PLUS Medical Professional Liability Symposium

1. PLUS Medical Professional Liability Symposium D, Brent Mulgrew Executive Director OSMA March 11, 2003

2. OSMA Value Image • Advocating for physicians • Promoting a positive image • Practice services that save time and money Value & Loyalty Practice Services Advocacy Zero Cost of Membership

3. Professional Liability Crisis’Critical Condition’

4. Source: www.ama-assn.org

9. “Soaring malpractice premiums stun many doctors”…USA Today What we’re seeing in Ohio “Family physician to give up obstetrics” …Health Headlines “Professional liability rates go up; doctors go away”…AMNews

10. What we’re seeing in Ohio “Malpractice-insurance rates in Cleveland among highest in nation”…Cleveland Plain Dealer “Malpractice coverage hikes slam doctors” …Columbus Business First “No cure for rising costs...malpractice insurance skyrockets”…Akron Beacon Journal

11. What we’re hearing in Ohio “My premium with Medical Assurance, even with my 15½% loss free discount, is going from $33,000 to $45,000 (+40%).”…Ob/Gyn, Cincinnati “Our practices have been billed 50-70% higher premiums this year for malpractice insurance.”…Multi-specialty IPA, southeast Ohio “Premiums are rising so fast that a change in careers or retirement become the only options.” …General Surgeon, Mt. Vernon

12. What we’re hearing in Ohio “The rates for our group just doubled for no good reason. Our claims rate has not changed.” …Radiologist, Dayton “One of my partners was forced to retire due to the rise in malpractice rates!”…Urologist, Akron “My malpractice rates just doubled! I’d call that a crisis!”…Ob/Gyn, Maumee

13. The Ohio physician’s experience 10-Year Soft PLI Market St. Paul’s Exit MIIX Downgrade Tighter Underwriting Decreasing Medicare Reimbursement Seeing More Patients Increasing Jury Awards IOM Patient Safety Report Prompt Pay Managed Care HIPAA Down Coding

14. The impact… • Increased expenses • Time poverty • Revenue remains flat to declining • Reduced income • Decreased access to patient care • discontinuing some procedures (96%) • leaving for less litigious areas (15%) • quitting the practice all together (51%)

15. Ohio’s PLI History • 1974-75 PLI availability disappears • OSMA’s response: Omnibus HB 682-Medical • Multiple tort reform provisions-4yr S/L, Pretrial Arb, limitations on experts, voluntary arb. 250K cap • most sections declared unconstitutional 1980 • OSMA establishes physician owned PLI company • Multiple entrants in marketplace by1980-Availability increasing, price increases slow to inflation • 1982-86 Market tightens, prices spike • OSMA’s response: Broad based Tort Reform • include business coalitions

16. History • 1990--Held unconstitutional, but prices stable • OSMA’s response: 1995 HB 350 Broad based Tort Reform--Unconstitutional 1999 • Do you detect a pattern?? • Without changing the Supreme Court--legislation is useless • 2001-02 Market deteriorates as prices spike and availability disappears

17. Action taken…

18. The OSMA’s response… • Governor’s Task Force • Passed SB 281 • Communication with ODI • PLI Carriers’ Roundtable • Providing PLI Carriers’ Ratings • Providing Access to independent PLI agent

19. Senate Bill 281 • Limits noneconomic damage awards in the vast majority of cases to $350,000

20. Senate Bill 281 • Requires attorney contingency fees to be reviewed by a probate court if the fees exceed the noneconomic damage awards

21. Senate Bill 281 • Establishes a statute of repose

22. Senate Bill 281 • Protects physicians from the notice of a claim being used against him/her

23. Senate Bill 281 • Allows evidence of collateral source payments

24. Senate Bill 281 • Provides for periodic payment of future damages

25. Senate Bill 281 • Strengthens Ohio’s current arbitration law

26. Related Tort Reform Legislation • Senate Bill 120 • Removes joint and several liability • In other words, in most cases, a physician who is named in a suit will only be held liable for the portion of the claim for which he or she may be responsible • Senate Bill 179 • Provides a broader base of peer review protections • Allows health-care entities outside the traditional hospital setting to establish peer review committees • The activities are protected from discovery during litigation

27. IMPACT • No reduction in rates or trend • Increased numbers of failure to renew • Selective underwriting of risks/specialties • Increased demand for hospital provided ins. • Credit history/psychological prescreens • Creation of new nonstandard market options • Risk retention groups, off shore or friendly state captives and OWAs. • Ohio Hospital Assn. Creates new options for physicians through their institutions