As consumers, you are well aware that the cost of health care is high. Many of you have noticed or read about doctors leaving the state or the profession. You hear about large monetary awards through our court system for medical mistakes. It is important to look at the whole picture to understand the crisis we are facing in Illinois. And, it is vital for you to know what you can do.
Medical malpractice insurance has skyrocketed during the last few years and, each year, hospitals and physicians have to find ways to finance these increases. The high costs have jeopardized some hospitals and medical practices. In fact, some hospitals have closed, and some physicians have left Illinois or the profession because the escalating insurance costs have made it impossible to afford continuing to provide health-care services.
According to a 2003 Association of American Medical Colleges (AAMC) survey of academic group practices, "one of three respondents suggested that rising rates had caused community providers to close their practices." The survey indicated that "when independent physicians reduce services, the responsibility for treating high-risk patients often falls on academic medical centers and faculty practice groups."
Many public officials and the media blame insurance companies; however, data collected by the Chicago Hospital Risk Pooling Program (CHRPP) shows that malpractice insurance rates are not what will cripple the health-care system, rather it is the costs of malpractice jury awards that are responsible for the financial dilemma facing providers today. Most hospitals in the Chicago area are self-insured, so cutting insurance rates will not solve the problem.
In Cook County, average jury awards rose from $1.07 million to $4.45 million between 1998 and 2003, and 70 percent of that was for non-economic damages, such as pain and suffering. Jury verdicts in Cook County have escalated four to five times what they were a few years ago. Sixteen area hospitals that participate in a self-insurance, at-cost program saw annual malpractice expenses rise by an average of $4 million in the last five years.
Seventy percent of hospitals in Illinois are either self-insured or are insured by risk trusts that they own and control; however, even eliminating the middleman has not controlled insurance costs. Illinois is one of 20 states named by the American Medical Association as a "state in crisis."
Academic medical centers have a unique mission in providing health care, advancing research and educating future physicians. Academic medical centers incur higher costs because we treat the sickest patients, and healthier patients go to community hospitals. We also serve more Medicaid and uninsured populations than other health-care facilities. In fact, teaching hospitals represent only 6 percent of hospital beds nationwide and yet provide approximately 40 percent of all care to the uninsured. During fiscal year 2004, Loyola University Health System provided more than $14 million of charity care and an additional $33 million in unreimbursed care to Medicaid patients.
What should be done?
Illinois needs meaningful liability reform. Liability reform legislation would reduce the costs of liability insurance, keep doctors in Illinois and improve patient access to health care.
Meaningful liability reform includes:
- Caps on non-economic damages, such as pain and suffering
- Structured awards that would more efficiently provide for future medical care of injured plaintiffs and reduce medical liability costs of hospitals (e.g. periodic payments such as annuities rather than lump-sum payments)
- Apparent agency reform to protect hospitals from liability for harms they did not cause
- Instructions to juries that awards are not taxable and punitive damages may not be awarded
- Stringent expert witness standards
- Protection of physicians' personal assets
What can you do?
- Write to your state legislators and tell them you support meaningful;liability reform legislation.
- Tell your representatives that we want to ensure our hospitals and communities remain strong. Make your concerns and preferences known.
- Visit the Illinois Hospital Association Web site, www.ihatoday.org for more information or to find out how to contact your representative.
- Loyola University Health System wants to continue to invest in our people, programs, research and facilities to fulfill our mission. We strongly urge all citizens who are concerned with health care in the state of Illinois to support meaningful liability reform legislation.
Sincerely,
Anthony L. Barbato, MD
President and CEO
Loyola University Health System
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