West Virginia News
The Public Citizen consumer group examined government agency statistical sources
The Public Citizen consumer group examined government agency statistical sources to review the challenge of West Virginia medical malpractice cases. According to the Public Citizen study that was released in January, there were highlights of the West Virginia medical malpractice report that included (as found on http://www.citizen.org):
The cost of medical negligence to West Virginia's patients and consumers is considerable, especially when measured against the cost of malpractice insurance to West Virginia's doctors. Extrapolating from Institute of Medicine findings, we estimate that medical errors cause 283 to 630 preventable deaths in West Virginia each year. The cost resulting from preventable medical errors to West Virginia's residents, families, and communities is estimated at $109 million to $186 million each year. But the cost of medical malpractice insurance to West Virginia's doctors is less than $77 million a year.
Government data show that the median amount of medical malpractice awards in West Virginia has decreased, even as the cost of health insurance has increased. Statistics from the federal government's National Practitioner Data Bank (NPDB) show the median medical malpractice payment in West Virginia through the first nine months of 2002 was $145,000. This is the same amount that it was in 1997. During that same time period, the national average premium for single health insurance coverage increased 39 percent (9.5 percent a year). Payments for health care costs, which directly affect health insurance premiums, make up the lion's share of most medical malpractice awards. In spite of this, payments to malpractice claimants in West Virginia have remained steady.
Large malpractice verdicts in West Virginia are decreasing. The number of large jury verdicts in West Virginia medical malpractice cases is steadily decreasing. There were only two verdicts for more than $1 million in 2000 and 2001 - and none reported for 2002.
At the height of the purported malpractice "crisis," the number of licensed physicians in West Virginia actually increased slightly. The claim that skyrocketing malpractice insurance premiums are driving doctors from the state is contradicted by the facts. According to the West Virginia State Medical Board and the Board of Osteopathy, 4,069 physicians/osteopaths were practicing in West Virginia during 2001, and the number increased to 4,077 in 2002. Over the past five years, the number of doctors licensed and residing in West Virginia increased by 9.6 percent, a trend mirrored nationwide.
"Repeat offender" physicians are responsible for the bulk of malpractice costs. The NPDB shows that 9.3 percent of doctors who have paid multiple (two or more) malpractice claims are responsible for 62.2 percent of all payments. Even more surprising, only 3.5 percent of West Virginia's doctors - those who have made three or more payments - are responsible for 36.5 percent of all payments. West Virginia ranks third worst among all 50 states and the District of Columbia in terms of its percentage of repeat offender doctors - those with three or more malpractice payments.
Repeat offender doctors suffer few consequences in West Virginia. Public Citizen's analysis of NPDB data found that only 25.5 percent of those doctors who made five or more malpractice payments were disciplined by West Virginia's State Board of Medicine. And only 14.3 percent of doctors - one out of seven - who made 10 or more malpractice payments were disciplined.
Where's the doctor watchdog? West Virginia's State Board of Medicine is lenient with doctors, as are most state medical boards, regularly letting serious and sometimes repeat offenders off the hook. Nationally in 2001, there were 3.36 serious actions taken for every 1,000 physicians. West Virginia took 4.89 serious actions per 1,000 doctors - slightly greater than the national average, but still half as good as the best performing states and not nearly high enough to prevent bad doctors from practicing.
Insurance costs are increasing overall, not just for malpractice. The same cyclical economic forces that pushed up malpractice premiums in West Virginia also influenced the costs of other categories of insurance. In 2001-2002, increases for medical malpractice insurers ranged from 17.9 percent to 26.4 percent in West Virginia. Rate increases for health insurance in the state varied between 20.7 and 23 percent in 2002. And increases in homeowners insurance premiums ranged from 5.8 percent to 27.5 percent.
The spike in medical liability premiums was caused by the insurance cycle, not by "skyrocketing" malpractice awards. J. Robert Hunter, one of the country's most knowledgeable insurance actuaries and director of insurance for the Consumer Federation of America, recently analyzed the growth in medical liability premiums. He found that amounts charged for premiums do not track losses paid, but instead rise and fall in concert with the state of the economy. When the economy booms and investment returns are high, companies maintain premiums at modest levels; however, when the economy falters and interest rates fall, companies increase premiums.
Insurer mismanagement compounded the problems. Underpriced premiums, reckless cash-flow policies, and ill-fated involvement with Enron and asbestos subsidiaries forced one major carrier, the St. Paul Companies, to stop offering malpractice insurance. The company had covered nearly 29 percent of West Virginia's doctors. According to a Wall Street Journal analysis, St. Paul had generated large cash reserves by raising rates during the 1980s, and then released $1.1 billion from reserves between 1992 and 1997 - dramatically boosting its bottom line. This artificial profitability attracted numerous, smaller competitors into the malpractice insurance market and led to widespread price-cutting. By the end of the 1990s, revenue from premiums no longer could cover malpractice claims, causing some companies to collapse and others, like St. Paul, to drop coverage.
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