Director of the Ohio Department of Insurance, Ann Womer-Benjamin, plans to present the Final Medical Malpractice Report to the Ohio Medical Malpractice Commission on May 9th, detailing the report's findings. According to the report, physicians and hospitals should finance any Patient Compensation Fund. The actuarial report found significant flaws in the type of Patient Compensation Fund contemplated in Senate Bill 281, which would provide coverage for amounts awarded above the caps that apply only to non-economic damages. The report indicates this type of patient compensation fund suggested in Senate Bill 281 would have no significant impact on the availability or affordability of malpractice insurance because it is not comparable to coverage currently available and does not provide coverage for economic damages. "There would also be significant opportunity for cost shifting between economic and non-economic damages," as stated in the report.
The Pinnacle report recommended all physician, hospitals, and a broad group of other health care providers be eligible for inclusion in an Ohio Patient Compensation Fund and that participation be voluntary so that the Fund coverage is primarily offered and purchased when market forces have not been able to provide sufficient availability.
Recommendations from the report as follows:
1. All health care providers are required to secure insurance coverage of $250,000 per occurrence to be eligible for coverage from the Patient Compensation Fund. Required aggregate limits would vary between physicians and hospitals.
2. Coverage in an Ohio Fund, if implemented, should begin at the $250,000 per occurrence limit and provide unlimited medical benefits above that amount with coverage up to the Senate Bill 281 caps for non-economic damages.
3. An Ohio Fund should be funded through a rate per physician or per bed for hospitals. The rates would differ based on the relative loss potential or different practice specialties. According to the actuarial firm, the only successful approach to financing a patient compensation fund to date has been through charging health care providers premiums for patient compensation fund coverage as part of their overall insurance costs. The cost to health care providers would be offset by the reduction in their primary insurance premium due to the reduction in primary limits. Any approach to funding a patient compensation fund that does not directly assess health care providers presents the potential to remove incentives for loss prevention.
4. Adoption of a sliding scale on attorney contingency fees (similar to the one in effect in California): 40% on the first $50,000 of damages awarded; 33% on the next $50,000; 25% on the next $500,000; and 15% on an amount exceeding $600,000. Limiting the contingency fees could increase the payments to inured patients by 12% of total damages, on average, without adding to total system costs.
5. Establishment of a Medical Review Board that would make a non-binding determination on the merits of a claim before it goes to trial, which would eliminate some costs from the system. The key benefit of a medical review board is that it eliminates lawsuits from the system before they happen by identifying whether a claim has merit or not.
6. The data collection system created in Senate Bill 281 should be expanded beyond the requirement for common pleas clerks of court to submit annual reports to the Ohio Department of Insurance about claims. The major drawback of the system created in Senate Bill 281 is that claims that are not brought in suit will not be in the database. The report said that information requests should be significantly expanded to cover all medical malpractice claims, regardless of whether they result in a lawsuit. The request for data will need to be redirected to the insurance companies as a special annual data call. Such a system has been used very effectively in other states with patient compensation funds.
Further information may be obtained from the Ohio Department of Insurance at www.ohioinsurance.gov .