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Medical Professional Liability and Access to Obstetrical Care: Is There a Crisis? DEBORAH LEWIS-IDEMA, M. SC. rn ~ he costs of professional liability in- surance have risen dramatically in recent years. Between 1984 and 1987, premiums paid by the average obstetrician-gynecologist rose more than 70 percentto $37,000 per year.) Family practitioners who provide obstetrical services pay almost twice as much for insurance as their colleagues who do not practice obstetrics.2 Surveys by national and state organizations indicate that physicians are dropping the practice of obstetrics or changing the levels and types of care they render in re- sponse to malpractice concerns. Incidents of women who experience extreme difficulty in obtaining adequate maternity services have been reported throughout the United States. The growing sense that there may be a crisis in obstetrical care has particular implications for low-income patients. There has been little improvement in infant and neonatal mortality rates in the United States in recent years, and the number of women receiving late or no prenatal care is large. Low-income patients, who face more barriers to access to care than more affluent patients, are also more likely to be medically at risk, to experience higher rates of infant mortality, and to have low-birthweight babies than more affluent patients. Residents of rural areas are also likely to encounter difficulty in obtaining care: a single physician's decision to stop practicing obstetrics can result in impaired access for women who have trouble reaching distant providers. In this chapter I examine the relationship of professional liability issues and access to obstetrical care for low-income women and women 78

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ACCESS ~0 OBSTETRICS CARE 79 living in rural areas. Drawing primarily on the numerous studies done by state and national organizations in the past several years, ~ attempt to determine whether the sense of crisis is justified and, if so, how the crisis might be addressed. METHODOLOGY Examining the relationship between professional liability concerns and access to care is like assembling a jigsaw puzzle. The research on this question is extremely limited, and there is no scientific study showing that the number of physicians serving low-income women is declining and that the decline is due to malpractice concerns. Various pieces of information from numerous sources must be drawn together to obtain a picture, or at least an outline, of the situation. For this report, I reviewed 30 state studies, principally from state and national medical associations,3 and nine national studies.4 The avail- able literature highlights the impact of professional liability concerns on physician decisions to provide obstetrical care; only a few studies examine access to care directly. The studies vary enormously in exten- siveness and methodology. Some are highly rigorous, whereas others are simple, one-page questionnaires; most are descriptive. Response rates also vary significantly. The most important caution regarding the research is that in a number of cases questions were asked in a manner that presupposed the answer. Almost all of the studies sought to determine whether physi- cians were changing their practices as a result of professional liability concerns. Many studies, however, phrased the question as "Have you changed your practice due to malpractice concerns (or the malpractice crisis)?" This phraseology does not distinguish between situations in which physicians ceased practicing obstetrics because of age, health, or simply boredom and those in which professional liability concerns were their predominant motivation. It is likely that any physician who dis- continued, curtailed, or altered obstetrical practice in the last four or five years can reasonably attribute the decision to malpractice concerns, but there may have been other motivating factors as well. Studies that ask the question in two parts "Have you changed practice? If so, why?" are more likely to separate malpractice from nonmalpractice motivations. Although the available literature may tend to overstate the impor- tance of malpractice considerations in physicians' decision making, such overstatement does not mean the literature should be discarded. As a whole the studies document trends that appear to be influenced by physicians' malpractice concerns. Equally important, the absence of

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80 MEDICAL PROFESSIONAL LIABILITY: VOLUME 1:1 conclusive proof does not obviate the need for policy consideration of the issues surrounding malpractice and access. If there is good reason to believe that access to obstetrical care for low-income women and rural women is being affected by malpractice concerns, to wait for accurate, statistically valid studies would be highly inappropriate. PROFESSIONAL LIABILITY CONCERNS AND CHANGING OBSTETRICAL PRACTICE Several logically related questions must be examined to determine whether professional liability concerns are affecting access to care. To provide a framework for analyzing the widely varying state studies, ~ arrayed the states on each of the reported variables and constructed a median state. What Changes Are Occurring In Obstetrical Practice? The literature indicates that sizable numbers of obstetrical pro- vidersboth obstetrician-gynecologists (ob-gyns) and family practi- tionersare eliminating obstetrics from their practice, reducing care to identifiable high-risk populations, or reducing the overall number of deliveries they perform (Table 11. Elimination of obstetrics: The American College of Obstetricians and Gynecologists (ACOG) reports that in 1987 12.4 percent of its members stopped practicing obstetrics as a result of professional lia- bility concerns; the state surveys report that from 7 to 70 percent of responding physicians have stopped. In the median state, 25 percent of all surveyed obstetrical providers have stopped practicing obstetrics. The studies that surveyed ob-gyns alone report that from 6 to 30 percent of respondents stopped obstetrical practice. In the median state, 17 percent of ob-gyns reported eliminating obstetrics. The attrition rate among family practitioners is higher than that among ob-gyns. The American Academy of Family Physicians (AAFP) reported that, by the end of 1985, 23.3 percent of its member~twice the proportion reported by the ACO~had stopped practicing ob- stetrics because of malpractice concerns. The state studies reported that from 8 to 75 percent of family practitioners had dropped obstetrics over the past five years. Seven of the studies allowed direct comparison of changes between family practitioners and ob-gyns. In only one (Mary- land) was the proportion of family practitioners stopping obstetrics smaller than the proportion of ob-gyns stopping this part of their practice.

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ACCESS no OBSTETRICAL CARE 81 TABLE 1 Summary Data (as percentage) from Studies of Professional Liability and Obstetrical Practice Eliminated Obstetrics Reduced High- Reduced Range All Phys. OB-GYNs Risk Care Volume - All Studies N=33 N=17 N=11 N=13 Minimum 7.00 5.90 16.00 5.80 Maximum 75.00 30.00 48.70 28.00 Median 25.00 14.30 23.60 12.90 State Studies N=27 N=14 N=8 N=8 Minimum 7.00 5.90 16.00 5.80 Maximum 75.00 30.00 48.70 28.00 Median 25.00 17.50 24.30 18.50 Reduced care for high-risk women: The state studies report that from 16 to 49 percent of ob-gyns reduced service to high-risk women. In the median state, almost one-quarter of ob-gyns reduced or eliminated service to this population. This figure is similar to that reported by the ACOG: in 1987, 27 percent of its members reduced or eliminated ser- vices to high-risk women. Reduced volume of obstetrical care: This is perhaps the most diff~- cult practice change to document from the state studies. Only eight of them report on this subject, with 6 to 28 percent of physicians saying they were reducing the number of deliveries they perform. The median was 18.5 percent. By comparison, the ACOG reported that about 13 percent of member ob-gyns reduced their volume of care in 1987; the AAFP reports reductions by less than 10 percent of member family practitioners. The state studies tend to show higher proportions of physicians alter- ing their practice of obstetrics than do the ACOG and AAFP data. This disparity may reflect methodological differences among the state and national studies, but it may also reflect real geographic variation in physician behavior. It is logical to expect that studies would have been conducted in those states in which malpractice issues have been partic- ularly critical to the profession. Are These Changes Occurring Because of Professional Liability Concerns? Physicians consistently report that they are reducing or eliminating their obstetrical practice because of the cost of malpractice insurance or

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82 MEDICO PROFESSIONAL CITY: VOICE ~ TABLE 2 Physicians Reporting Malpractice Issues as a Factor in Their Decision to Change Practice (as percentage) Studies (N= 16) of Studies (N= 13) of Physicians Range All Physicians Who Changed Practice Minimum 9.10 18.60 Maximum 70.00 99.00 Median 24.15 57.00 the risk of being sued. Although the precise numbers reported should be viewed with caution, the direction of these responses is too compelling to discount as an artifact of survey construction. T~renty-nine studies report that between 9 and 99 percent of all physicians surveyed have changed their obstetrical practice because of professional liability issues. The studies were subdivided into those reporting on all physicians and those reporting on physicians who had made practice changes. In the median state, more than half of the physicians who changed their practice said that malpractice concerns were a major factor in their decision (Table 21. In studies in which the question of motivation was separated from the act of changing obstetrical practices, professional liability issues were cited by more than half the respondents as a major determinant in their decision to change. In Georgia, for instance, 55 percent of ob-gyns dropping obstetrics cited malpractice concerns as the sole reason for their decision. In Illinois, 57 percent cited malpractice insurance costs and 44 percent cited the risk of being sued. In Kentucky, 78 percent of family physicians stopping obstetrics and 38 percent of those reducing their caseloads cited malpractice concerns. Studies of family practitioners have tended to provide respondents with the broadest range of choices for describing their motivation. These studies show a greater influence of personal factorsbut malpractice concerns are of equal or greater importance. Although the Alabama, Ohio, and Washington reports found that 25 to 50 percent of respondents cited personal or professional concerns (age, health, time, lack of alter- native physician coverage), 50 to 70 percent of respondents cited mal- practice issues as a key factor in their decision. Only one study (Ohio) included statistical tests on the relationship between malpractice concerns and the decision to stop practicing obstet- rics. The relationship was found to be statistically significant. Summary It is clear that major changes are occurring in the practice of obstet- rics. A sizable number of physicians are eliminating or reducing obstet-

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ACCESS T0 OBSTETRICS CARE 83 rical services and reducing services to high-risk women. Most physi- cians cite malpractice-related issues as a principal factor in their ~ c .eclslon. Certainly, the importance of malpractice concerns as the sole determi- nant of physician behavior may be overstated. Even apart from the wording of questionnaires, the current climate, both within the profes- sion and among the public, is one in which the "malpractice crisis" is accepted as a rational explanation for the decision to stop or reduce provision of obstetrical services. For some physicians who are consider- ing changing their practice for personal reasons, malpractice may sim- ply be the factor that finally tips the balance. Nevertheless, the sheer weight of reports from physicians indicates the importance of mal- practice concerns in their decisions to eliminate or reduce obstetrical care. THE IMPACT OF PHYSICIAN PRACTICE CHANGES ON ACCESS IY) CARE Only nine of the state studies specifically sought information on the impact of changes in physician practice on access to care. Relevant information is also available from state agencies and national studies and from research that has looked specifically at changes in rural areas. Access for Medicaid Recipients and Low-Income Women All of the studies that asked physicians specifically about care for low- income patients reported declines in provider participation. In Illinois, 17 percent of physicians practicing obstetrics plan to reduce participation in Medicaid. Almost two-thirds of Washington ob- gyns limit the number of Medicaid patients they serve. In West Virginia, 41 percent of ob-gyns (compared with an average of 18 percent for all physicians) report that they do not serve Medicaid patients owing to liability concerns. Almost 13 percent of Oregon obstetrical practitioners stopped serv- ing Medicaid patients during 1986-1987; another one-third specifically limit their Medicaid caseloads. About 10 percent have recently stopped providing charity care, and more than 40 percent limit the charity care they provide. Only 45 percent of Kentucky physicians serve Medicaid obstetrical patients. Three-quarters ofthe physicians who have reduced their provi- sion of obstetrical care cite malpractice issues as a reason for nonpar- ticipation in Medicaid. Only one-third of Maryland ob-gyns accept Medi- caid.

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84 MEDICAL PROFESSIONAL LIABILITY: VOLUME II In January 1987, 133 physicians in Denver provided obstetrical services to Medicaid patients; the state Medicaid program reported that, by December of that year, only 9 (apart from hospital-based personnel) were still providing such care. In the entire state of Colorado, only 46 primary care physicians were accepting Medicaid obstetrical patients in December 1987.5 In Texas, indigent women on average constitute 10 percent of the ob-gyn caseload. About one-third of ob-gyns report that they are limit- ing indigent care "a great deal"; another one-third are not limiting care at all. More than half the ob-gyns in North Carolina had been providing services in local health departments. Almost 30 percent reported stop- ping because of malpractice concerns. One effect of reduced physician involvement in Medicaid is that case- loads for those who continue to provide care are increasing. In Washing- ton State, the average number of deliveries per Medicaid provider rose from 14.8 in fiscal year 1985 to 16.8 in fiscal year 1986. Although the number of participating ob-gyns actually increased slightly, the number of participating family and general practitioners fell by 9.3 percent. At the same time, the number of Medicaid deliveries increased. As a result, the average number of Medicaid deliveries for ob-gyns rose from 26.4 in fiscal year 1985 to 28.3 in fiscal year 1986. For family physicians, the increase was from 7.5 to 8.3 deliveries (Table 31. A recent National Governors' Association survey of state Medicaid and Maternal and Child Health agencies includes at least one response from each state (the District of Columbia did not respond). This report therefore may provide the broadest overview of the impact of malprac- tice concerns on access to care. According to the administrators of public programs, malpractice issues are reducing significantly the number of participating providers, and some areas of their states are experiencing major problems in access to care.6 More than 60 percent of Medicaid programs and almost 90 percent of Maternal and Child Health programs are experiencing significant difficulty in finding providers who are willing to render maternity care. Nine out of ten programs say that rising malpractice insurance costs have contributed to this problem. ~ Three-fifths of the agencies reported that physicians have stopped providing care to their clients because of malpractice concerns. Seven out often agencies said that the number of providers was decreasing for that reason.

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ACCESS ~0 OBSTETRICAL CARE 85 TABLE 3 Changes in Deliveries by Medicaid Maternity Care Providers in Washington State, 1985-1986 Change Deliveries 1985 1986 (%) All providersa 858 821 -4.3 Mean number per provider 14.8 16.8 13.6 Percentage of providers with 1-5 deliveries 53.3 50.2 -5.8 21+ deliveries 18.6 20.5 10.2 Obstetrician-gynecolog~sts 235 246 4.7 Mean number per provider 26.4 28.3 7.3 Percentage of providers with 1-5 deliveries 32.3 30.9 -4.3 21+ deliveries 35.3 37.4 5.9 Family general practitioners 345 313 -9.3 Mean number per provider 7.5 8.3 10.8 Percentage of providers with 1-5 deliveries 53.6 59.1 10.2 21+ deliveries 7.5 8.0 6.0 a Includes clinics, midwives, and unidentified providers. SOURCE: Washington Department of Social and Health Services. 1987. Maternity Care Access. Olympia. In response to an open-ended question, 21 states reported at least 484 counties in which low-income women, Medicaid recipients, or both have limited access to prenatal and delivery services. Because this information was not specifically requested in the questionnaire, re- sponses may understate the extent of the problem. ~ About halfofthe agencies regarded low reimbursement rates as the primary deterrent to provider participation in their programs. One-fifth considered malpractice insurance costs the most important reason. Access to Care In Rural Areas Family practitioners have traditionally been key providers of obstetri- cal care in rural areas. The high rates at which these physicians are leaving obstetrical practice appear to be generating significant access problems in some parts of the country. It is estimated, based on data from the AAFP and the ACOG, that the number of obstetrical providers in nonmetropolitan areas has fallen by about 20 percent over the past five years. This decline is particularly significant among family physicians (Figure 1~. ~ In 1986, 17 counties in Georgia had no obstetrical providers; there were only 25 physicians providing obstetrical care in all of rural Nevada.

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86 MEDiC~ P~FESSiONAL CITY: VOILE ~ One-third of Arizona's family physicians outside Maricopa and Pima counties (Phoenix and Tucson) had stopped providing obstetrical care by the end of 1985. In Idaho, more than one-quarter of ob-gyns have dropped obstetrics; in West Virginia, another largely rural state, more than half the ob-gyns have considered leaving the state. Rural physicians perceive a greater potential impact on access to care than do urban physicians. In California and Oregon, a greater proportion of rural physicians reported women without access to care. Although more physicians have stopped obstetrical practice in Detroit than in rural Michigan, 69 percent of rural physicians report access problems, compared with 61 percent in Detroit. A 1985 survey of small and rural California hospitals reported that 30 of 56 respondents providing obstetrical care had family physicians on their staff who were planning to drop obstetrics. Thirty-six of the hospi- tals (64 percent) indicated that they would cut back or eliminate their obstetrical services. in cc5 12 ~5 o ~ 10 co ce ._ .~' 8 An p77] Obstetrician l///l Gynecologist ~ Family Practitioner Prior to Current Malpractice Crisis FIGURE 1 Changes in number of rural physicians practicing obstetrics.

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ACCESS TO OBSTETRICAL CARE 87 Sixty of the agencies responding to the National Governors' Asso- ciation survey reported geographic areas with significant access prob- lems and 87 percent of these reported that the access problem was particularly acute in rural areas. Thirty-five of the 50 states reported problems with provider participation and access to care in rural areas. Summary As a whole, the literature suggests that professional liability concerns among physicians are generating access problems. In instances in which attrition from obstetrical practice has been great, caseloads for the remaining physicians increase, as suggested by the experience in Wash- ington State. This trend creates a vicious circle, wherein physicians who continue to accept Medicaid patients experience greater pressures on their timepossibly to the point where they need to begin restricting their Medicaid practice. With fewer physicians providing obstetrical care, the low-income patient or Medicaid recipient, who may be per- ceived as less financially, socially, or medically desirable, can end up competing with a middle-class patient for the physician's time. Although reduced availability of care for high-risk patients affects the entire population, it has particular implications for low-income women. These women are statistically more likely to be medically at risk and have higher rates of infant mortality and low-birthweight babies. This population requires easier access than the general population to the kind of care appropriate for high-risk mothers; yet that care appears to be less widely available to them. Every study that looked at the relationship between malpractice concerns and Medicaid found that physicians report that they are reduc- ing their Medicaid caseloads, at least in part, because of malpractice concerns. The state agencies, which must rely on these physicians to render care to their clientele, report significant problems in recruiting and retaining providers. In a number of counties, clients of public pro- grams are experiencing difficulty in obtaining care. Although Medicaid payment rates, traditionally the primary deterrent to physician partici- pation, continue to be a significant drawback, many providers cite malpractice issues as a key reason for not serving Tow-income patients. Although the causal relationships among malpractice issues, changes in obstetrical practice, and access to care for low-income women and rural women cannot be precisely documented with the available data, the weight of the evidence is in one direction. It is reasonable to conclude that access to care for Medicaid and other Zow-income women is being affected by changes in obstetrical practice generated by professional lia- bility concerns.

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88 MEDiC~ PROFESSIONAL CITY: VOLUME ~ MEDICAID RECIPIENTS AND PROFESSIONAL LIABILITY Physicians' concerns about professional liability issues can be divided into two categories: (1) the cost of malpractice insurance and (2) the risk of malpractice litigation. Each is an important factor in physicians' practice decisions. Cost of Insurance Coverage The rise in malpractice insurance premiums has intensified tradi- tional provider concerns about low rates of Medicaid reimbursement for services. The argument is phrased in two ways. The first contends that payments are too low to cover the costs of malpractice coverage. The second maintains that, in the face of rising malpractice insurance costs, physicians must devote more time to private patients to meet expenses. It is important to understand that how much a provider must charge to meet all expenses, including malpractice insurance, is difficult to ascertain and depends to some extent on the net income desired by the practitioner. The ACOG reported that in 1986 malpractice premiums represented 20 percent ofthe average ob-gyn's overhead; the ACOG also reported that premiums represented 10.3 percent of gross income in 1986, compared with 9.7 percent in 1984.7 Thus, although malpractice premiums rose 46.7 percent in the two years, the proportion of gross income devoted to malpractice insurance rose by only 6.2 percent. This differential must have been covered by increasing charges to private patients. Because family practitioners tend to have many fewer obstetrical patients than do ob-gyns, for them the higher premiums may pose a clear economic choice. Table 4 uses data from the state of Washington to illustrate this point. Family physicians who do obstetrics paid an addi- tional $9,000 for obstetrical coverage; ob-gyns paid an additional $11,000 above premiums for gynecology only. The family physician performing 30 deliveries a year (the median number) paid $300 per delivery for insurance. Ob-gyns, because of their much larger volumes, had much lower premium costs per delivery. An ob-gyn with the median number of deliveries (121) paid about $93 per delivery for obstetrical malpractice coverage. Few would disagree that Medicaid programs generally pay providers at rates well below those of private insurers or the average community charge. In 1986 the average Medicaid reimbursement for total obstetri- cal care rendered by an obstetrician-gynecologist was $550, ranging from $214 to $1,508. Data from 36 states show that Medicaid payments averaged 44 percent of the approximate community charge for prenatal

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ACCESS T0 OBSTETRICAL CARE 89 TABLE 4 Estimated Additional Malpractice Premium Cost Per Delivery, Family Physicians and Obstetrician-Gynecologists in Washington State, 1986 Added Cost for Number of Malpractice Cost of Insurance Physician Deliveries Insurance Per Delivery Family Physicians Median, rural M.D.s 35 9,187 262.49 Median, all M.D.s 30 9,187 306.23 Maximum, rural M.D.s 150 9,187 61.25 Maximum, all M.D.s 200 9,187 45.94 Obstetrician-Gynecologists Median, semirural M.D.s 110 11,244 102.22 Median, all M.D.s 121 11,244 92.93 Maximum, semirural M.D.s 210 11,244 53.54 Maximum, all M.D.s 350 11,244 32.13 NCYIES: Because no rural ob-gyns were identified, data for specialists in semirural areas were used. The authors reported premiums for family physicians practicing obstet- rics at $13,511; premiums for those not practicing obstetrics or performing surgery were $4,324. For ob-gyns, premiums were $33,026 with obstetrics and $21,782 for surgical gynecology without obstetrics. SOURCE: Rosenblatt, R., and B. Detering. In press. Changing patterns of obstetric practice in Washington State. Family Medicine. care and routine delivery. The highest state paid 76 percent; the lowest, 14.8 percent.8 In many cases, these rates represent major increases over prior years because at least 20 states increased payments between 1984 and 1986. Additional increases are being consideredand enacted by states, particularly those that are adopting the expanded Medicaid coverage options for children and pregnant women available under the Budget Reconciliation Act of 1986. The problem of Tow reimbursement rates is complex, reflecting pres- sures on state budgets, competition among provider types for improved coverage and payments, and general state philosophies regarding Medi- caid. The question of whether Medicaid reimbursement should reflect the rising costs of malpractice insurance is even more complicated. Should Medicaid reflect the full cost of malpractice coverage? Insurance premiums do not vary with caseload; therefore, one could reasonably argue that service to Medicaid patients is a marginal cost and payments that do not reflect the full cost of coverage are not necessarily unreason- able. If Medicaid reimbursement policies were revised to assume part of the cost of malpractice insurance directly, should these costs include only the obstetrical portion of the premium?

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90 MEDiC~ PROFESSIONAL I: VOILE ~ Fear of Litigation Although insurance costs have been the focus of policy debate, partic- ularly at the state level, risk aversion, or the fear of suit, is an equally strong motivating factor for physicians. Nobody wants to be sued or to have to defend his or her professional abilities in court. Even when the physician wins the case, the psychological impact of having been sued is enormous. Seven out of ten ob-gyns are likely to be sued in the course of their professional lives. Although family physicians are sued less fre- quently, they may fee] more vulnerable because of their less specialized training. The physician's desire to manage his or her individual risk and to avoid situations that might lead to litigation is a normal human response to the current climate. For low-income women and women covered by Medicaid, access to care may be affected as muchor moreby physicians' fears of suit as by reimbursement rates. As previously noted, low-income patients tend, statistically, to be at greater medical risk; they also tend therefore to be more affected by reductions in the provision of care to high-risk women. In addition it is possible, although difficult to document, that physicians perceive the reduction of care to Medicaid and low-income women as an effective means of reducing their exposure to high-risk patients. Managing high-risk pregnancies requires a commitment to continu- ity on the part of patient and physician. If the physician believes that this commitment may not be forthcoming, he or she may be less willing to initiate service. It may be easier for the physician to stop serving Medicaid patients altogether than to attempt to make such judgments (if desired) on an individual basis. It is ironic that the very factors that call for increased access to care can also intensify a physician's sense of risk when serving Tow-income patients. The extent to which Tow-income women receive late or no prenatal care and are therefore at greater risk has been well docu- mented. Indeed, such data are at the heart of the Medicaid expansions recently established by Congress and are the focus of such groups as the National Commission on Infant Mortality Prevention. Yet it is precisely this information that may underlie a physician's sense that service to low-income and Medicaid patients increases the risk of malpractice litigation. A final issue, which calls for more extensive discussion, is the notion that "the poor sue more." The extent of this belief among physicians is not known, but anecdotal information suggests the belief is held by a significant minority. This issue raises questions of both phraseology and fact. Does "the poor" refer just to Medicaid recipients or to any low-income person? How

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ACCESS no OBSTETRICS CANE 91 is "poor" defined in terms of income? It is possible that the concept of "the poor" is defined by individual perceptions, which could be flawed. The phrase "sue more" could mean that the poor sue more frequently than the rest of the population at risk. Does it mean they bring more "frivo- lous" suits? If the poor do sue more frequently, is it because they are at greater risk of malpractice incidents than the nonpoor? To analysts, the statement "the poor sue more" seems almost counter- intuitive. The legal literature indicates that the low-income population generally has less access to the legal system a fact that would lead one to expect the poor to "sue less." Because malpractice actions are fre- quently brought on a contingent fee basisand awards are usually based on lost earningsattorneys should have less financial incentive to take cases for the poor. Currently available data provide very limited information on the relation of income to malpractice suits. The Department of Health, Education, and Welfare's Commission on Medical Malpractice found in 1973 that greater numbers of"negative medical incidents" were associ- ated with higher incomes (the study did not examine claims rates).9 A study in Cook County, Illinois, in the 1970s found that black plaintiffs constituted almost 25 percent of the county population but accounted for only 11 percent of malpractice suits.~ A 1986 study by Weismann and colleagues also found a negative relation between service to minority patients and a physician's likelihood of being sued. Five studies that specifically examine Medicaid recipients and mal- practice litigation arrive at conflicting results. Studies of closed claims from malpractice insurers conducted by the U.S. General Accounting Office (GAO)~2 and by the State of Maryland showed that Medicaid recipients brought suit in roughly the same pro- portion as their numbers in the population. The GAO analyzed a sample of all claims; 5.8 percent were brought by Medicaid patients, who ac- count for about 9 percent of the U.S. population. Average expected payout for a Medicaid plaintiff was almost $25,000; the payout for the average privately insured patient was almost $250,000.~3 In Maryland, Medicaid recipients accounted for about 13 percent of ob-gyn service claims between 1977 and 1985. In 1986 Medicaid recip- ients constituted about 19 percent of obstetrical admissions to Maryland hospitals.~4 A nationwide survey of ob-gyns regarding fertility-control services asked several questions about malpractice experience. The study found no significant correlation between Medicaid participation and threat- ened or actual malpractice litigation.~5 Two surveys of providers found higher rates of litigation among Medicaid patients. Respondents in the 1986 Washington State survey of

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92 MEDICAL PROFESSIONAL LIABILITY: VOLUME II physicians said that 26 percent of their reported malpractice suits had been initiated by Medicaid recipients, whereas Medicaid patients ac- counted for only 17.6 percent of their practices. Recently, the ACOG reported on a nationwide survey of hospitals' malpractice claims in 1982. Hospitals reported that Medicaid patients represented 17.1 per- cent of deliveries but initiated 24.8 percent of malpractice claims (this finding was not statistically significant. The data that are currently available neither substantiate nor dis- prove the belief that "the poor sue more." All of the studies suffer from methodological problems that may be inherent in any analysis of this issue. Studies of malpractice claims that distinguish among claimants' health insurance status have a very large proportion of claims for which the payer status is unknown. These claims were eliminated in calculat- ing the percentages presented above, a decision that assumes that the unknowns are distributed similarly to the knowns. Given the large number of unknowns, this assumption may be faulty. Surveys of physicians are subject to flaws if physicians report per- ceptions of patient payer status. There is some evidence that physicians tend to overstate the proportion of Medicaid patients in their practiced Study authors in Washington State could not determine whether this type of overstatement affected their data. The results of the ACOG hospital survey may have been influenced by the nature of the respondents. One-third of the hospitals had more than 2,000 deliveriesand accounted for 70 percent of the reported claims. In contrast to smaller facilities, hospitals of this size are more likely to be regional neonatal centers or high-risk obstetrical centers factors that would increase both the Medicaid caseload and the potential for "bad outcomes" and possible malpractice litigation. In addition, large hospitals tend to be in urban areas, which have larger Medicaid popula- tions. Danzon's studies of malpractice have shown that urban areas tend to have higher rates of malpractice litigation general. Although the total sample drawn by the ACOG was statistically reliable, the size (313 hospitals and 306 claims) does not allow for analysis of differences in claims by hospital size. CONCLUSIONS It appears that the professional liability crisis is generating a com- mensurate crisis in access to maternity services, particularly among low-income women and rural women. If physicians continue to respond

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ACCESS ~0 OBSTETRICS CARE 93 to their professional liability concerns by eliminating or reducing their obstetrical services, the access problem is likely to intensify and touch even those areas of the country that are not experiencing problems today. Effective implementation of the new Medicaid expansions will call for creative efforts to address the professional liability concerns of physicians as they relate to participation in Medicaid. Although the causal relationships between professional liability con- cerns and service to Medicaid patients are not fully established, Medi- caid reimbursement rates and fear of suit appear to be primary factors. The empirical evidence suggesting that physicians who serve Medicaid patients are at greater risk of malpractice litigation is inconclusive at best; yet the perception may have assumed its own reality. In today's litigious climate, the rational response to a belief that service to low- income women increases the risk of litigation is to reduce the provision of such care. This chapter has focused on the implications of the malpractice insur- ance crisis for access to obstetrical care. Further research is clearly needed to document trends more fully and to examine the relationship between patient income and malpractice suits; exploration of policy options, however, probably should not await the results of such studies. The weight of current evidence suggests that action may be needed before the research could be completed. Several states have attempted to address the insurance and access issues. Virginia's new no-fault law includes a requirement that partici- pants in the fund also take part in developing a plan of care for Medicaid recipients and other indigent women. Missouri has adopted provisions to cover liability insurance costs for physicians who contract with local health departments; Montgomery County, Maryland, recently adopted . ~ s1m1 ar provisions. The federal government could assist states in these endeavors by providing greater flexibility in the Medicaid programs. One route would be to authorize higher Medicaid matching payments in specified situa- tions. In fiscal year 1988 the federal government paid 50 to 80 percent of medical expenditures, with the rate varying among states. States might be eligible for higher matching rates to promote recruitment of physi- cians in areas with few ob-gyns; to enable the Medicaid program to employ physicians, if necessary; to develop systems of care that might reduce the physician's sense of risk when serving Medicaid recipients; or to experiment with addressing malpractice costs directly by helping to pay premiums. Another approach would be through defined Medicaid waivers. Medi- caid law provides reimbursement for specified services to identified recipients. Under the law, all providers offering that service must be

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94 MEDICAL PROFESSIONAL LIABILITY: VOLUME II eligible for the same rate, even though payment rates may vary geo- graphically or by specific service. These provisions restrict the ability of states to develop targeted solutions to malpractice-related problems. For example, one state Medicaid program has provided funds to help a local health department in recruiting physicians for health department and Medicaid programs. Other approaches might be to increase reimburse- ment rates for physicians with large Medicaid practices (to compensate for their rising malpractice insurance costs) or to provide some state funds to pay part of the cost of a malpractice judgment in favor of a Medicaid patient. It appears that these expenditures would not now qualify for federal matching funds. The U.S. House of Representatives committee report for the budget reconciliation bill of 1987 included a program of Medicaid demonstra- tions to improve physician participation. As examples of potential dem- onstrations, the report specifically cited programs to address profes- sional liability concerns, including assistance in paying premiums (or ensuring coverage). The proposal was dropped in the final stages of conference committee negotiation; it may be worth reconsidering. Further analysis may indicate other ways of easing the access diff~- culties posed by professional liability concerns. It is important that feasible policy options that address the access issues generated by mal- practice concerns be developed and implemented. It would be unfortu- nate, to say the least, if the national objective of improving maternity care and birth outcomes among low-income women, a goal embodied in the initiatives of the Budget Reconciliation Act of 1986 (and 1987), should founder on the rock of malpractice insurance costs. REFERENCES AND NOTES 1. Unless otherwise noted, national data on obstetrician-gynecologists are from three American College of Obstetricians and Gynecologists (ACOG) studies: 1983. Profes- sional Liability Insurance and Its Effects: Report of a Survey of ACOG's Membership; 1985. Professional Liability Insurance and Its Effects: Report of a Survey of ACOG's Membership; 1988. Professional Liability and Its Effects: Report of a 1987 Survey of ACOG's Membership. Washington, D.C. 2. Unless otherwise noted, national data on family physicians are from the American Academy of Family Physicians (AAFP). 1986. The Family Physician and Obstetrics: A Professional Liability Study. Kansas City, Mo. The AAFP did a second study, in 1987, but the response rate was much lower than that in the 1986 study. 3. The following state studies (in alphabetical order by state) were reviewed for this report: Alabama Medical Association. 1985. State of Alabama Survey on Obstetrical Care; Crump, W., and D. Redmond.1986. Final report: A survey of family physicians providing OB care. Ala. Med.; Darnell, H. 1986. Current status of family practice obstetrics in Alabama. Ala. Med. (September):36-38; Gordon, R. J., G. McMullen, B. D. Weiss, and A. W. Nichols.1987. The effect of malpractice liability on the delivery

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ACCESS T0 OBSTETRICS CARE 95 of rural obstetrical care. J. Rural Health (Arizona) 3:7-13; California Academy of Family Physicians. 1985. Rural hospital center survey. Memorandum. December 6; California Medical Association.1987. Professional liability issues in obstetrical prac- tice. Socioecon. Rep.25, nos.6 and 7; Medical Society ofthe DistrictofColumbia.1985. Survey of obstetricians; Georgia Obstetrical and Gynecological Society. 1985 and 1987. Manpower surveys; Idaho Medical Association. 1987. Survey of members; Illi- nois Department of Public Health. 1987. Changes in Availability of Obstetrical Services in Illinois; Iowa Medical Society and Iowa Academy of Family Physicians. 1985. Survey of family physicians; Kansas Medical Society. 1985. Professional lia- bility survey. Kans. Med. 43; Bonham, G. S. 1987. Survey of Kentucky obstetrical practice. University of Louisville, Urban Studies Center, Louisville; Ob/Gyn Society of Maryland. 1986. Survey; Weissman, C., M. Teitelbaum, and D. Celentana. 1987. Physicians' practice changes in response to malpractice litigation. Paper presented at the American Public Health Association annual meeting, October 20 (Maryland); Massachusetts Ob-Gyn Society. 1986. Survey; Block, M. 1985. Professional Liability Insurance and Obstetrical Practice. Study commissioned by the Michigan State Medical Society and the American College of Obstetricians and Gynecologists. Lans- ing; Minnesota Ob-Gyn Liaison Committee. 1986. Survey; Smucker, D. R. 1988. Obstetrics in family practice in the state of Ohio. J. Fam. Erac. 26:165-168; Oregon Medical Association.1987. The Impact of Malpractice Issues on Patient Care: Declin- ing Availability of Obstetrical Services in Oregon. Portland; Texas Medical Associa- tion. 1985 and 1986. Professional liability insurance surveys; Virginia Obstetrical and Gynecological Society. 1985. Survey of Virginia ob-gyns; University of Washing- ton School of Public Health and Community Medicine.1986. The Effects of Changes in the Medical Liability Market on Washington Obstetricians. Final Report to the Washington State Medical Association. Seattle; Rosenblatt, R. A., and B. Detering. In press. Changing patterns of obstetric practice in Washington State. Fam. Med.; Rosenblatt, R. A., and C. L. Wright.1987. Rising malpractice premiums and obstetric practice patterns. Western J. Med. 146:246-248; West Virginia State Medical Asso- ciation. 1985. Physician survey. 4. In addition to the three ACOG studies and the two AAFP surveys cited above, national studies include Tietze, P. E., P. S. Gaskins, and M. McGinnis. 1988. Attrition from obstetrical practice among family practice residency graduates. J. Fam. Prac. 26:204-205; MACRO Systems, Inc. 1986. Medical Malpractice Liability Coverage in the 1980s: Threat to Patient Access to Health Care? Final Report. Washington, D.C.; National Governors' Association, Center for Policy Research, Health Policy Studies. 1988. Increasing Provider Participation: Strategies for Improving State Perinatal Care Programs. Washington, D.C.; Weissman, C., M. Teitelbaum, and L. Morlock. 1988. Malpractice claims experience associated with fertility-control services among young obstetrician-gynecologists. Med. Care 26:298-306. 5. State of Colorado, Department of Social Services, fiscal year 1989 budget hearings. 6. National Governors' Association. 1988; see note 4. 7. ACOG. 1988, p. 12. 8. National Governors' Association. 1988; see note 4. The report includes discussion of the methodology used in developing the estimates. 9. U.S. Department of Health, Education, and Welfare. 1973. Report of the Secretary's Commission on Medical Malpractice. DHEW Pub. no. (OS) 73-89. Washington, D.C.: Government Printing Office, pp. 658-694. These data do not mean that the poor experience fewer incidents of malpractice; rather, the author hypothesized that the poor may be less likely to perceive an experience as a case of malpractice.

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96 MEDICO P~FESSiONAL LAITY: VOICE ~ 10. National Health Law Program. 1987. Medical Malpractice: A "Crisis" for Poor Wo- men. Clearinghouse Review. Los Angeles, pp. 1277-1286. 11. Weissman et al. 1988; see note 4. 12. General Accounting Office (GAO), U.S. Congress.1987. Medical Malpractice: Charac- teristics of Claims Closed in 1984. GAO/HRD-87-55. Gaithersburg, Md. 13. Retabulation of the GAO data was provided by Laura Morlock, The Johns Hopkins University. The published GAO data include payout in one year. Morlock retabulated the data to include total payout over time. 14. Unpublished data on 10 years of malpractice claims were provided by Laura Morlock, The Johns Hopkins University. Hospital admission data were provided by the Mary- land Health Services Cost Review Commission. 15. Weissman et al. 1988; see note 4. 16. American College of Obstetricians and Gynecologists. 1988. Hospital Survey on Obstetric Claim Frequency by Patient Payor Category. Washington, D.C. 17. Kletke, P. R., S. M. Davidson, J. D. Perloff, D. W. Schiff, and J. P. Connelly.1985. The extent of physician participation in Medicaid: A comparison of physician estimates and aggregated patient records. Health Serv. Res. 20:503-523. 18. Danzon, P. 1986. The frequency and severity of medical malpractice claims: New evidence. Law Contemp. Prob. 49(Spring):57-84.