Malpractice deal may clear the air

Not much was made of it, but the best thing about the medical malpractice agreement reached Monday was the light it will shed on what has been almost as mysterious as the point system used to judge figure-skating: How does the malpractice insurance market work, anyway?

The easy answer is not very well. Annual premiums rising into the six figures have driven some doctors into retirement, or out of state, or to difficult decisions like no longer delivering babies. Patients lose options for medical care.

Yet much of the underwriting that goes into the formulation of malpractice rates has been an unknown. The few insurers offering coverage file rates with the Washington Insurance Commissioner’s Office after they have already been implemented. Frequently, months pass before insurers submit all the information needed to substantiate changes. The increases remain in effect all the while.

Also, the commissioner’s office has only an incomplete picture of the market. Insurers covering high-risk practices like obstetrics/gynecology or neurology, where premiums are highest, do not report charges, or their loss experience. Nor do self-insured groups like Group Health Cooperative and Providence Health.”We’re going to get lots of information from people we don’t hear from now,” says Deputy Insurance Commissioner Beth Berendt. There have been lots of complaints over the years about “jackpot” verdicts against doctors and hospitals, she adds, but the commissioner’s office could find none.

The agreement, if approved by the Legislature, will lift the veil.

The deal requires reporting of malpractice claims outcomes by all insurance companies as well as those companies that self-insure. The reports must include information about the patient, the care providers, the cost of the settlement, and litigation expenses. The commissioner will be able to impose penalties for failure to file a report.

Commissioner Mike Kreidler has asked the Legislature repeatedly for this kind of disclosure, which will allow him to compile statistical summaries that will, for the first time, open up what has been, if not a black box, at least a very gray one.

Lawyers and doctors, who faced off in a disastrously expensive initiative fight last fall, say they welcome more disclosure.

“The next time we have this debate, we’re going to have some numbers,” says S. Brooke Taylor, president of the Washington State Bar Association. The result should be improved patient safety, he says.

Thomas “Nick” Fairchild, president of the Spokane County Medical Society, says new protections for whistleblowers, and the opportunity for doctors to offer apologies to patients and families when errors are made, will improve the exchange of information among medical professionals. Now, at the first whiff of a malpractice claim, lawyers advise their doctor clients to clam up.

“We would like to get to a safer, healthier environment for patients,” he says. “We want less medical error.”

Fairchild adds that the reforms may make it easier to recruit some specialists who have shunned Washington because of malpractice premiums that have reached $125,000 a year. Some Spokane doctors are sending especially difficult cases to Seattle because they cannot afford the appropriate insurance, he says.

Taylor says the agreement incorporates some stunning compromises. Doctors, for example, set aside their demand for a cap on non-economic damages. Lawyers agreed to let juries know how much money a client may have already received from other parties involved in a malpractice action, a step that could drastically reduce damage awards.

If, as all parties seem to agree, the compromises made are just a good first step, it was a big one. A more open insurance market, and more open dialog, should set the stage for more progress.

For business, the payoff could be lower costs to insure employees. For the state, the benefits may not only be the revitalization of medical practices, but also a signal to the makers of medical devices, pharmaceuticals and other health-related goods and services that Washington is a better place to do business. We’ll see.

In the meantime, could someone please clarify skating rules before the State Farm U.S. Figure Skating Championships arrive next winter?