, from about $22.4 million to $48 million, during that time. Even taking into account the system’s growth during that period, the increases are substantial. West Penn Allegheny Health System, which operates six major hospitals, pays $26 million in malpractice premiums — double the $13 million of three years ago. “It means that we have less money to invest in medical equipment and new treatment modalities,” said Jerry Fedele, West Penn Allegheny’s senior vice president and general counsel. “It also means that the students and residents that come through our hospitals aren’t staying here when they graduate.” Instead, these doctors head to states where they will get better rates on insurance. A survey released last month by the Hospital & Healthsystem Association of Pennsylvania showed that two-thirds of hospitals report some physicians retiring early, curtailing practices or moving as a result of increasing liability-insurance costs. More than half of the hospitals in the state report difficulty in filling physician vacancies. “It’s just getting worse, and no one will listen,” said Dr. William M. Crombleholme, president of the Pennsylvania College of Obstetrics and Gynecology. CAUSES DEBATED Doctors blame excessive malpractice judgments for increases in premiums ranging from 40 percent to 50 percent this year in Pennsylvania. Doctors in the hardest-hit specialties, such as obstetrics, neurosurgery and orthopedics, can expect to pay annual premiums of more than $100,000. Jury awards in medical malpractice claims jumped 43 percent in one year. The national median rose from $700,000 in 1999 to $1 million in 2000, according to Jury Verdict Research, a legal research firm. Five years ago, the median was $474,000. Trial lawyers say malpractice judgments are not to blame. Insurance companies undercut each other when selling policies in the 1990s and then got pounded by losses in the stock market. “The recent surge in premiums is due to the insurance companies’ bad investments and price slashing, and the chickens are coming home to roost,” said John Gismondi, a Downtown malpractice lawyer and chairman of the medical malpractice section of the Pennsylvania Trial Lawyers Association. Industry observers say a combination of these factors — malpractice judgments, declines in insurers’ investments and underpricing of their products in the mid-1990s — combined to create hefty increases in premiums. “There’s not just one reason for high premiums. Anyone who tells you differently is misleading you,” said Cheye Calvo, an insurance analyst with the National Conference of State Legislatures. “There are many underlying factors. It’s a very complex issue. “They should have been gradually increasing their premiums, but they weren’t,” Calvo said, referring to insurers. “When things went crazy in 2001, they tried to make all the adjustments at one time.” Practicing medicine without insurance is illegal in Pennsylvania. Doctors are required to carry two layers of insurance to give them $1.2 million in liability coverage. Private insurers, which provide up to $500,000 in coverage, determine their rates based on medical specialty, geography and a physician’s practice history. The state’s insurance fund for physicians, called MCARE, provides a second layer of coverage, to cover them if their own malpractice coverage is depleted. It determines its rates the same way. This fund pays the portion of a malpractice award exceeding $500,000. The funds, both private and state, also consider whether payment of jury awards will leave sufficient amounts for future awards. Gov.-elect Ed Rendell has appointed a task force to study medical malpractice insurance costs. Just last week, Gov. Mark Schweiker announced that he will allow health care providers to postpone paying into the MCARE fund. Private medical malpractice insurers will not collect the state-imposed assessments until April 30. State officials said the move would ease some cash-flow problems facing providers. THE BATTLE OVER SOLUTIONS The two high-profile players in the debate, doctors and the trial lawyers, disagree over how to bring soaring malpractice costs under control. Doctors say the best type of relief would be tort reform — capping pain-and-suffering awards. “Physicians are practicing defensive medicine,” said Dr. Loren Roth, the chief medical officer at UPMC, which operates 19 hospitals in southwestern Pennsylvania. “That’s not best for the patient. They get tests they don’t need. There is a genuine crisis out there.” Gismondi, the Downtown lawyer, said caps are unfair. He and other lawyers argue that doctors should be more focused on preventing medical errors. They point to studies that show that as many as 98,000 hospitalized Americans die every year as a result of preventable medical errors. “How can anybody arbitrarily say ahead of time what somebody’s injury is or is not worth?” Gismondi said. “You can’t take a cookie-cutter approach to the legal system.” Lawyers said doctors and health providers should be pleased with recent developments that should provide some financial relief. Last month, for example, the state’s insurance commissioner approved a 15 percent discount in malpractice coverage for state-insured doctors who have not had any claims filed against them. “There is no silver bullet. It’s a very complex issue,” said Mark Phenicie, a lobbyist for the Pennsylvania Trial Lawyers Association. The group opposes caps, which it believes would hurt wronged patients. In June, Schweiker signed legislation that requires a hospital or business to pay damages only to the degree of responsibility assigned by a judge or jury to that organization. Previously, a hospital or business ruled to be responsible for only 1 percent of the damages could be held responsible for 100 percent of the award, depending on the ability of other defendants to pay. Gismondi said he hopes the Rendell task force will allow the insurance problem to be discussed rationally. Crombleholme, who practices at Magee, said doctors are underrepresented on the 33-member task force, which includes five doctors and 12 lawyers. “It’s the same window dressing and double talk that we’ve been dealing with all along,” Crombleholme said. “I have no problem with the doctors they put on, but they have to put in as many doctors as they do lawyers. Even if they’re defense lawyers, just because you defend doctors doesn’t mean you know about medical care.” The Rendell task force met for the first time on Tuesday. A spokesman said the group includes neutral representatives who will be able to work together in crafting a long-term solution. Rendell “has brought all of the stakeholders to the table to find short-term and long-term solutions to the crisis,” said spokesman Tom Hickey. Gismondi said physicians’ claims of a “brain drain” to other states are exaggerated. A recent study by the Pennsylvania Medical Society did not show dramatic losses. More than a quarter of the state’s active obstetrician-gynecologists responded, with 60 of them — or 17 percent — saying that medical insurance costs forced them to change their practices in the past year. Seven doctors moved out of state, and 10 retired early. Doctors have been sounding their warnings in news conferences throughout the state and are encouraging colleagues to become more politically active. The trial lawyers group was a strong supporter of Rendell, a Democrat, against the Republican nominee for governor, Attorney General Mike Fisher, of Upper St. Clair. “The lawyers are very politically active, and we aren’t,” said Dr. Jitendra M. Desai, a local urologist, as she urged the 100 or so other doctors attending a recent staff meeting at UPMC Shadyside to speak out about malpractice costs. She is a vice president at the Pennsylvania Medical Society. “Maybe you’re too busy, but you need to call your legislator and talk about this problem. Why won’t you do it when your livelihood is at stake?”

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