No Safety Net Squeezed by rising rates and soaring jury awards, many doctors are forgoing malpractice insurance. Sunday, February 3, 2002 BY JOHN DORSCHNER Need brain surgery in Broward? You can almost forget about getting it from a doctor covered by malpractice insurance. Fourteen of the 16 neurosurgeons in the county have gone ``bare`` -- are without insurance -- because the rates are so high and the coverage so small, says Arnold Lang, a Fort Lauderdale neurosurgeon who went bankrupt rather than pay a $1.5 million judgment against him. Experts say many neurosurgeons in Miami-Dade County have also gone bare, but no one has exact numbers. ``What they`re doing to doctors is an emotional and financial ruin,`` Lang says. It could also spell ruin for patients who believe they`ve been wronged by a doctor, because the lack of malpractice insurance coverage means patients may have no real chance to win a substantial judgment. The problem is that South Florida`s doctors already pay by far the highest rates for malpractice insurance in the country -- and many are howling that something be done as they look at 25 to 350 percent rate increases this year, if they can find any insurance at all. For the first time since the malpractice insurance crisis in the late 1980s, doctors in South Florida are seeing premiums soar because of juries giving huge awards, insurance companies` investment funds taking big hits in a declining market and some major insurers dropping out of the business entirely. Doctors are fighting back, led by the Florida Medical Association, which has proposed that the Legislature pass laws changing malpractice trials, including measures to make sure witnesses are truly experts and the establishment of an independent review panel that would examine a case and make an impartial ruling admissible at trial. Last week, about 40 doctors protested in front of Boca Raton Community Hospital, decrying their high premiums and demanding that the hospital allow them to go without insurance. To drive home the need for reforms, the Broward County Medical Association has chartered a Boeing 727 for Feb. 20 to fly 173 doctors, wearing white smocks and carrying stethoscopes, to Tallahassee to lobby legislators on the measures. Lobbyists say the doctors` proposals will have a hard time passing during a session that`s concentrating on reapportionment and financial issues, and even if the measures get through, ``these are just Band-Aids,`` says Carlos Buznego, president of the Dade County Medical Association. The only real way to lower malpractice rates, he says, is to get a cap on jury awards for pain and suffering. To do that, the FMA is considering once again trying for a constitutional amendment that would go before voters. The amendment process would cost about $15 million, and the FMA wouldn`t commit to backing the effort until it was certain the funds could be raised. Voters rejected a similar amendment by a solid margin in 1988. ``This is the same-ol`, same-ol`,`` sighs Bob Montgomery, a West Palm Beach attorney once named by Forbes magazine as one of the most successful personal-injury lawyers in America. ``There are horrors and tragedies out there. I`m a tragedy lawyer. Come see my cases. A nurse walks into a Fort Myers emergency room with a stomach ache. They don`t call a gastroenterologist. She has a bowel obstruction and dies. The only measure to give dignity to her death is through money. ``Our legal system works fine. I must prove my case to a jury beyond and to the exclusion of every reasonable doubt,`` says Montgomery, whose firm received about $200 million for its work in the state`s celebrated tobacco case. ``All this malarkey about rising premiums is because the stock market has gone down, and so insurance companies don`t have the funds they used to.`` Richard Rubinson, a Miami-Dade surgeon, acknowledges that doctors may have a hard time selling their case. ``We know there`s not a lot of sympathetic ears out there with the general public because we`re thought of as a bunch of rich guys. But that`s not true anymore. We`re facing a lot of downward economic pressures from managed healthcare groups,`` says Rubinson, meaning it`s hard to raise fees to compensate for the insurance costs. It`s true that during the bull market of the 1990s many insurance companies` reserves swelled with soaring stock prices. One reason they`re having to raise rates now is to compensate for their investments not doing well in a down market. But there are other reasons, such as those listed by the St. Paul Companies, the nation`s second-largest insurer of malpractice policies, which announced last month it was pulling out of the business across the country. In 2001, the firm lost close to a billion dollars in its healthcare business, says spokeswoman Andrea Wood. By November, the company was paying out more than $1.60 for every dollar in premiums taken in from doctors. A prime reason was generous juries. In 1994, according to data collected by St. Paul, the median verdict against doctors was $375,000. By 1999, that had grown to $800,000. What really hurt insurers were the increases in the biggest awards. In 1997, only two verdicts in the country topped $20 million. In 2001, at least 12 were over $20 million -- and three over $100 million, led by a $269 million judgment in Dallas. Meanwhile, between 1994 and 1999, doctors` premiums went up only 7 percent. ``There was more competition in the market,`` says Wood. ``Insurance companies didn`t raise premiums when they should have, but I don`t think that any of us predicted the losses we`re seeing now.`` St. Paul`s biggest fear is that the judgments are going to keep soaring. The firm`s research showed ``there`s a decline in the public perception of the quality of healthcare,`` Wood says. ``That means we see the trend of more lawsuits growing.`` ``Quite frankly, I think they`re right about the decline in quality,`` says Arthur E. Palamara, a Hollywood surgeon spearheading the tort-reform drive. Palamara believes doctors are being squeezed by HMOs and managed healthcare groups to keep costs down at the expense of quality. Palamara says malpractice rates here are high because ``it appears we have more litigious clients.`` While most specialties have seen premium increases of 25 to 50 percent this year, pulmonary specialists have had 74 percent raises. Vladimir Grnja, a Broward radiologist, has had his rates go from $32,000 a year to $112,000, primarily because of mushrooming lawsuits involving mammograms. Experts say that such soaring malpractice premiums tend to come in waves. Florida doctors experienced similar problems in the late 1970s and again in 1987. Each time, premiums eventually came back down. ``In 1988, we got legislation mandating mediation,`` says Palamara, ``and that helped level the playing field for 13 years.`` Many doctors also adjusted by forming self-insured trusts. However, Rubinson, the surgeon who helped form one of the trusts, says that recently some of these have been going out of business. The trusts have unlimited liability, so that if claims exceed the trusts` assets, the participating physicians must keep digging into their pockets to pay the difference. The fundamental complaint of many doctors is that they now have no way of passing along the costs of increased premiums because their prices are now heavily controlled by Medicare and managed-care organizations. In the future, many doctors may have no choice but to go bare. ``You`re going to see more companies raising their rates, higher deductibles -- or just leaving the market,`` says Jack Gohsler of Conning & Co., which studies the insurance industry. The AMA has made tort reform ``a top commitment,`` says Dr. Donald J. Palmisano, a Louisiana surgeon who`s secretary-treasurer of the AMA. The AMA has legislation before Congress that would follow the California model, with a $250,000 cap on noneconomic damages. ``It has passed the House on three occasions, but hasn`t gotten through the Senate,`` he said. In the meantime, as jury awards keep soaring, doctors are more concerned about another piece of Congressional legislation. It`s a bankruptcy bill that would make it more difficult for doctors to protect assets and would require them, even if bankrupt, to keep paying jury awards over several years. Says Amos Stoll, a neurosurgeon without insurance: ``That bankruptcy bill has scared the hell out of us.`` Singer Xenos does not provide any legal advice.    Please consult with your own attorney. Go to Singer Xenos Home Page Singer Xenos does not provide legal advice. Please consult with your own legal counsel.