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Naked exposure: a new play has the medical community abuzz about what it means to face a world without medical malpractice coverage. Nationwide, very few doctors practice without it. But you can bet that "going naked" has crossed the minds of just about every doctor in the country.

In Going Bare--a play written by Mary Jane Taegel that has been produced in playhouses across the country--Dr. Jack Ramsay, has dropped his insurance coverage to avoid paying what he considers to be outrageous malpractice premiums. But, when he's hit with a frivolous, multimillion-dollar lawsuit, the doctor and his wife conspire to get a divorce that is faked in all but the legal sense and that puts all their assets into her name to protect them from a large settlement.

In the story, which has recently been optioned to a Hollywood producer, all beck breaks loose when a calculating "other woman" believes Jack to be available and the lawyers get wind of his scheme.

While not all doctors may be willing to risk the mayhem that Ramsay does, most are feeling the pressure of insurance costs, and more than a few are saying, "No more."

Estimates are that in a growing number of states, particularly those with high malpractice insurance rates such as Florida, thousands of physicians are "going bare"---dropping their liability insurance and taking their chances without it.

Nobody knows for sure how many doctors are going bare nationwide, but a Wall Street Journal report this year indicated that nearly 20 percent are in this status in such areas as Miami-Dade County, Fla.

"GOING NAKED" STILL A RARITY

"Nationwide, we are probably not talking about more than 1 or 2 percent of physicians," says consultant Dow Walker, chairman of the Health care practice at the insurance brokerage Willis Group. "But doctors are looking hard at the percentage of their practice income that goes to insurance fees. Usually, they can't just increase fees to compensate, because they are tied into payment contracts with third-party payers."

Generally in the United States, doctors need to have insurance. Hospitals usually require that physicians hold a minimum level of coverage in order to have admitting and staff privileges. Doctors need such privileges in order to care for their patients admitted to hospitals.

Hospitals--which also carry their own coverage--know that without this requirement on each doctor practicing in their hallways, their institution itself would be an even bigger target than it already is for malpractice suits. (Some hospitals have begun to release this requirement for some specialists so that they can continue to staff critical services.) In addition, many managed care organizations and states require practitioners to maintain certain levels of malpractice insurance.

When these requirements, or the malpractice judgments against fellow physicians in their specialties, dictate a level of coverage for doctors that they either don't want to pay or feel they can't afford, more of them have chosen to go bare--a term also used in the workers' comp, nursing-home, and other insurance arenas.

The strategy is sometimes referred to as "self-insuring," a misnomer simply meaning that doctors are personally responsible for legal fees and any judgments or settlements if sued.

Several thousand physicians have gone bare in Florida, a state known for some of the highest malpractice insurance rates in the nation and for its activist doctors. Physicians taking this step in Florida must prove to the state that they have $250,000 in assets that could be accessed for any claim against them. They must also alert their patients to their lack of coverage. Florida does, however, permit these doctors to protect their homes, retirement plans, annuities, life insurance, and salaries from legal judgment.

"In other cases, doctors are also turning to risk retention groups, where they get together with other physicians to pool their risk," notes Chuck Moran, a spokesperson for the Pennsylvania Medical Society, whose members experience a combination of high insurance rates and a state insurance requirement that has caused them to cry for relief.

In Florida, Pennsylvania, Texas and other states where the insurance crunch is greatest, doctors have also limited what hospital services they are willing to work on or what procedures they are willing to perform. They also have chosen not to increase the limits of their policies to needed levels. Nor have they switched out of needed specialties, moved to another state, retired early, or simply left the practice of medicine.

DOCTORS OVERREACTING

But are doctors making too much of the issue? Certainly medical liability is a major factor affecting the entire health care industry. And in fact, the American Medical Association has recently dropped any standing recommendations against physicians going bare.

"As a doctor, sooner or later you say, 'I'm not making enough money doing this.' And the question is what does it do to the attractiveness of the medical profession in general. Will it take the best and brightest out of that field?" asks Walker.

Luzette Mariner, a spokeswoman for the Florida Medical Association, which represents MDs and DOs, says, "Going bare is not a decision that physicians do out of desire but because they have to."

In the AP story that ran nationally in June of this year, Dr. Alan Routman, an orthopedic surgeon in Broward County, Fla., said of his decision to drop his coverage, "If I really injure somebody and do something wrong, I want them to be compensated for it. But I don't want some crackpot jury to decide that I should lose everything I've worked for my whole life because of it."

Pennsylvania currently requires physicians--under penalty of license suspension or revocation--to have $1,000,000 in professional liability insurance, $500,000 through private insurance and $500,000 through the state-run Mcare Fund. "This is without regard to what we actually need and can afford," claims Dr. Louis A. Meiers, president of the Cincinnatus Society. The physicians' group advocates against this legal requirement on the basis that many medical and osteopathic doctors, as well as podiatrists, can't afford it--and because chiropractors are exempted if the insurance is not available or is too costly.

Reflecting the AMA's position, such physicians groups believe that the decision to insure, and to what extent to insure, should be the doctor's. "It unconstitutional," says Meiers. "We just want the same protection under the law as other kinds of practitioners."

Such groups stop short of actually advocating that their colleagues go bare, in an environment where trial lawyers and patient advocates call going bare irresponsible and maintain that the real problem is careless and inept medical care. Consultant Dr. Alan Spiro, principal of the Care Management practice at Towers Perrin, offers a similar but more moderated perspective: "Malpractice is underlitigated, but it's because we haven't set up systems to prevent human error. This is the tip of the iceberg for the whole issue of medical errors."

Experts such as Spiro cite a need to keep the broad picture in mind. They note that the specialties subjected to the highest insurance rates--such as ob-gyn, neurosurgery, orthopedics and radiology--also remain among the most lucrative specialties.

They pose scenarios such as this: If a typical neurosurgeon is making, say, $600,000 in gross revenue, and his insurance costs him $200,000, with other business expenses (mostly for medical office support staff and administration) at about $100,000, how much sympathy will any group of professionals in this country get that is still making an average of several hundred thousand a year in net personal income?

"People are accepting this problem almost uncritically rather than looking at it more closely," says Spiro. "The honest angst that doctors are feeling may be as much about a sense of abuse as it is about actual dollars."

The lawsuit, for example, in the play Going Bare is based on an actual Texas ease in which a woman had undergone a tubal ligation but gotten pregnant only a few months later. She sued her gynecologist for medical malpractice and child support for the baby. (The case went all the way to the Texas Supreme Court, where the judges ruled that a plaintiff cannot sue for "wrongful life" the way she might sue for "wrongful death." The actual malpractice ease was tossed out because a failed tubal ligation is a recognized complication of the procedure.)

WILL THE GAMBIT PAY OFF?

The phenomenon of doctors going bare is yet another sign and symptom of the turmoil and extraordinary pinches within the health care industry today, where different players are trying to push cost pressures back and forth on each other. An analogous trend is taking place among consumers as well, where even among the working middle class, more are deciding to take their chances and go without health care coverage because of the high cost of such insurance.

The furor over insurance pressures on doctors is tightly wound up into complex, state-by-state politics.

Will the gambit by thousands of Florida doctors pay off or will it fail under relentless maneuvering by plaintiff's attorneys?

Some commentators have noted that even if a doctor is bankrupt on paper, a verdict could be renewed against him at a future date when he might have assets.

And will individual doctors become more of a target now that the Supreme Court has removed HMOs as subjects of class action suits at the state level?

Tort reform has taken place in about half of states in the country, with caps on pain and suffering damages, but as these changes go into affect, they may require physicians to have insurance in order to receive cap protection.

"The more fundamental problem is that the legal system takes a black and white adversarial stance, and sets it against the gray area that is medicine," explains Spiro. "All clinical care is a calculated risk. Judgments in medicine can always be questioned."

Near the end of the play Going Bare, Dr. Ramsay's lawyer finally meets the plaintiffs lawyer over lunch, and the two hammer out a meager settlement to the tune of $200,000. When Ramsay learns of it, he is incredulous. "We lost!" he cries.

His lawyer replies, "Are you kidding? We won! I thought you'd be thrilled. This is only a tiny fraction of what they were asking." Then he advises the doctor, "Get some malpractice insurance. We'll win the next one in court."

Jack hollers, "The next one'?!" and is left to re-think his dedication to medicine, if he must practice daily under the threat of lawsuits.

Risks of a Gambit With No Precedent

What are other implications of physicians going bare? One consideration has to do with patient ethics and protections: Should we choose physicians based on whether they have insurance or not?

Another is the suggestion that bare physicians, practicing outside of HMOs or other networks, will be administratively more efficient, helping them to have more time and resources for their patients, and aiding them in keeping their fees low to make healthcare affordable. Still another is the concern that patients with managed care insurance will lose access to these physicians. "Not enough physicians important enough to networks have gone bare yet for us to see this play out," says Dr. Alan Spiro, principal of the care management practice at Towers Perrin. "But it will for certain specialties, such as obgyns, which are hard enough for networks to have enough of already."

Finally, there may be exposure for both insurers and hospitals if physicians are not forthcoming about their insurance status. If a physician should drop coverage but doesn't bother to tell these intermediaries, who bears the risk in a claim? "There aren't any precedents for this yet," says Spiro.

Russ Allen
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Title Annotation:Liability
Author:Allen, Russ
Publication:Risk & Insurance
Date:Sep 15, 2004
Words:1893
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