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3 The Erects of Medical Professional Liability on the Availability of Obstetrical Providers r rom the outset, the committee was disturbed by reports of obstetricians, family physicians, and nurse- midwives abandoning obstetrical practice because of the expense of professional liability insurance or the problems associated with medical liability. The committee agreed to study these reports and to assess the implications of these data for access to obstetrical care. To this end, it consulted extensively with experts in the fields and commissioned sev- eral studies to determine the effects of insurance costs and liability concerns on the practice patterns of the three kinds of obstetrical pro- viders covered in this report. OBSTETRICIAN GYNECOLOGISTS The average cost of professional liability insurance for an obstetri- cian-gynecologist was $37,015 in 1987. Fifty-seven percent of obstetri- cian-gynecologists reported professional liability expenses of $25,000 or more in 1987, and annual premiums exceeded $100,000 in some large cities (ACOG, 19881. The committee explores these costs fully in Chap ter 6. - Perhaps a better measure of the daily burden of professional liability concerns is the number of obstetricians who have been sued. Seventy percent of obstetricians surveyed by the American College of Obstetri- cians and Gynecologists (ACOG) in 1987 reported that they had been 29:

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36 MEDiC~ PROFESSIONS CITY: VOILE ~ sued at some time in their careers, ranging from 62 percent in the Southeast (excluding Florida) to 80 percent in New York (ACOG, 19881. With these data in mind, the committee sought to determine the effect these costs were having on the supply of obstetrician-gynecologists. Are obstetrician-gynecologists eliminating obstetrical practice? Are they limiting certain types of practice or procedures? Are fewer medical students choosing to become obstetrician-gynecologists? The commit- tee's discussion of these issues is set forth below. Careers in Obstetrics The committee first sought to determine if the cost of malpractice premiums in obstetrics or the general medical-legal climate was deter- ring medical students from selecting obstetrics as a field of practice. Data from the National Resident Matching Program (NRMP) and the Association of American Medical Colleges (AAMC) indicate that be- tween 1981 and 1987 there have been only relatively minor changes in the number of fourth-year medical students selecting any specialty, except general internal medicine. The percentage of fourth-year medical students selecting obstetrical residencies has remained fair- Ty constant over the last six years; however, the absolute number of obstetrical residents has decreased slightly (NRMP, 1987; AAMC, 1981-19871. Data from the AAMC show that between 1981 and 1987 the percent- age of graduating seniors selecting obstetrics has varied between 6.7 and 8.8 percent (AAMC, 1981-1987) (see Table 3.11. According to the NRMP, the percentage of seniors matched to obstetrical residencies between 1978 and 1987 has varied only between 5.6 and 6.5 percent (NRMP, 19871. The percentage of obstetrical positions filled by U.S. graduates has stayed close to 80 percent throughout this period, again well above the national average of between 70 and 73 percent. The percentage of positions filled by non-U.S. graduates stayed below 4 percent between 1978 and 1987, compared with the national average of 5 percent. Between 1985 and 1987, the figure was closer to 2 percent. Concerns About Professional Liability The question of whether professional liability concerns are causing obstetrician-gynecologists to forego obstetrical practice is much more difficult to answer. Although the available data are not nearly as good as the committee had hoped, the committee was able to discern certain important trends. Information comes primarily from surveys done by state and national medical associations. In the course of its deliberations

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EFFECTS ON AVAl~ITY OF OBSTETRiCM PROVIDERS 37 TABLE 3.1 Specialties Chosen by Graduating Seniors, 1981-1987 Graduating Seniors (%) Specialty 1981 1982 1983 1984 1985 1986 1987 Allergy and immunology 0.2 0.1 0.2 0.2 0.2 0.3 0.2 Anesthesiology and critical 4.2 5.0 5.5 6.2 6.6 6.0 6.6 care Dermatology 1.2 0.9 1.2 1.4 1.6 1.8 1.7 Emergency medicine 2.6 2.4 2.7 3.0 3.0 3.5 3.7 Family practice 17.3 18.2 17.7 17.0 15.9 17.0 18.3 Internal medicine 18.6 17.0 16.4 14.3 14.9 13.3 12.1 General 12.7 13.9 12.7 10.4 10.3 8.3 6.8 Subspecialties 5.9 3.1 3.7 3.9 4.6 5.0 5.3 Neurology and child neurology 1.4 1.9 1.6 2.1 2.3 2.6 2.0 Nuclear medicine 0.1 0.0 0.0 0.0 0.0 0.1 0.0 Obstetrics-gynecology and 7.9 8.4 7.9 8.8 7.2 7.2 6.7 subsnecialties Ophthalmology Pathology General pediatrics and sub specialties Physical medicine and rehabilitation Preventive medicine Psychiatry and child psychiatry Radiology and subspecialties General surgery and sub specialtiesa Neurological surgery Orthopedic surgery Otolaryngology Urology No response 3.8 3.9 3.8 3.9 4.0 4.2 2.5 2.7 3.1 2.4 2.1 2.1 8.8 7.5 7.3 7.5 6.3 6.7 0.6 0.6 0.2 4.8 5.3 9.4 0.9 0.2 5.2 0.1 5.0 5.3 6.1 8.4 8.0 0.9 6.5 8.0 0.2 6.0 6.6 8.3 4.1 2.4 6.7 1.6 1.8 0.2 6.4 6.2 8.4 0.2 6.6 6.9 8.5 1.3 1.1 1.1 0.9 1.1 0.9 1.2 6.0 6.9 6.6 6.4 6.6 6.7 5.8 2.0 2.5 2.3 2.3 2.6 2.6 2.4 1.3 1.6 1.8 2.3 2.4 2.1 2.3 0.6 0.2 0.5 0.4 0.6 0.3 0.1 aSubspecialties include critical care, pediatric, plastic, and thoracic surgery. SOURCE: Association of American Medical Colleges, 1981-1987. Questionnaire ad- ministered each year to all graduating seniors, Washington, D.C. The 1987 response rate was 71.4 percent (N= 11,307). the committee reviewed the results of 30 surveys in 23 states, along with 9 national studies. This body of literature focused almost exclusively on physicians' own reports of their decisions to provide obstetrical care. The studies vary enormously in scope, methodology, and rigor. Some are detailed, whereas others are simple, one-page questionnaires devel- oped and analyzed by state medical and obstetrics-gynecology societies. Most of the studies are descriptive and do not include tests for statistical significance. A table summarizing the methodology of each study re- viewed by the committee, discussing the differences among them, and indicating their implications is given in Appendix A.

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38 MEDICS PROFESSIONAL CITY: VOICE ~ Response to Concerns About Liability The committee reviewed the results of the studies that addressed the question of whether professional liability concerns were leading physi- cians and other providers of obstetrical services to curtail or eliminate the obstetrical component of their practices. The imprecise phraseology used by many of these surveys caused some committee members to conclude that the available literature may tend to overstate the impor- tance of professional liability concerns in physicians' decision making. However, the committee was persuaded that, despite their limitations, these surveys indicate a consistent trend: a significant number of obste- trician-gynecologists and family physicians are eliminating obstetrics, reducing care to identifiable high-risk populations, or reducing the overall number of deliveries they perform in response to professional liability concerns (see Appendix B). Elimination of Obstetrical Practice In the companion volume of this report Deborah Lewis-~dema an- alyzes the state survey data that measure the reports of obstetrician- gynecologists eliminating obstetrics in response to professional liability concerns (Lewis-~dema, 19891. The results of her analysis are set forth in Tables 3.2 and 3.3. In every state sizable numbers of physicians report that they are eliminating obstetrics: the range is from 7 to 75 percent, with a median of 25 percent. Since some of these surveys include family practitioners and, in one case, nurse-midwives, results from obstetri- cian-gynecologists were examined separately. The 14 state studies that provided information for obstetrician-gynecologists separately report from 6 to 30 percent discontinuing obstetrics. In the median state constructed from those surveyed, 17 percent of obstetrician-gynecolo- gists reported eliminating obstetrics. ACOG's national membership surveys report lower proportions-12.4 percent in the 1987 survey, up from 9.1 percent in 1983 (ACOG, 1983, 19881. However, the ACOG data confirm the finding that substantial numbers of obstetrician-gynecolo- gists are abandoning obstetrical practice because of professional lia- bility concerns. Whereas the state studies do not generally include information on age, the ACOG surveys indicate that physicians are stopping obstetrical practice at an earlier point in their careers in response to professional liability concerns. In 1985,54 percent of obstetrician-gynecologists not practicing obstetrics had ceased practice before age 55 (ACOG, 19851; in 1987 this had risen to 66.8 percent. Six percent had stopped very early (before age 35), compared with slightly under 3 percent two years before (ACOG, 1985, 1988) (see Table 3.41.

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EFFECTS ON AVAI~ITY OF OBSTETRICS PROVIDERS 39 TABLE 3.2 Studies of Summary Data from Professional Liability and Obstetrics Eliminated Obstetrics ReducedHigh- Reduced Range All Physicians Ob-Gyns Risk Care Volume All Studies No. Studies 33 17 11 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 No. Studies 27 14 8 8 Minimum % 7.00 5.90 16.00 5.80 Maximum % 75.00 30.00 48.70 28.00 Median To 25.00 17.50 24.30 18.50 SOURCE: Lewis-Idema, D.1989. Medical professional liability and access to obstetri- cal care: Is there a crisis? In Medical Professional Liability and the Delivery of Obstetrical Care: Vol. II, An Interdisciplinary Review. Washington, D.C.: National Academy Press. TABLE 3.3 Physicians Reporting Malpractice Issues as a Factor in Their Decision to Change Practice Studies (N= 16) of Studies (N= 13) of Physicians Range All Physicians (do) Who Changed Practice (do) . Minimum 9.10 18.60 Maximum 70.00 99.00 Median 24.15 57.00 . SOURCE: Lewis-Idema, D. 1989. Medical professional liability and access to obstetri- cal care: Is there a crisis? In Medical Professional Liability and the Delivery of Obstetrical Care: Vol. II, An Interdisciplinary Review. Washington, D.C.: National Academy Press. TABLE 3.4 Age at Which Obstetrician Gynecologists Stopped Obstetrical Practice Age 1985 (%) 1987 (%) <35 years 2.8 6.1 35 to44 22.5 23.2 45 to 54 28.9 37.5 SOURCE: American College of Obstetricians and Gynecolo- gists. 1985. Professional Liability Insurance and Its Effect: Report of a Survey of ACOG's Membership. Washington, D.C.; 1988 Pro- fessional Liability and Its Effects: Report of a 1987 Survey of ACOG's Membership. Washington, D.C.

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40 MEDICAL PROFESSIONAL LIABILITY: VOLUME I Reduced Volume of Obstetrical Care Even where obstetrician-gynecologists are not eliminating obstetri- cal practice altogether, they are limiting their practices. ACOG reports that approximately 13 percent of obstetrician-gynecologists reduced the volume of obstetrical care they provided in 1984. However, the commit- tee notes that these surveys neither report the actual changes in aver- age caseload nor quantify the reduced volume of deliveries, making it difficult to evaluate the implications of these reductions. Only eight of the state studies report this practice change, with 6 to 28 percent of physicians saying they were reducing the number of deliveries they perform. The median was 18.5 percent. Reduced Care of High-Risk Women The committee was concerned about the implications of these trends for the delivery of care to high-risk women. The state studies report from 16 to 49 percent of obstetrician-gynecologists reducing service to high- risk women. In the median state, almost one-quarter of obstetrician- gynecologists had reduced or eliminated service to this population. This is similar to the rates reported by ACOG, which found that in 1987, 27 percent of obstetrician-gynecologists had reduced or eliminated high- risk care (ACOG, 1988) (see Table 3.51. Trends Most of the state studies did not cover multiple years in sufficient detail to allow analysis of trends in practice changes. A number of the studies asked about plans to eliminate obstetricians between 16 and 34 percent of respondents indicated they planned to discontinue practice TABLE 3.5 Percentage of Obstetrician Gynecologists' Practice Devoted to High-Risk Care, 1985 and 1987 Percentage 1985 1987 10 or less 1.6 45.4 11 to 20 50.1 26.9 21 or more 48.3 25.6 SOURCE: American College of Obstetricians and Gynecolo- gists. 1985. Professional Liability Insurance and Its Effects: Report of a Survey of ACOG's Membership. Washington, D.C.; 1988. Pro- fessional Liability and Its Effects: Report of a 1987 Survey of ACOG's Membership. Washington, D.C.

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EFFECTS ON AVANT OF OBSTETRICS PROVIDERS 41 within the next few years. Because intentions can change, these re- sponses are more an indicator of concern than of actual practice change. Among the states surveyed, Massachusetts is a major exception. Recal- culation of the reported data shows that during 1984, 3.3 percent of practicing obstetrician-gynecologists dropped obstetrics. During the fol- lowing year, 8 percent stopped practicing obstetrics; and during 1986,14 percent did. ACOG's survey data reveal similar attrition between 1983 and 1985, from 9.3 percent to 12.3 percent. The 1987 survey reports 12.4 percent, no appreciable difference from 1985. This may signal that the trend toward eliminating obstetrical practice is leveling off, but it is too soon to assert this with any degree of certainty. The ACOG data suggest that obstetrician-gynecologists are continuing to reduce care to high-risk women, from 17.7 percent of members in 1983 to 27.1 percent in 1987 (ACOG, 1983, 19881. The state studies tend to show greater change and higher proportions of obstetrician-gynecologists altering their practice of obstetrics than the national ACOG data. This may reflect methodological differences among studies, but it may also reflect real geographic variation in physician behavior. It is logical to expect studies to have been conducted in those states where professional liability issues have been a partic- ularly critical concern. Each of ACOG's studies has shown major regional variations in prac- tice changes. The greatest changes have occurred in Florida, where one- quarter of obstetrician-gynecologists report eliminating obstetrics, about one-third have curtailed care of high-risk women, and a further 15 percent report reducing overall number of deliveries. Apart from Flor- ida, the ACOG data suggest different responses in different parts of the country. District 1 (New England) and District 7 (the area bounded by Texas, Alabama, Kansas, and Missouri) report the highest proportion of physicians dropping obstetrics (approximately 15 percent). The mid- AtIantic, Midwestern, and mountain states report the highest propor- tions curtailing high-risk care (approximately 30 percent), while Dis- trict 2 (New York) and District 7 have the greater number of physicians reducing deliveries. The committee was concerned, as noted above, that the questions used in these surveys tended to overstate the effect of professional liability concerns on obstetrician-gynecologists' decision making. However, in those surveys where the question of motivation was separated from the act of changing obstetrical practice, professional liability issues were consistently cited by more than half the respondents as a major deter- minant in their decision to change their obstetrical practice. For exam- ple, in Georgia in 1986, 55 percent of obstetrician-gynecologists who

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42 MEDICAL PROFESSIONS CITY: VOLUME ~ stopped practicing obstetrics cited professional liability concerns as the sole reason for their decision (Appendix B). The committee believes it is reasonable to conclude that professional liability concerns are increasingly perceived by obstetrician-gynecolo- gists to be a significant factor influencing their decisions to curtail or eliminate obstetrical services and to avoid high-risk patients. For those who may have been considering changing their practice for personal reasons, professional liability concerns may simply be the factor that finally tipped the balance. Although it is impossible to calculate with certainty the number of obstetrician-gynecologists who have left obstet- rics or limited their practice because of professional liability issues, the conclusion that a sizable number are doing so is inescapable. FAMILY PHYSICIANS According to an analysis prepared for the committee by Deborah Lewis-Idema, nearly one-third of all physicians rendering patient care in nonmetropolitan areas of the United States are general and family physicians. Moreover, these physicians account for approximately two- thirds of the private practitioners delivering obstetrical services to rural women (Lewis-Idema, 19883. Accordingly, the committee wanted to determine what effect professional liability concerns were having on family physicians and on the delivery of obstetrical services by them to women in rural areas. Malpractice Insurance Costs Like other providers of obstetrical care, family physicians have been affected by professional liability problems. Insurance costs for family physicians practicing obstetrics are significantly higher than costs for family physicians not practicing obstetrics. The American Academy of Family Physicians reported that the average premium in 1985 for $1 million/$3 million malpractice coverage" with obstetrics was $9,447 compared to $5,300 without obstetrics (AAFP, 1986, 19871. Although the survey covering 1986 had a low response rate, it indicated major premium increases and continuation of the differential- to $11,389 with obstetrics and $6,037 without. In some areas of the country the differential is even greater. For instance, Washington and Alabama iA $! million/$3 million policy is a policy under which an insurer will pay up to $! million on each claim and up to an aggregate of $3 million per year.

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EFFECTS ON AVAlL~ITY OF OBSTETRICM PROVIDERS 43 family physicians pay almost three times as much for coverage that includes obstetrics as for coverage that does not. To be sure, professional liability insurance premiums for family phy- sicians are much lower than they are for obstetrician-gynecologists. This reflects the fact that obstetrics is only one part of the family physician's total practice. The average obstetrician-gynecologist performs four to five times as many deliveries each year as the average family physician, but the family physician experiences the same concerns about profes- sional liability insurance costs and the risk of malpractice litigation as the obstetrician-gynecologist does. For the family physician, the higher costs of coverage for obstetrical practice can pose fairly straightforward economic issues. Is the volume of deliveries provided by the practitioner (and the revenue from those deliveries) sufficient to justify the increased expenditure on professional liability insurance? Unless the physician has a large enough obstetrical practice, the cost of insurance may virtually outweigh revenue. Table 3.6 uses data from Washington State to illustrate the nature of this decision. Family physicians paid $9,000 more for obstetrical cover- age; obstetrician-gynecologists paid an additional $11,000 above pre- miums for gynecology only. The family physician performing 30 deliv- eries a year (the median number) paid $300 per delivery for insurance. TABLE 3.6 Estimated Additional Malpractice Premium Cost Per Delivery, Family Physicians and Obstetrician-Gynecologists in Washington State, 1986 Added Cost for Deliveries Malpractice Cost of Insurance Physician (No.) Insurance ($) 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 NOTES: Because no rural obstetrician-gynecologists were identified, data for special- ists in semirural areas were used instead. The authors reported premiums for family physicians practicing obstetrics at $ 13,511; premiums for those not practicing obstetrics or performing surgery were $4,324. For obstetrician-gynecologists, premiums were $33,026 with obstetrics and $21,782 for surgical gynecology without obstetrics. SOURCE: Rosenblatt, R. A., and B. Detering. 1988. Changing patterns of obstetric practice in Washington State. Fam. Med. 20:101-107.

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44 MEDiCM PROFESSIONAL CITY: VOLUME ~ The rural family physician, with a median number of 35 deliveries, paid slightly less, $262. Obstetrician-gynecologists, because of their much larger practices, experienced much lower premium costs per delivery. An obstetrician with the median number of deliveries (121) paid approx- imately $93 per delivery for obstetrical malpractice coverage. Other Economic Factors Other economic factors characteristic of rural medical practice may also affect physicians' decisions. For example, average charges for ser- vices tend to be lower in rural areas. In 1985 a physician's charges for a maternity package, including maternity and newborn care, averaged $834 in rural areas and $977 in urban ones (Lewis-~dema, 19881. In 1980 the National Medical Care Utilization and Expenditures Study found that the charge for a prenatal visit was $27 in nonmetropolitan areas, compared with $48 in metropolitan ones (AG1, 19871. Rural areas also tend to have higher proportions of self-pay deliveries. According to the National Survey of Family Growth, 16 percent of nonmetropolitan area births between 1979 and 1982 were self-pay, compared with approximately 12 percent of metropolitan births (Lewis- Idema,19881. Although the number of no-payment deliveries was much higher in metropolitan areas, no-payment deliveries constituted a higher percentage of deliveries in rural areas. Between 1979 and 1982 nonmetropolitan areas accounted for 23 percent of all deliveries and 46 percent of no-payment deliveries. Finally, family physicians may be serving a higher proportion of no- pay patients than obstetrician-gynecologists. The data on services by specialty and patient payer status are quite limited. The Oregon Medi- cal Association found that 34 percent of family physician deliveries were partial or no-payment because of patients' inability to pay, compared with about 21 percent of obstetrician-gynecologists' deliveries (Oregon Medical Association, 19871. Although these data reflect only one state's experience, the committee believes that the subject deserves further exploration. Concerns About Professional Liability Although insurance costs have been the focus of policy debate, partic- ularly at the state level, risk aversion, or fear of suit, appears to be an equally strong concern among physicians. Physicians report that they find the process of defending a lawsuit against charges of professional incompetence always disruptive and often agonizing. Even cases that

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EFFECTS ON AVAlL~ITY OF OBSTETRICS PROVIDERS 45 are settled or that the physician ultimately wins can have a devastating effect on a physician who must defend his professional skills in court. It is difficult to determine whether family physicians are as concerned about the likelihood of litigation as obstetrician-gynecologists. Accord- ing to the General Accounting Office, family physicians are not experi- encing disproportionate litigation rates compared with other physi- cians. General practitioners and family practitioners each constitute approximately 6 percent of all physicians in the United States, and each accounted for approximately 6 percent of claims closed in 1984 (GAO, 1987b). Unfortunately, the claims data do not allow one to distinguish the proportion of obstetrical claims against family physicians. Actual litigation rates do not necessarily dissipate physicians' con- cern about the possibility of being sued. Family physicians are well aware of the high awards that sometimes result from contested obstetri- cal cases-and the potential impact on their economic well-being of one such decision. In a rural community, concern about the potential effect, both social and economic, of being sued can also be considerable. Al- though family practitioners perform cesarean sections, family practice obstetrics generally centers on low-risk patients. As obstetricians re- duce high-risk care, fewer referral sources are available to a rural practitioner. Furthermore, low-risk obstetrical cases can become high risk, even during delivery, and the family physician may fee! partic- ularly vulnerable to suit in such circumstances. Response to Insurance and Liability Concerns The committee identified 21 state studies and 5 national studies addressing professional liability and family physicians or obstetrical care in rural areas. Appendix C summarizes the study findings. All the physician surveys sought to examine the same question (that is, pro- vider response to professional liability concerns), but methodology and response rates differed. As with the surveys of obstetricians, one of the most important weaknesses in the studies is the manner in which questions were phrased. The key questions regarding changes in prac- tice tended to be imprecise, suggestive, or both. Because of the way the questions were phrased, the importance of professional liability concerns as a determinant of change in physician practice could tee overstated. Fortunately, several of the studies of family physicians, particularly those in Alabama, Ohio, and Washington, pro- vided the respondent a broader range of options for explaining practice changes.

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46 MEDICAL PROFESSIONAL CITY: VOLUME ~ Elimination of Obstetrical Practice Despite their limitations, the studies indicate that a considerable number of family practitioners are dropping obstetrics because of con- cerns about professional liability. The AAFP reported that, at the end of 1985, 23.3 percent of its members had stopped practicing obstetrics because of professional liability concerns (AAFP, 19871. The state studies reported that between 8 and 75 percent of family physicians stopped practicing obstetrics in the last five years. In addition, the AAFP reports that close to 10 percent of its members are reducing their volume of obstetrical care (AAFP, 19861. Further examination of the state studies revealed that the attrition rate among family physicians providing obstetrical care appears to be higher than that among obstetrician-gynecologists. ACOG reports in its most recent study that approximately 12 percent of obstetrician-gyne- cologists have stopped obstetrical practice in response to professional liability concerns, half the rate reported for family physicians by AAFP (ACOG, 19881. The seven state studies that allow specific comparison of changes for family physicians and obstetrician-gynecologists show a similar pattern. In only one (Maryland) was the proportion of family physicians stopping obstetrics lower than the proportion of obstetri- cians. In the others, the proportion was significantly higher (Appendix C). There are several explanations for this phenomenon. One is that, for family physicians concerned about the cost of malpractice insurance, the option of eliminating obstetrics is a more viabIc- and productive- economic alternative than it is for obstetrician-gynecologists. In Ari- zona most obstetricians practicing in rural areas stated that they could not support themselves if their practice did not include obstetrics as well as gynecology. Whereas a family physician could have many reasons for eliminating obstetrical practice in the 1980s, the surveys demonstrate a consistent concern with professional liability issues. Between one-half and three- quarters of family physicians cite the cost of malpractice insurance or the risk of suit, or both, as a significant factor in their decision to discontinue obstetrical practice. In those surveys that separately probed the issue of a physician's motivation for eliminating obstetrics, profes- sional liability issues were cited by more than half of the respondents as the major determinant in their decision. Even those surveys that offered respondents a broad range of possible reasons for eliminating obstetrics demonstrated the primacy of professional liability concerns (Lewis- Idema, 19881.

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EFFECTS ON AVAILABILITY OF OBSTETRICS PROVIDERS 47 Adverse Effects on Rural Areas When family physicians drop obstetrics, women in rural areas are the most severely affected. Not all the studies inquired about geographic variations in practice changes or their impact on delivery of services, but those that did indicated major reductions in obstetrical care in rural areas (Appendix C). For example: In 1986, 17 counties in Georgia had no obstetrical providers; there were only 25 physicians providing care in rural Nevada. One-third of Arizona's family physicians outside of Maricopa and Pima counties (Phoenix and Tucson) had stopped providing obstetrical care by the end of 1985. In Idaho more than one-quarter of obstetrician-gynecologists have stopped providing obstetrics; in West Virginia, another largely rural state, more than half the obstetrician-gynecologists have consid- ered leaving the state. ~ In both California and Oregon the proportion of rural physicians reporting women without access to care was higher than the proportion of urban physicians reporting lack of access. Two-fifths of family physi- cians in rural south Georgia report obstetrical shortages in their area. Although the number of physicians who have stopped obstetrics is higher in Detroit, 69 percent of rural Michigan physicians report access problems, compared with 61 percent in Detroit. A survey of small, 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 hospitals (64 percent) indicated that they would reduce or eliminate their obstet . . rlca services. The implications of the information from state surveys are given further weight by the results of the National Governors' Association (NGA) survey of state Medicaid and Maternal and Child Health (MCH) agencies in late 1987 (NGA, 19881. Eighty-one of the 101 agencies surveyed (80 percent) responded to the questionnaire, and a response was received from at least one agency in every state (but not the District of Columbia). Although the NGA study was designed to assess provider participa- tion issues generally, the results point toward major problems in rural areas. Sixty agencies responded to an open-ended question by indicating geographic areas with significant access problems. Eighty-seven per- cent of these reported that the problem was particularly acute in rural parts of the state. After eliminating duplicative responses for a state, 35 of the 50 states reported participation and access problems in rural areas; only 3 said they had problems in suburban or urban locales.

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48 MEDICO PROFESSIONAL CITY: VOLUME ~ Moreover, in response to an open-ended question, 14 states reported a total of 246 counties with no obstetrical care provider (general practi- tioner, family practitioner, or obstetrician-gynecologist), and 3 reported closure of 42 hospital obstetrical units in the last two years. Twenty-one states reported 484 counties where women receiving care through Medi- caid or MCH programs have limited access to prenatal and delivery services (NGA, 19881. Comparison of the state reports with AMA data on physician distribu- tion suggests that the problem of access to obstetrical care in rural areas may be significant. Whereas the NGA data report that in a survey of 14 states 252 counties are without obstetrical providers, the AMA reports 126 counties in 25 states with no practicing physician at all (AMA, 19871. This suggests that there are a significant number of counties with some physicians but no obstetrical care providers. The data on the implications of professional liability for family physi- cians' provision of obstetrical services are imperfect, but they point in one direction: significant numbers of family practitioners are curtailing or eliminating obstetrical care in response to malpractice concerns. As noted earlier, the importance of professional liability issues, as distinct from personal considerations, can never be precisely known from survey data based on physicians' own reports. Because family physicians are a key component of the rural health care delivery system, these reductions have a disproportionate eject on access to care for women in rural areas. Using data from AAFP and ACOG, an analysis performed by Deborah Lewis-~dema at the request of the committee estimated that the number of obstetrical providers in nonmetropolitan areas has fallen by approximately 20 percent in the last five years (Figure 3.11. Although the available data do not allow one to determine whether these reductions are centered in particular rural locales, the state reports, coupled with the NGA information, indicate that the reductions are widespread. Since public agencies rely on private physicians to render health services, they are likely to be well aware of geographic areas without obstetrical providers. The extent of concern among public agencies indicates that growing numbers of rural commu- nities are experiencing access problems that are exacerbated by profes- sional liability concerns. NURSE-MIDWIVES The number of births attended by nurse-midwives has increased substantially in recent years. In 1985 nurse-midwives attended 2.3 percent of births in hospitals, compared with 1.4 percent in 1980 (Cohn, 19891. Part of this increase may be attributed to the enactment of Public

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EFFECTS ON AVAlL~ITY OF OBSTETRICM PROVIDERS 49 cn In o ._ Cal ._ o a) Q 7 o Prior to Malpractice Crisis [//A Obstetrician ''I Gynecologist ~ Family Practitioner 1-:-:-:-:-] Current FIGURE 3.1 Changes in number of rural physicians practicing obstetrics. Source: Lewis-Idema, D. 1989. Medical professional liability and access to ob- stetrical care: Is there a crisis? In Medical Professional Liability and the Deliv- ery of Obstetrical Care: Vol. II, Interdisciplinary Review. Washington, D.C.: National Academy Press. Law 96-499 on December 5, 1980, which provided for the reimbursement under Medicaid of services furnished by nurse-midwives. The GAO reports that, as of September 1987, all 50 states have a law or regula- tion allowing nurse-midwives to practice, and 44 of them cover nurse-midwife services under their Medicaid programs (GAO, 1987a). The proportion of births attended by nurse-midwives varies greatly from state to state. In 1985 they attended 4 percent of infants born in hospitals in 14 states and the District of Columbia and one-tenth of 1 percent or less of deliveries in 9 other states. The increasing popularity of freestanding birth centers is also likely to lead to greater reliance on nurse-midwives, who generally stab and ma-nage them. Sometimes these centers serve populations lacking other sources of care, but often they serve clients seeking alternatives to hospital care, with its heavy dependence on technology. Data on free- standing birth centers are currently unavailable. The National Associa- tion of Childbearing Centers is conducting a study of women receiving

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50 MEDICAL PROFESSIONAL STY: VOLUME ~ care at these centers, however, and its results should be available in 1989. Availability and Costs of Professional Liability Insurance According to a 1982 survey by the American College of Nurse-Mid- wives, less than 6 percent of its members have ever been sued (ACNM, 19841. Moreover, actuarial analyses of the claims experience of members confirm that the risks of delivery by certified nurse-midwives are not high (Cohn, 19891. Despite these facts, it has been difficult for certified nurse-midwives to obtain professional liability insurance. Until 1984 the ACNM offered a trade association-sponsored profes- sional liability insurance policy, which insured as many as 2,400 of its members. On cancellation of that policy by the carrier, the ACNM managed to find another carrier for approximately one year. In July 1985, however, the second carrier canceled its policies and became insol- vent, leaving ACNM members without an insurer. In July 1986, after approximately one year without a trade association-sponsored profes- sional liability insurance policy, the ACNM membership was offered a commercial policy by a consortium of insurers led by CNA Insurance Company. The consortium offers a $1 million per cIaimI$1 million an- nual aggregate policy, with a mature premium of approximately $6,000 per year. In contrast to physicians' professional liability policies, the premiums do not vary from state to state or by the number of deliveries performed (Cohn, 19891. Data from a recent survey of approximately 300 nurse-midwives indicate that the average insurance premium of $4,000 represents close to 14 percent of a nurse-midwife's gross income; obstetricians pay ap- proximately 10 percent of their gross income on professional liability insurance (ACOG, 19881. Sixty-four percent ofthe nurse-midwives sam- pled were working full-time, 21 percent part-time. For 78 percent of them, their employer paid the insurance premium; 16percent paid their own malpractice premium, and 6 percent split the premium with their employer. The study noted that, although professional liability insur- ance premiums for nurse-midwives had risen 114 percent during the preceding year, nurse-midwifery fees had risen 18 percent and nurse- midwives' income had risen 7 percent (Patch and Holaday, 19881. Response to Insurance Problems Data available to the committee indicate that the problems associated with the rising cost and diminished availability of professional liability insurance have changed the organization of nurse-midwifery practice,

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EFFECTS ON AVAl~ITY OF OBSTETRICS PROVIDERS 51 changed the ways in which nurse-midwives practice their profession, and curtailed opportunities for nurse-midwives. Changes in Practice Setting The difficulties of obtaining professional liability insurance in many states have made it virtually impossible for nurse-midwives to practice other than as the employees of physicians. Many nurse-midwives would prefer to form their own practices and to employ physicians as consul- tants for high-risk or complicated deliveries. Without available insur- ance. however. this practice pattern. which affords maximum profes ~ ~ -- - - - 7 ~ signal autonomy, while not illegal, is practically impossible. The availability of medical liability insurance has also affected birth centers, which represent an innovation in obstetrical care that is favored by nurse-midwives.-These centers were significantly affected by the loss of the ACNM master policy. The Childbearing Center (CBC) in New York City is one such center, whose plight has been brought to the attention of the committee by Ruth Watson Lubic, the director of its parent organization, the Maternity Center Association. The CBC is a New York State-licensed freestanding facility that provides comprehen- sive maternity care to families anticipating a normal childbirth. It does so at less than 40 percent of the cost of in-hospital normal childbirth, according to Empire State Blue Cross-Blue Shield. For 8 of the 10 years of its existence, the CBC was covered by the Medical Malpractice Insurance Association (MMIA), the joint under- writers association in New York State. MMIA, by legislative mandate, must insure any licensed physician in New York State who cannot otherwise get coverage. In late spring 1985, when the ACNM lost its policy, New York State nurse-midwives went to Albany to persuade the legislature to mandate their coverage by the MMIA. At that time the MMIA proposed annual premiums of $72,300 for nurse-midwives at- tending a birth without a doctor on the premises-a figure approx- imately two and one-half times the gross earnings of the average nurse- midwife. The nurse-midwives were told that these rates were based on recommendations supplied by actuarial consultants reflecting the high claims experience of New York State obstetricians. According to statis- tics compiled by the National Association of Childbearing Centers, there have been only 12 suits against birth centers nationwide, with a total payment to date of $112,511. The historically low claims experience of nurse-midwives was apparently not used as the basis for the proposed rates. The current insurance situation has also presented difficulties for nurse-midwives who want to practice in hospitals. Hospitals generally

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52 MEDICO PROFESSIONAL A: VOGUE ~ require proof that their nonemployee professional and medical staffs carry professional liability insurance and often specify a $1 million/$3 million policy as a minimum amount. Because the ACNM does not offer professional liability insurance in excess of $1 million/$1 million, nurse- midwives are often denied hospital privileges. Many carriers who insure obstetricians have placed surcharges on premiums of obstetricians who employ or work with nurse-midwives. This, too, has curtailed the availability of nurse-midwifery services to patients. ACOG data indicate that 47 percent of obstetricians who employed nurse-midwives in 1987 had had professional liability sur- charges imposed (ACOG, 19881. Changes in Techniques of Prc~ct~ce Finally, available data also indicate that the professional liability climate is affecting the techniques of practice of nurse-midwives. Twenty-one percent stated that they were ordering more diagnostic ultrasounds, 20 percent were doing more nonstress testing, 19 percent were doing more laboratory testing, and 16 percent were doing more electronic fetal monitoring. Thirteen percent of the nurse-midwives responding to this survey indicated that they were giving up nurse- midwifery practice. Thirty-four percent cited the increased cost of cover- age and 65 percent the decreased amount of coverage. More than 30 percent ofthe nurse-midwives indicated that there were fewerjob oppor- tunities for them than there had been before the costs of insurance rose and coverage decreased (Patch and Holaday, 19881. REFERENCES Alan Guttmacher Institute (AGI). 1987. The Financing of Maternity Care in the United States. New York. American Academy of Family Physicians (AAFP). 1986. The Family Physician and Obstetrics: A Professional Liability Study. Kansas City, Mo. American Academy of Family Physicians (AAFP). 1987. Family Physicians and Obstet- rics: A Professional Liability Study. Kansas City, Mo. Association of American Medical Colleges (AAMC). 1981-1987. Medical Student Gradua- tion Questionnaire. Washington, D.C. American College of Nurse-Midwives (ACNM). 1984. Nurse-Midwifery in the United States, 1982. Washington, D.C. American College of Obstetricians and Gynecologists (ACOG). 1983. Professional Lia- bility Insurance and Its Effects: Report of a Survey of ACOG's Membership. Washing- ton, D.C. American College of Obstetricians and Gynecologists (ACOG). 1985. Professional Lia- bility Insurance and Its Effects: Report of a Survey of ACOG's Membership. Washing- ton, D.C.

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EFFECTS ON AVAlL~ITY OF OBSTETRiC~ PROVIDERS 53 American College of Obstetricians and Gynecologists (ACOG). 1988. Professional Lia- bility Insurance and Its Effects: Report of a 1987 Survey of ACOG's Membership. Washington, D.C. American Medical Association (AMA). 1987. Physician Characteristics and Distribution in the U.S. Chicago. Association of American Medical Colleges (AAMC).1981-1987. Medical Student Gradua- tion Questionnaire. Washington, D.C. California Medical Association (CMA). 1987. Professional liability issues in obstetrical practice. Socioecon. Rep. 25, Nos. 6 and 7. Cohn, S. D.1989. Professional liability insurance and nurse-midwifery practice. In Medi- cal Professional Liability and the Delivery of Obstetrical Care: Vol. II, An Inter- disciplinary Review. Washington, D.C.: National Academy Press. General Accounting Office (GAO), U.S. Congress. 1987a. Medicaid: Use of Certified Nurse-Midwives. GAO/HRD-88-25. Gaithersburg, Md. General Accounting Office (GAO), U.S. Congress. 1987b. Medical Malpractice: Charac- teristics of Claims Closed in 1984. GAO/HRD-87-55. Gaithersburg, Md. Lewis-Idema, D. 1988. Professional liability issues affecting family practitioners and delivery of obstetrical services in rural areas. Paper prepared for the Institute of Medicine. Washington, D.C. Lewis-Idema, D.1989. Medical professional liability and access to obstetrical care: Is there a crisis? In Medical Professional Liability and the Delivery of Obstetrical Care: Vol. II, An Interdisciplinary Review. Washington, D.C.: National Academy Press. 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 (NGA), Center for Policy Research, Health Policy Studies. 1988. Increasing Provider Participation: Strategies for Improving State Perinatal Care Programs. Washington, D.C. National Resident Matching Program (NRMP). 1987. NRMP Data. Evanston, Ill. Oregon Medical Association. 1987. The Impact of Malpractice Issues on Patient Care: Declining Availability of Obstetrical Services in Oregon. Portland. Patch, F. B., and S. Holaday.1988. Effects of changes in professional liability insurance on certified nurse-midwives. Paper presented at the 33rd ACNM annual convention re- search forum. Detroit.