University Daily Kansan / Friday, December 8, 1989
7A
Insurance driving doctors from rural areas
Bv Melanie Matthes
Kansan staff writer
By moving his medical practice from western Kansas to IIwaco, Wash., R. E. Musser saved about $13,600 a year on his malpractice insurance premiums.
"Not retaining doctors in Kansas is almost epidemic because they don't have adequate state-supported coverage," he said.
Many rural physicians like Musser are leaving their rural practices or are abandoning the practice of obstetrics because of expensive malpractice insurance, said rural health care and state insurance officials.
Musser said he left Kansas a year ago to get away from the poor malpractice environment and to disassociate himself from obstetrics.
"By delivering babies, I was beating myself coming and going," he said.
Musser paid about $18,000 a year for malpractice insurance in Kansas, he said. The cost of this coverage is higher than some physicians because he practiced obstetrics. Had he not delivered babies, Musser said his insurance would have been about $12,000 a year. Musser's insurance now is about $4,400 in Washington without coverage for obstetrics.
The cost of professional liability insurance in Kansas is high as compared to a couple of years ago and
medical malpractice insurance is going up at an even much faster pace, said Bob Hays, supervisor of the professional liability section of the Insurance Commissioner's Office in Topeka.
The lowest possible insurance premiums through the state's insurance plan for a physician who does not practice obstetrics is about $6,000, said Ted Fay, attorney for the Insurance Commissioner's Office. But that amount doubles when a physician decides to deliver babies.
He said that the problems with maplattice insurance was that rural physicians didn't deliver enough babies to cover their insurance costs, whereas urban physicians can make a profit delivering babies.
A survey conducted two years ago by the Kansas Association of Osteopathic Medicine showed that out of 175 physicians, 25 had quit practicing or used a high malpractice insurance, and 64 were executive director of the Association
Physicians leave obstetrics and state
RURAL HEALTH CARE
"Statistics show that if you deliver babies, chances are that over four or five years you are going to have a lawsuit," Riehm said. "Even if you are found not guilty, it ends up costing you a tremendous amount of time and money."
Hays said that physicians who did not obtain insurance through a private insurer could receive insurance coverage through the Health Care Provider Insurance Availability Plan, which was passed by the Legislature in 1976. This plan is financed through health care providers and provides liability coverage of up to $200,000 per claim or $600,000 for all claims in one year, depending on the physician's policy.
"Most doctors don't want to give it up, though," he added. "They realize how critical it is in a small town for a doctor to do OB."
The Health Care Stabilization Fund, which also is financed through health care providers, provides liability coverage exceeding the amount covered by the Availability Plan. Hays said. Until June 30, the fund covered excesses of up to $3 million a claim or $6 million for all claims in one year.
But on July 1, a bill that was passed in the Legislature reduced the amount of excess coverage available
through the fund to $800,000 a claim or $2.4 million for all claims in one year, Hays said. However, the bill also allows physicians the option of lower, and therefore cheaper, levels of coverage and will establish an oversight committee to decide whether the Legislature should get rid of the fund altogether.
This is an attempt to get costs to the lowest levels possible. "Hays said"
Since its inception in 1976, the fund has paid $94.5 million in awards and settlements, he said, and most of payments occurred after 1982. As of June 30, the fund was $88.9 million and officials were trying to maintain this balance
Hays said that private insurers had paid about the same amount as the fund had paid for malpractice claims.
"That is why the doctors' premiums have risen." Haws said.
Payments from the fund increased from $13.4 million in 1988 to $18.3 million in 1989.
Fay said that another problem with malpractice insurance was that many rural malpractice cases were decided by juries from those cities.
"People in rural areas don't have much control over their own destiny, so they're argued in their courts," Pay said. "If there is a case in Hugoton, it's filed in
He said that 70 percent of the payments out of the fund in 1988 went to cases that were filed in Wichita.
Wichita."
Rates higher in Kansas
Musser said his malpractice insurance was more expensive in Kansas than in Washington because the Kansas Legislature had not put a cap on the amount that a physician could be charged. A medical malpractice review board analyzes each malpractice case before it reaches the courts.
Because the law places the $1
money on nails filed after July,
1986, the suit did not make it to court before the law was ruled unconstitutional.
"The policy (in Kansas) allows the most frivolous suit to be brought against anyone," he said. "When you get sued, your whole life is torn up."
In 1896 the Legislature passed a law that limited malpractice suits to $1 million, Hays said, but in 1888 the Kansas Supreme Court ruled that law unconstitutional.
Hays said that the only cap on the amount that a physician could be sued was on non-economic damages, or damages such as pain and suffering. These types of suits cannot exceed $250,000.
Therefore, it was like the law was never in effect, he said.
In January, 1988, Gov. Mike Hayden appointed the Governor's Task Force on the Future of Rural Communities to examine rural development issues and to make recommendations for improving the conditions of rural communities.
A resolution to amend the Constitution in regard to medical malpractice insurance is still alive in the Legislature and may be addressed on the first day of the upcoming session.
> No action was taken in the 1980 Legislature to begin a study of the potential of implementing a worker's compensation type of system in medical malpractice cases.
A report issued in July by the Kansas Department of Commerce outlined the status of the following recommendations;
> Some relief programs in the area of medical malpractice costs to Kansas physicians are expected. The Kansas Medical Society formed its own malpractice insurance company with the goal of providing cheaper malpractice insurance for Kansas physicians.
No action was taken in the 1989 Legislature to place limits on attorney's fees in malpractice cases, but an oversight committee was directed to consider recommendations that would provide such limits.
Inadequate Medicare repayments threatening small hospitals
By Melanie Matthes Kansan staff writer
Kansan staff writer
For the Wamego City Hospital, inadequate Medicare reimbursements could mean the loss of almost $300,000 in revenue for 1990, said B. Don Burman, administrator of the 26-bed hospital.
"For a hospital our size, those kinds of losses could mean closure of the hospital." Burman said.
gap between urban and rural hospitals.
And closure of the Wamego hospital would mean the loss of a health care facility that serves the medical needs of about 15,000 people.
Former Medicare reimbursement policies that didn't cover the cost of services were threatening some rural hospitals with closure or drastic cutbacks in staff and services, said rural health care officials.
But a recent change in Medicare policies may mean an increase in reimbursements to rural hospitals and a decrease in the reimbursement
A new policy effective February 1990 is intended to shrink the reimbursement differences by 3 percent, said Sherry Kaiman, government affairs consultant to the National Rural Health Association.
Burman said that the new policy was the first important step in the Congress to make a decision to keep medical services in the rural United States. He said he was pleased with the new policy and hopeful that it would help hospitals like Wamego to operate out of the red.
"It will help some," she said. "But we're still not sure that it will solve many of the problems."
Officials at the NRHA said that in 1986, 87 hospitals in the nation had closed and that by 1990, 600 more will have faced the same threat.
On Nov. 8, 1988, the NRHA, which has a central office located in Kansas City, Mo., filed suit in federal district
court against the Department of Health and Human Services. The suit, which was filed as a class action suit on behalf of seven rural hospitals across the nation, challenges the constitutionality of the Medicare reimbursement policies. One of the hospitals named in the suit is the Mount Carmel Medical Center in Pittsburg.
Kaiman said that the new Medicare policy would have no effect on the NRHA lawsuit.
There is an obvious disparity in reimbursement policies between rural and urban hospitals, said Tony Simons, senior accountant of Medicare reimbursements for Blue Cross and Blue Shield of Kansas.
Former reimbursement rates for rural hospitals in Kansas were about 35 percent lower that the rates for urban hospitals, said Steve McDowell, director of the Office of Rural Health in Topeka.
Although no rural hospitals in Kansas have closed in recent years, he said, many are threatened by that prospect.
The former reimbursement policies were established in 1983. The policies established predetermined amounts of reimbursement based on the type of case treated, not the actual cost of the service.
"From the standpoint of the state, they can determine when a patient no longer needs hospital care," he said. "But what do you do to these people? Send them home and let them get sicker or keep them in the hospital
This reimbursement system has resulted in subtle pressure on rural physicians to keep the cost of services down and the length of hospital stay. Stanley Handsy, general practice physician in rural southeast Kansas.
And the patients that are most effected by this pressure are the elderly because it usually takes them longer to get well, he said.
and run up a huge bill?"
The Mount Carmel Medical Center in Pittsburgh loses an average of $400 in reimbursements for each Medicare admission, said Melnin Goin, senior vice president. Each year the hospital about 2,000 Medicare patients. But the hospital has lost about five years the hospital has lost about $2 million in reimbursements.
"The government is saying, 'You're in the country so it's cheaper for you,'" Goin said. "But the cost is not cheaper, and inadequate reimbursements are impacting the quality of care that is delivered."
Fifty percent of the hospital's patients pay through Medicare, he said.
Goin said that because of limited funds there had been days when he has wondered whether the hospital would be able to cover the pavroll.
The NRHA's lawsuit against the federal government is at a standstill now because NRHA officials are
awaiting the judge's decision on a motion to dismiss the trial, said Robert Quick, communications director of the NRHA. The motion was filed by the Department of Health and Human Services and was argued before the judge in May.
Quick said the NRHA's attorneys contended that Medicare reimbursement policies were unconstitutional.
The original policies were introduced in the 1940 Hill-Burton Act, which established a system of uncompensated care to rural hospitals and was designed to encourage rural communities to either refurbish their health care facilities or to build new ones.
"The rural communities are really getting hit hard by being forced to continue uncompensated care," Quick said.
The Wamego hospital has had to tighten down on staffing because of unfair reimbursements, Burman said.
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