After practicing medicine in Illinois for 18 years, Dr. Scott Hansfield moved in July to Waupun, where he is the only ob-gyn in town. Hansfield decided to move shortly after he was told in December of 2002 to expect his medical malpractice insurance costs to jump by 40 to 50 percent.
"I realized I’d be paying more for malpractice insurance than I take home," Hansfield said. "That for me was the breaking point."
According to the American Medical Association, ob-gyns in the Chicago area are paying about $139,696 in medical malpractice insurance premiums. In Wisconsin, ob-gyns are paying about $30,304 in annual medical malpractice insurance. General surgeons in the Chicago area are paying about $92,576, while in Wisconsin they are paying about $19,641. Internists in the Chicago area are paying about $35,756; in Wisconsin they are paying about $5,612.
The American Medical Association says 19 states, including Illinois, are experiencing a medical liability insurance crisis. Many doctors in Illinois have decided to retire, move to other states or stop providing higher-risk medical services because of the excessive cost of medical malpractice insurance there.
"All across Illinois we’re seeing physician flight," said Dr. William E. Kobler, president of the Illinois State Medical Society. Kobler estimates that hundreds of doctors have left Illinois in the last year or two.
Some Illinois doctors, like Hansfield, have moved their practices to Wisconsin, which the American Medical Association says is one of only six states in the U.S. that is not in or near a medical malpractice insurance crisis. The other states avoiding a problem are Indiana, Colorado, New Mexico, California and Louisiana.
Officials in Illinois and Wisconsin are unsure exactly how many physicians have moved from Illinois to Wisconsin because of dramatically rising malpractice insurance costs in Illinois. However, officials in both states acknowledge the trend exists and is increasing as the insurance costs in Illinois continue to rise.
Hansfield said he does not think Illinois doctors are moving to Wisconsin in droves, but he knows of several that move moved just north of the border to Kenosha and Walworth counties.
"They just cross the border and suddenly they can (afford to) practice," said Steve Busalacchi, director of public relations for the Wisconsin Medical Society.
Dr. Jay Alexander, a cardiologist with North Shore Cardiologists in Lake County, Ill., said the annual medical malpractice insurance cost for his 15-cardiologist practice increased from about $233,000 in 2002 to almost $1.1 million this year. Alexander said he and other doctors who are insured by ISMIE Mutual Insurance Co. have been told to expect an increase of at least 7.5% after July 1 this year.
"After July 1, we’ll see more doctors leaving the state or retiring or cutting back on certain procedures or charging (patients) a surcharge," he said. "I’m checking out the licensing requirements in Arizona, California and other states. I will leave the state if it gets much worse."
Hansfield estimated his medical malpractice insurance cost in Wisconsin is about $100,000 less than it would be in Illinois.
The Wisconsin Medical Society points to two factors that have kept the cost of medical malpractice insurance in Wisconsin under control.
The first is the patients compensation fund, created in 1975. Health care providers in the state are required to pay annual fees that are contributed to the fund. That money is used to pay for any awards from medical malpractice lawsuits in excess of $1 million.
Secondly, the state created a cap in 1995 for non-economic damages, also known as pain and suffering, from medical malpractice lawsuits. The cap has increased since then and now stands at $422,632.
"That’s what we have going for us," Busalacchi said referring to the cap and the patients compensation fund. "It’s worked extremely well."
Low medical malpractice insurance costs could be a critical advantage for Wisconsin, which officials say still needs more doctors, despite the influx from Illinois. A task force from the Wisconsin Hospital Association and Wisconsin Medical Society said the state especially needs more doctors for underserved rural areas and inner cities.
"Our favorable malpractice insurance costs is one of the things we have going for us," said Dr. Paul Wertsch, president of the Wisconsin Medical Society. "But that’s still not going to graduate more people from medical school."
The state must try to attract more medical students from rural areas and inner cities who will be more likely to go to work in those areas, Wertsch said.
Doctors who say the patients compensation fund is important for keeping down medical malpractice insurance costs in the state criticized Gov. Jim Doyle last year when he said the state should use $200 million from the fund to help eliminate the state’s budget deficit. Doyle said the money was needed to help maintain Medicaid programs that benefit low-income residents, elderly and the disabled.
Then in his Grow Wisconsin economic initiative, Doyle said the state should take $10 million out of the fund each year to create investment capital.
Doyle said the fund had a surplus, but physicians disagreed.
So far, the Republicans who control the legislature have rejected all proposals by Doyle to take money out of the Patients Compensation Fund.
"We talked about it several times," said Senate Majority Leader Mary Panzer (R-West Bend). "We flatly said ‘no’ each time. We decided early on in the Senate we were not going down that road."
Removing money from the Patients Compensation Fund could jeopardize the fund’s ability to pay for large medical malpractice judgments and could result in higher medical malpractice insurance costs, Panzer said.
"We’re one of several states that don’t have a problem with medical malpractice," she said. "One of the basics of good health care is having quality practitioners who can take care of our families."
Using money in the patients compensation fund for other purposes could also have resulted in lawsuits by physicians, Panzer said.
"This is not state (taxpayers) money, this is physicians money," she said.
Jessica Erickson, deputy press secretary for Doyle, said the governor has no plans to make another proposal for using money from the patients compensation fund for other purposes.
Illinois medical officials say Wisconsin residents should be grateful for the state’s low medical malpractice insurance costs.
Illinois physicians say a cap on non-economic damages, like Wisconsin has, would do the most to restrain medical malpractice insurance costs in Illinois.
"That’s the ultimate answer that solves the problem," Kobler said.
However, trial lawyers who oppose caps on non-economic damages say they would only further hurt patients who have been harmed by medical malpractice.
Non-economic damages benefit patients who have suffered horrible, life-altering injuries from medical malpractice such as lost limbs, disfiguration, blindness and paralysis, said Carlton Carl, director of media relations for the Association of Trail Lawyers of America.
"To suggest penalizing the most serious victims of medical malpractice is not only wrong-headed, it also would have no affect (on insurance costs)," Carl said.
Poor performance by the stock market and low interest rates are the real reason medical malpractice insurance costs have risen, Carl said.
"To make up for investment losses (insurance companies) have increased their premiums," he said.
The insurance industry needs to be reformed, including the elimination of the industry’s anti-trust exemption, Carl said.
Physicians disagree with the trial lawyers pointing to Wisconsin and the other five states that have not experienced the same insurance price spike’s as Illinois, Ohio, Pennsylvania and others have.
"All six states (without a crisis) have some mechanism to limit runaway jury awards," said Dr. John C. Nelson, president elect of the American Medical Association.
Huge rewards for medical malpractice lawsuits have driven up insurance costs in states such as Illinois that do not have cost controls, physicians say.
So far, state legislators in Illinois have not agreed on a way to fix the state’s medical malpractice crisis. Alexander blamed the legislative failure on Democrats, who control all branches of the state’s government and are supported by trial lawyers.
The American Medical Society is lobbying for similar reforms at the national level, but so far the U.S. Senate has not approved them.
In some cases when doctors move out of state they leave thousands of patients behind scrambling to find a new physician. Residents in some rural areas of Illinois are finding it increasingly difficult to find medical specialists who will treat them. Some doctors have decided not to provide higher-risk services, including some ob-gyns who have stopped practicing obstetrics.
As more Illinois doctors quit their practices or reduce services, access to care will become more limited and patients will be put at risk, Alexander said.
"Yes, people will die because of a lack of access," he said. "It’s going to happen."
But until there is an serious health care access crisis and all doctors start charging patients a $100 to $200 surcharge, the state government will not enact reform, Alexander predicts.
The issue will likely continue to be a growing concern, outside of Wisconsin.
"Society is going to have to make some very hard decisions about whether jackpot justice is worth it," Alexander said.
April 2, 2004 Small Business Times, Milwaukee