Malpractice Payouts in Pennsylvania Rose in 2004

Insurance companies and other underwriters in Pennsylvania reported a steep jump last year in payments for malpractice claims against physicians, according to a federal agency.

In 2004, insurers reported paying out $448 million, a 13.5 percent jump from $394.5 million reported in 2003, according to the U.S. Health Resources & Services Administration. The 2004 figure broke the previous record, which had been set in 2001.

The increase in 2004 came after two years of decline. One researcher said he thinks payouts are climbing steadily, but that the steep increase in 2004 also was bumped up by delayed reporting of some payments made the previous year.

“We’ve had a pretty steady trend upward and for anyone to claim we were dropping off over the past couple years, the general trend is reasserting itself,” said Steve Foreman, who directs the Department of Allied Health at Robert Morris University.

Because of the way insurers report payouts to the Health Resources & Services Administration, some payments made in the last 30 days of 2003 were reported in 2004.

Higher payments will generally translate to higher insurance premiums, an issue that has been hotly debated in Harrisburg in recent years, as doctors and their allies have sought a constitutional cap on jury awards for pain-and-suffering damages.

Doctors say “jackpot juries” have helped fuel a precipitous rise in premiums, forcing them to leave the state, close their practices or curtail high-risk procedures, but neither they nor insurance companies have produced data showing a rise in pain-and-suffering awards.

Insurance payouts also include the cost of a victim’s health care and economic loss, such as wages.

Opponents of the caps, a group that included trial lawyers, victims’ advocates and most Democratic state legislators, blame the rising premiums on the increasing cost of health care, a sluggish securities market and poor insurance practices in the 1990s.

Lawmakers have opted for other avenues to try to lower premiums, including restrictions on the filing of lawsuits and spending more than $220 million annually to help doctors afford insurance.

Although it is not clear yet whether restrictions against filing lawsuits will affect insurance premiums, debate on the issue cooled last year amid a drop in the number of suits filed, a slower rate of premium hikes and questions over the accuracy of claims that doctors were fleeing Pennsylvania.

Lawmakers who support a constitutional cap have introduced legislation in the new two-year General Assembly session and say the issue has not gone away. For now, they say they are taking stock of how other malpractice reforms play out before the next deadline, in mid-2006, to pass the legislation necessary to take the first step in the multiyear process required by a constitutional amendment.

“I just think people are waiting to see where we are,” said Sen. Jake Corman, R-Centre. “Reports like this will certainly give more momentum to move forward on it.”

While President Bush continues to push the issue of a federal cap in Congress, Mark Phenicie, a Pennsylvania Trial Lawyers Association lobbyist, said state lawmakers seem to have lost some enthusiasm for a cap, especially in light of other efforts to curtail lawsuits.

“We know the issue is still out there,” Phenicie said. “I could be wrong, but I think the steam is going out of it.”

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