The Crisis of Malpractice Insurance

FINALLY THEY'RE fighting back. The doctors are going on strike.

Exorbitant malpractice insurance premiums--long on the rise throughout the nation--have recently driven more than 250 doctors in eastern Massachusetts community hospitals to the point of refusing to accept new patients or to perform surgery.

Fighting back, of course, has its consequences. Primarily obstetricians and orthopedic surgeons, these physicians' convenient circumvention of medical principle has resulted in the inconvenient and dangerous transfer of accident victims and women in labor to Boston hospitals. Whether this kind of "dumping" of patients onto other hospitals constitutes illegal collusion or strike activity is debatable.

Regardless, the physicians do have something pertinent to say: namely, that malpractice suits have gotten out of hand, and that the medical insurance system needs to be fundamentally altered in order to preserve both the prerogatives and the services of the profession.

Reworking this system unavoidably involves controversial value judgements and policy assessments. The stakes are high: American doctors spent about $3.6 billion on insurance in 1984, and the American Medical Association (AMA) predicts the figure will reach $7 billion within three years. Medical, legal and insurance industries, each rapacious in its own inimitable way, have evolved into three fiercely competitive and increasingly unscrupulous rivals. One disgruntled, and perhaps uninformed, Boston Globe columnist recently quipped that any attempt to take sides on the malpractice issue "is like trying to decide whom to cheer for if war erupted between Libya, Iran, and Iraq."

SARCASM ASIDE, it's time we sided with the doctors. Despite the fact that any alteration in the status quo will alienate the legal and insurance factions, and the fact that the Massachusetts doctors have been utterly callous in their reaction, the argument of the medical faction on the malpractice insurance issue is still the most convincing one. Though its rhetoric may appear territorial, the medical plea for moderating the run-away malpractice problem is a reasonable one with comparatively egalitarian consequences.

In the end, the American consumer foots the bill for the medical, legal, and insurance industries; if this burden can be lessened as an inadvertent consequence of the medical industry's self-aggrandizement, so be it. Some reasonable limitation of court settlements against doctors (the nationwide average rose from $5,000 to $330,000 between 1970 and 1985) is and absolute prerequisite if the public is to defend itself from the vicious malpractice cycle--a cycle that ends up benefiting middle-man lawyers and insurance companies if anyone.

Case in point: Last Thursday, the Massachusetts Insurance Commission approved rate hikes for obstetricians. The Massachusetts Blue Cross has proposed paying physicians $25 million more this year to help them meet high insurance payments, such as these. Despite such concessions, however, the Massachusetts Medical Society has demanded that state medical insurers be taxed $100 million in order to subsidized the newly-upped premiums and to insulate the doctors against future increases. If anything, it is a cycle that gives the bad end of the stick back to the public anyway, as physicians pass the higher costs of medical insurance to their patients via higher fees.

BUT THE MAGNITUDE of the monetary resources wasted on insurance and legal protection pales in comparison with the national figures for so-called "defensive medicine." In anticipation of the malpractice subpeona, doctors order extraneous testing procedures to illustrate their competence by covering all possible contingencies. AMA estimates place the 1984 national expenditure on such testing between $17 and 40 billion.

Lawyers--who are the doctors' competitors, mind you, in this insurance scenario--argue that litigation pressure keeps doctors "on their toes." If one were anachronistically fascinated by the myth of laissez-faire capitalism, one might discern some sense in the lawyers' "fairness" argument. But this forgets that the AMA has openly advocated investigations into the capabilities of its members; it has never argued that medical malpractice suits per se are unjustified. The AMA points out that the constant threat of inquisition restricts the accessibility of quality medical care, as doctors flock to states with more relaxed laws, and promotes an unhealthy anxiety in the doctor-patient relationship.

Until we see doctors committing blatant mistakes, mistakes which cannot be explained by the fact that even the best-trained people screw up, it is better to focus on keeping the net loss of societal resources to a reasonable minimum.