March 11, 2003

PLUS Medical Professional Liability Symposium

PLUS Medical Professional Liability Symposium

D, Brent MulgrewExecutive DirectorOSMA

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OSMA Value

1. Advocating for physicians2. Promoting a positive image3. Practice services that save time

and money

Value& Loyalty

Advocacy Practice Services

Image

Zero Cost of Membership

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Professional Liability Crisis

’Critical Condition’’Critical Condition’

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Source: www.ama-assn.org

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What we’re seeing in Ohio

“Soaring malpractice premiums stun many doctors”…USA Today

“Family physician to give up obstetrics” …Health Headlines“Professional liability rates go up; doctors go away”…AMNews

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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

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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

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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

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The Ohio physician’s experience

Tighter Underwriting

Increasing JuryAwards

Decreasing MedicareReimbursement

IOM Patient Safety Report

Seeing More Patients

HIPAA

St. Paul’sExit

PromptPay

DownCoding

10-Year Soft PLI Market

ManagedCare

MIIX Downgrade

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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%)

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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

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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

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Action taken…

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The OSMA’s response…

Communication with ODI

PLI Carriers’ Roundtable

Passed SB 281

Governor’s Task Force

Providing PLI Carriers’ Ratings

Providing Access to independent PLI agent

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Senate Bill 281

Limits noneconomic damage awards in the vast majority of cases to $350,000

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Senate Bill 281

Requires attorney contingency fees to be reviewed by a probate court if the fees exceed the noneconomic damage awards

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Senate Bill 281

Establishes a statute of repose

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Senate Bill 281

Protects physicians from the notice of a claim being used against him/her

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Senate Bill 281

Allows evidence of collateral source payments

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Senate Bill 281

Provides for periodic payment of future damages

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Senate Bill 281

Strengthens Ohio’s current arbitration law

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Related Tort Reform Legislation

Senate Bill 120Removes joint and several liabilityIn 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 179Provides a broader base of peer review

protectionsAllows health-care entities outside the traditional

hospital setting to establish peer review committees

The activities are protected from discovery during litigation

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IMPACT

No reduction in rates or trend Increased numbers of failure to renewSelective underwriting of risks/specialtiesIncreased demand for hospital provided ins.Credit history/psychological prescreensCreation of new nonstandard market optionsRisk retention groups, off shore or friendly

state captives and OWAs.Ohio Hospital Assn. Creates new options for

physicians through their institutions