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Heather Perlberg/MEDILL

Fear of litigation and high insurance premiums hurt Illinois doctors

by Heather Perlberg
June 08, 2011

daley center

Heather Perlberg/MEDILL

Many Cook County medical malpractice suits are heard in courtrooms at the Richard J. Daley Center.

medmal chart

ISMIE physician rates;annual seventh year claims-made

Rates listed are for the $1 million/$3 million policy limit.

Nearly a year and a half after the Illinois Supreme Court overturned the state’s five-year-old medical malpractice law, physicians in Illinois are operating with a greater fear of litigation and rising liability insurance premiums.

Cook County‘s litigious malpractice environment, coupled with higher insurance premiums, results in doctors practicing more costly defensive medicine, physician groups say. In some case, physicians decide not to practice in Illinois, which can affect the level of care some areas.

"When it comes to pain and suffering, the sky is the limit," said Wayne Polek, president of Illinois State Medical Society. "Insurance companies have to charge more to eliminate that risk. I can move across any of the rivers to Iowa, Wisconsin, Indiana, and pay one-half to one-third the rates you pay in Illinois."

In February 2010 the Illinois Supreme Court lifted caps on judgments in malpractice cases for non-economic damages, intangible injuries including pain and suffering, emotional distress and loss of consortium.

“When there are no caps, from the physician side of the equation, there are concerns about the limits to which an individual can be sued,” said Dr. Russell Robertson, dean of Rosalind Franklin University of Medicine and Science.

Trial lawyers have argued that the caps are unlawful. “If someone is going to be suffering their whole life, we think the idea of a one-size-fits-all arbitrary cap is just plain wrong,” said attorney Todd Smith. “It’s not constitutional.”

Economic losses, including lost wages and ongoing care are fairly predictable, but an outlier case with a large jury verdict for non-economic damages could far exceed a doctor’s insurance coverage.

When the caps were initially passed in 2005, the leading state insurer’s rates went down an average of 7 to 10 percent, but have remained constant in the past five years, according to Robert Schuhriemen, senior vice president of Marsh Inc., an insurance brokerage company.

Since premiums remain high, and there are no caps on non-economic damages, insurance providers are faced with more uncertainty, a cost easily transferred to physicians.

“The thing the caps provided was more predictability,” Schuhriemen said, adding nearby states with caps on damages have a much more favorable malpractice environment for doctors.

The Indiana private insurance company limit is $250,000 per loss. After that a patient compensation fund steps in. In Wisconsin, $1 million is the most any one physician or health care provider can be responsible for, Schuhriemen said.

About 30 states have caps set on non-economic damages. Most caps range from $250,000 to $750,000.

High value verdicts in Illinois prompt higher settlements, both of which affect insurance premiums.

About 55 percent of Illinois doctors are insured by ISMIE Mutual. The most common insurance policy – covering up to $1 million per claim and $3 million annually – cost Cook County obstetrical surgeons about $140,00 each last year, according to ISMIE’s 2010 rates.

The price of protection is the same in Will, Jackson, Madison and St. Clair counties. Surgeons in those counties paid close to $100,000, and neurosurgeons paid the highest rate listed, nearly $230,000, which comes to about $4,500 a week.

Neurosurgeons who practiced in Kane, Lake or McHenry countries last year paid close to 16 percent less.

Chicago general practitioners and internists pay about $730 a week for insurance. So if they charge $75 per visit, it takes 9 or 10 visits patients a week just to cover malpractice insurance costs.

Larger verdicts come out of Cook County than other parts of the state, where juries are generally more conservative.

“Historically and nationally, Cook County has a reputation of being a challenging place to practice,” medical school dean Robertson said.

Plaintiffs might have a better chance of prevailing in Cook County, but it takes longer, according to attorney J. Kent Mathewson. The court system in Cook County is so clogged, it takes about four years for a case to go from filing to trial.

The Cook County malpractice environment trickles down to affect doctors practicing in other less populated parts of the state who pay less in insurance, but see far fewer patients than Chicago doctors.

“I suspect if you got outside of the Chicago and the collar counties and get into other parts of the state, you might be hard pressed to find a trauma surgeon,” Schuhriemen said. “If you are in Grundy County and a trauma surgeon, you might see a patient every week or 2 weeks, but are paying more than $100,000 or $200,000 [in insurance premiums]. It can become expensive to maintain that specialty.”

Liability issues have become so embedded in the practice of medicine, that even Illinois medical students consider Chicago’s litigious reputation when deciding where they will practice once they become doctors.

Illinois native Blake Jones will start his first year of medical school at Loyola University in August. He hopes to stay in Chicago to practice medicine, but is aware that liability plays a role in a local doctor’s decisions.

“I know two OBGYNs who have quit delivering [babies] because malpractice insurance has gotten so high,” Jones said. “For me it would be a balance. If malpractice costs made it infeasible to live here and make a living, than yeah, I would leave.”

Jones thinks doctors in Illinois and across the U.S. should be prepared to deal with liability issues. “That has to be part of your business,” he said. “A lot of people go into medical school without learning the business aspect of it: managing your own practice and dealing with insurance companies.”

Phillip Howard, founder of Common Good, a non-profit legal reform coalition, said the pervasive fear of liability is changing the culture of health care delivery and causing doctors to practice defense medicine, adding to overall health care costs by ordering additional tests to protect themselves.

“Doctors are now seeing patients as potential plaintiffs,” Howard said. “Trial lawyers are saying [malpractice litigation] is only 1 or 2 percent of health care costs. They are right, but the indirect cost could be seven times that.”

Results of a 2010 ISMS and ISMIE survey showed that 89 percent of 1,100 area physicians reported that liability concerns have caused them to order more tests than are medically needed. And 66 percent of the doctors admitted to reducing or eliminating high-risk services or procedures due to the medical liability threat.

Neither the fear of litigation nor the high malpractice insurance premiums seem to be a reflection of the legal results. Doctors win about 80 percent of the suits filed against them in Illinois, according to Chicago attorney Jason Kroot.

“We turn around 40 to 50 cases for every one we take,” Kroot said. “You have to spend a tremendous amount of money on medical expert [witnesses], it’s really difficult that you recover [any money]. So the damages have to support the cost.”