Medical Malpractice Insurance, Tort Reform and the Ohio Supreme Court
Physicians are experiencing large increases in their renewal of malpractice premiums. Higher jury awards, losses by insurance reinsures, the downturn in the stock market in which insurance companies have invested their reserves, and unusually low rates for the past ten years are factors which have contributed to driving up the cost of professional liability insurance. Premium increases appear to be highest in the northeastern part of Ohio.
Ohio law does require insurers to file rate increase requests with the Ohio Department of Insurance. The Department reviews the requests to make sure they are actuarially sound and meet the insurance standards established by law. According to the Director of the Ohio Department of Insurance, Lee Covington, " the rate increases filed by the professional liability insurance carriers in Ohio have been found to be actuarially sound and with the regulations under Ohio law."
At the request of Governor Bob Taft, the Ohio Department of Insurance took a look at the professional liability insurance situation and found that the market in Ohio to be adequate and competitive and believes premium rates will continue to increase over the next year. Governor Taft has requested the Department to continue to gather information on the market, factors influencing the market and the consequences of various types of governmental intervention. Currently, no legislation has been introduce to address the liability insurance problem, however, some tort reform bills are pending before the Ohio General Assembly.
The Academy of Medicine of Cleveland/Northern Ohio Medical Association recently mailed a survey to 2000 physicians in the greater Cleveland area asking about liability insurance costs and how these costs have affected their practice. Based on a nearly six percent rate of return, physicians are reporting rate increases as high as 233% for one group and increases of 100% or more were not uncommon. While approximately 18% physicians reported no increase, the majority of respondents fell within the range of a 25% -40% increase in their malpractice rates for 2001 with some respondents expecting a greater increase in 2002.
Many believe that tort reform will assist in keeping professional liability premiums lower, however this cannot take place unless there is a change in the present composition of the Ohio Supreme Court.. The current justices have handed down a number of decisions that have had a negative impact on the practice of medicine in Ohio. The Ohio Supreme Court, ruled the comprehensive tort reform package effective January 1997 unconstitutional in August of 1999.
The Ohio electorate will have one more chance this year to change the composition of the Ohio Supreme Court. Under the current Supreme Court, Justices Alice Robie Resnick, Andrew Douglas, Francis Sweeney and Paul Pfeifer have a judicial philosophy of "making law." Justices Thomas Moyer, Deborah Cook and Eve Stratton carry the philosophy that justices should "interpret the law." Many physicians and businesses believe Ohio needs to get back to the traditional philosophy of having the courts "interpret the law" written by the Ohio General Assembly.
In November of this year, Supreme Court Justice Eve Stratton, a Republican is up for re-election. Stratton will be running against Judge Janet Burnside, currently a judge in Cuyahoga County with the Court of Common Pleas. Stratton was a dissenting justice when the comprehensive tort reform package was ruled unconstitutional in 1999.
Justice Andy Douglas will retire this year because of the age limits placed on Supreme Court Justices in Ohio. Douglas, a Republican from Toledo, has not been on the side of physicians or business in many of the court decisions that have been handed down. Maureen O'Connor, Ohio's Lieutenant Governor and Director of the Ohio Department of Public Safety, will run for Douglas' Supreme Court seat. Opposing O'Connor will likely be judge Tim Black from Cincinnati. Black ran against Justice Deborah Cook in 2000 and noted to several constituency groups that he would follow Justice Resnick's philosophy.
The AMA has also adopted resolutions seeking to make tort reform a legislative priority for 2002, with specific emphasis on capping non-economic damages. AMA representatives noted that tort reform has already been proven effective based on legislation already in place in Indiana, California and Louisiana where insurance rates have come down as a result. The AMC/NOMA will continue to monitor all facets of this situation and bring you timely updates. For additional information on the situation, please contact Elayne R. Biddlestone at 216-520-1000, extension 321 or at ebiddlestone@amcnoma.org.