By Brian E. Clark
MADISON – For the past decade, Wisconsin has lured doctors from around the country – in part because they found the Badger State’s low malpractice insurance premiums attractive.
Even with those stable rates – stemming primarily from a 1995 cap on pain and suffering losses – rural areas have found it difficult to attract physicians, according to Mark Belknap, an Ashland (pop. 8,500) internist who is president of the Wisconsin Medical Society.
With last week’s state Supreme Court decision that overturned – on constitutional grounds – the non-economic damages cap of $445,000, he said it will become more difficult to entice doctors to set up practice in non-urban areas.
Other fall-out will include a decline in services offered in rural areas, a significant increase in malpractice insurance rates and rising costs for patients, he predicted.
Though no specific plans have been formulated, state legislators are already talking about crafting bills that would restore the cap. And, among some medical groups, there is talk of a constitutional amendment being floated at the Capitol.
Assemblyman Sheldon Wasserman, D-Milwaukee, the Legislature’s only practicing physician, said the high court decision could have “potentially catastrophic” consequences.”
On the opposing side, David Skoglind, president of the Academy of Trial Lawyers, called the high court decision a “tremendous victory” for ordinary citizens.
Skoglind said the cap had imposed hardships on the most severely harmed victims of medical negligence – children, the elderly and stay-at-home parents who do not have incomes. He said the cap had undermined the right to trial by a jury.
Wasserman cited a concurring opinion by Justice Patrick Crooks and said he is confident Wisconsin can have a cap on non-economic damages that is constitutional.
Wasserman, an obstetrician and gynecologist, urged the fellow legislators to act immediately to fashion a new statute that would pass Supreme Court review.
“I am confident that we can come up with a cap that balances the rights of Wisconsin citizens to jury trials with the legitimate legislative objectives of encouraging health care providers to practice in Wisconsin and reducing overall health care costs,” he said.
Assembly Speaker John Gard, R-Peshtigo, said “fixing this ruling will be a top priority” for Assembly Republicans.
He also called the Supreme Court’s ruling “shortsighted” and said it would jeopardize quality health care for state residents, “especially for folks in rural areas.”
Gard also noted that the Wisconsin law overturned by the high court had become a nationwide model for “frivolous lawsuit reform and helped make Wisconsin a magnet state for good doctors.”
Belknap, who has practiced in Ashland for 23 years, said the doctors in his community serve a large surrounding area in the far north of Wisconsin.
He noted that until two years ago, Ashland had only one surgeon. When that doctor was gone, emergency cases had to go to Duluth, 75 miles away.
“If the chopper was not flying or the weather was bad, we had a crisis,” he said.
Since then, however, Ashland has added two surgeons.
“Because of our favorable malpractice situation, we were able to recruit surgeons in the middle of their careers and who wanted to escape ‘exhorbitant’ premiums in the states where they were practicing,” he said.
“We now have surgical service 24/7,” he said. “But we probably wouldn’t without that cap.”
Belknap declined to say what he pays for malpractice insurance, but said he expects it to rise significantly if the cap is not reinstated.
“Insurance will be an issue in determining how long I work,” said Belknap, 53. “No one wants to work for the rest of his or her life to pay for malpractice premiums.”
Belknap also predicted family practice doctors who deliver babies will drop that service because of the danger of lawsuits. “They will say, ‘maybe I shouldn’t do this,” he said.
Belknap said doctors do not practice in Ashland to make a lot of money.
“I live a simple life,” he said. “And we are a poor area with a lot of people on medical assistance, which only pays about 28 percent of the cost of care.”
Belknap said it has been difficult to attract young doctors to the area.
“The age of doctors here is high and it’s not improving,” he said. “We looked for a long time to attract new doctors here and ended up getting two from Poland who had trained in the United States.”
Belknap said he is encouraged that legislators have promised they will make reinstating the cap a priority.
“I’m glad they seem to understand that this will have an effect on costs, on service and recruitment,” he said. “It also will change the climate and tenor of doctor-patient interactions.”
Bill Montei, CEO of the physician-owned insurance company PIC Wisconsin, predicted malpractice rates will go up for individual doctors, groups and hospitals.
He said PIC’s accountants are now trying to figure out the new costs.
“Everything changed last week,” he said. “And unless there is legislative relief or a constitutional amendment, costs will have to go up.”
But he said he would not be surprised to see premiums go up by 20 percent in the future.
“For an ob-gyn in Spooner who might have to pay $40,000 annually, that could affect his or her ability to stay in that area,” he said. Currently, he said the obgyn base rate to PIC is $33,000.
“Some family practice doctors might choose to get out,” he said. “If they are only clearing $80,000 to $90,000, adding $5,000 to $10,000 in insurance would be a big impact.”
Though huge awards for pain and suffering are relatively rare, he said they make insuring physicians unpredictable.
In Wisconsin prior to the non-economic cap, the largest jury awards were less than $10 million.
But in the Chicago area, he said there have been awards of $20 to $30 million.
In Wisconsin, Montei said a family practice doctor now pays PIC around $5,700 for malpractice insurance. (Specialists pay more.) In Rockford, which PIC also serves, a family practice physician pays $20,000. The firm does not insure Cook County doctors.
In Wisconsin, that $5,700 would buy $1 million worth of insurance. That covers the $445,000 cap in non-economic damages and another $555,000 in economic damages. Anything above the $555,000 in economic damages would be covered by the doctor-financed Wisconsin Patients Compensation Fund, .
Teresa Wedekind, who manages the fund, said it now has long-term investments worth nearly $650 million. She said family practice doctors pay $859 a year into the fund, while neurosurgeons and ob-gyns pay more than $5,000 a year.
She said she did not know how much the rates will increase because of the Supreme Court decision.
“It is too early to tell right now,” she said. “We have our actuaries working on it.”