Doctors Offer Reasons for Arbitration

Doctors Offer Reasons for Arbitration


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Kimberly Houk ReportingIt's a new mediation process that's growing in the medical community. But will forcing patients to arbitrate really bring down the cost of doctor's insurance premiums?

This is a complicated issue that's drawing a lot of attention. Doctor's are on one side of the issue, looking for relief from soaring insurance premiums, while trial lawyers are on the other side telling patients to not sign away their rights to a jury.

Charles Thronsen, Attorney: “If you look at the national data from the National Science Institute, the number of people who died as a result of medical malpractice in this country exceeds the entire loss in the Vietnam War.”

In recent years, medical malpractice insurance premiums have risen dramatically, causing a health care crisis in this country. Doctors in Utah who perform risky operations pay the most, like obstetricians and neurologists. In 1998 OBs paid a little over $35,000 for liability insurance. Next year they'll pay more than $80,000.

It’s an increase so severe it's affecting medical student's career paths.

Mark Fotheringham, Utah Medical Association: “Up at the U of U two years ago not one single medical student went into the OB program, not one. They didn't fill any of their residency spots for obstetrics and gynecology."

Fotheringham says this is creating another crisis in Utah's hospitals. He says many OBs are avoiding the high insurance premiums by moving away from delivering babies, and instead focusing only on gynecology, or retiring early.

IHC says insurance premiums and high jury awards are at the root of forcing patients to arbitrate claims.

Fotheringham: “We have confidence that medical liability premiums will be affected positively with arbitration. Now will they go down? Nobody knows because it's based on risk and claims data from previous years."

In the past five years malpractice claims shot up by nearly 70 percent 176 claims were filed in 1998. At the end of 2003, 299 claims were filed with the courts.

And IHC says the average cost per claim has doubled in the last seven years. The average payment for claims in 1995 was $76,000. Last year, the average payout was $155,000.

And it's the rise in payouts and claims that the Utah Medical Association says is driving up the cost of insurance premiums.

Fotheringham: “The major cost that goes into deciding what is a malpractice premium is the losses you would have incurred in previous years.”

But trial lawyers say "the losses" that are driving up insurance costs are stock market losses. Charles Thronsen, a prominent litigator in Salt Lake City, says in the past 30 years he's seen three separate occasions where medical malpractice insurance premiums shot way up following bad stock market years.

Charles Thronsen: “They all seem to coincide with a dramatic downturn in the stock market. What insurance companies do with premiums is they invest them in the stock market.”

And he says insurance companies are now raising doctors’ premiums to make up for their failing investments when the stock market tanked three years ago.

Thronsen: “It's just non-sensical to assume all of a sudden in the year 2000 there is now a malpractice crisis that justifies 40 to 60% rate increases."

A local economist says the rise in premiums is probably the result of both the economy and a litigious society. And both IHC and lawyers agree that if arbitration ends up costing IHC more than taking cases to court, they'll do away the signed arbitration agreements and go back to the American court system.

Lawmakers are trying to find the middle ground on this issue. They say IHC is thinking about maybe starting the process with mediation. It would be less costly; and then if they still can't resolve the dispute, they would arbitrate from there.

Have any doctors left Utah, because they can't afford the insurance? The Utah Medical Association says no. However, they say instead of leaving, many doctors are instead are no longer performing high risk procedures and Utah is losing some real expertise.

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