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OCR for page 54
4
The Impact of Medical Professional
Liability on the Provision of
Obstetrical Care to Poor Women
and Women Served by Medicaid
r or low-income patients, who al-
ready confront more barriers to health care than other Americans, the
impact of professional liability concerns on obstetrical care is partic-
ularly acute. In a 1986 study the Robert Wood Johnson Foundation
found that access to medical care among the nation's poor, minority, and
uninsured citizens has deteriorated (Robert Wood Johnson Foundation,
19871. Moreover, the study concluded that the improvements it had
noted in its 1982 survey have been reversed, despite a nationwide
expansion in the number of medical care providers.
Inadequate financing has always been one of the most significant
barriers to obstetrical care for low-income women in the United States.
Expansions of Medicaid eligibility enacted in 1986 under the Omnibus
Budget Reconciliation Act should improve financial access. As of April
1988,32 states had taken advantage of them (Lewis-~dema, 19881. The
committee notes, however, that there will always be some physicians
who are unwilling to care for poor patients, regardless of the level of
reimbursement.
The apparent changes in obstetrical practice due to professional lia-
bility issues have led to increasing concern that the potential of the new
Medicaid coverage options will not tee fully realized. If physicians reduce
participation in Medicaid and other publicly funded program~or stop
providing obstetrical services altogether access to care for the popula-
tion most in need will be jeopardized.
54
OCR for page 55
IMPACT ON POOR WOMEN AND WOMEN SERVED BY MEDICAID 55
PROFESSIONAL LIABILITY AND OBSTETRICAL CARE
UNDER MEDICAID
As part of its fact-finding activities, the committee examined the
relationship of professional liability issues, physician participation in
Medicaid, and low-income women's access to care. It attempted to deter-
mine whether the concerns of many persons who have examined the
relationship are well founded and, if so, how the problems it poses might
be addressed. The committee recognizes that professional liability is-
sues are only one of many factors affecting access to obstetrical services
for low-income women. Moreover, although the committee focused on
professional liability issues, it urges that efforts to address the declining
availability to obstetrical care should not be limited to improving the
professional liability system.
Studies directly addressing the question of whether professional lia-
bility concerns are inhibiting physician participation in Medicaid are
extremely limited. The literature on professional liability has centered
on insurance costs and the effectiveness of various tort reforms. Most of
the studies on Medicaid participation were published prior to the cur-
rent medical professional liability insurance crisis. Examining the rela-
tionship between professional liability concerns and access to obstetrical
care for Medicaid recipients, therefore, is much like assembling a mo-
saic. In its effort to put together a picture of the situation, the committee
examined 30 state studies and 9 national ones conducted principally by
state and national medical associations (see Appendixes A and D). It
also included consultant studies, research conducted for the National
Governors' Association, and university-based research. Below are the
committee's findings.
BACKGROUND: THE ROLE OF MEDICAID IN THE
DELIVERY OF OBSTETRICAL CARE
Medicaid is a federal-state program under which the federal govern-
ment sets basic standards and provides matching funds and the states
establish eligibility, benefits, and reimbursement. Since its enactment
in 1965, the program has played a critical role in providing financial
access to obstetrical services for low-income women. Between 1979 and
1982, Medicaid paid for an estimated 10 percent of all births in the
United States (AG1, 19871. In 1984-1985, Medicaid recipients ac-
counted for almost 15 percent of all births in the United States, from 3.8
percent of births in South Dakota to 25 percent in Michigan. During this
period, the program spent $1.2 billion on these services, an average of
$2,200 per birth (AG1, 19871.
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56 MEDICO PROFESSIONAL CITY: VOLUME ~
Because each state establishes its own program rules (within federal
guidelines), the role of Medicaid varies considerably. Prior to 1986,
eligibility for Medicaid coverage for most beneficiaries was tied to eligi-
bility for the Aid to Families with Dependent Children (AFDC) pro-
gram. A series of reforms since 1986 has severed this link to AFDC and
extended Medicaid coverage to many individuals who are not "cate-
gorically needy," as traditionally defined by Medicaid. As of October
1988, 43 states had programs to provide Medicaid coverage to children
and pregnant women with incomes below 100 percent of the federal
poverty level. The Medicare catastrophic insurance law, enacted in
1988, mandates that by fiscal year 1990 all states extend coverage to
infants and pregnant women with family incomes below 100 percent of
the federal poverty level, regardless of AFDC eligibility.
Benefits are determined by both state and federal governments. Fed-
eral law mandates coverage of certain services, including inpatient
hospital care, physician services, and early and periodic screening,
diagnosis, and testing for children. There is a wide range of optional
services, from pharmacy to physical therapy, that states may include in
their programs if they wish.
Reimbursement policy is determined by the state. Since the enact-
ment of Medicare prospective hospital payment in 1983, a number of
states have changed their hospital payment systems to one based on
diagnosis-related groups or some other prospective method. Physician
reimbursement is on a fee-for-service basis, set according to the prevail-
ing charge method, fee schedules, relative value scales, and similar
methodologies.
The increase in births paid for by Medicaid since 1984 is due largely to
the major expansion of Medicaid eligibility that has occurred over the
past several years. Beginning in 1984, Congress enacted staged expan-
sions of coverage for low-income women and children. The 1986 Om-
nibus Budget Reconciliation Act allows states to provide coverage to
children and pregnant women with incomes up to the federal poverty
level. The 1987 act authorized incomes up to 185 percent of the poverty
level.
As of April 1988,32 states had adopted the new option for eligibility
and 22 had begun implementation. All but two states have established
eligibility at 100 percent of the federal poverty level: Rhode Island and
Massachusetts recently increased eligibility to 185 percent.
The law also allows states to simplify and improve the process of
establishing eligibility for Medicaid. States may waive the usual asset
test, an option adopted by 23 states. They may provide for continuous
eligibility, whereby a pregnant woman, once eligible, would not lose
Medicaid during her pregnancy because of fluctuations in income (25
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IMPACT ON POOR WOMEN AND WOMEN SERVED BY MEDICAID 57
states). The presumptive eligibility option allows providers to assume
that a patient is eligible, based on her statement of income, and to
render services for a specified period of time while the Medicaid applica-
tion is being processed (15 states). In addition to expanding existing
coverage, several states have developed new programs to reduce infant
mortality and high-risk births, using Medicaid and Maternal and Child
Health (MCH) agencies as vehicles for financing and delivering ser-
vices.
Physician Participation in Medicaid
Traditionally, a minority of physicians has provided the bulk of ser-
vices to Medicaid patients. In 1976, 5.5 percent of all physicians served
almost one-third of all Medicaid patients (Mitchell and Cromwell, 19801.
Participation among obstetrician-gynecologists has always been low
63.2 percent served Medicaid patients in 1976, compared with 77.4
percent for all physicians (Mitchell and Schurman, 1984~. Only three
identified specialists (allergists, cardiologists, and psychiatrists) had
lower participation rates. Obstetrician-gynecologists who participated
in Medicaid also tended to have lighter caseloads-8.3 percent of pa-
tients were Medicaid recipients, compared with 13.3 percent for other
primary care physicians.
Although national data on physician participation since the
mid-1970s are limited, the situation does not appear to have improved
significantly. The Alan Guttmacher Institute reported that in 1986 40
percent of obstetrician-gynecologists did not serve Medicaidpatients- a
participation rate virtually identical to that 10 years earlier, despite an
overall worsening of the malpractice problem (AG1, 19871.
The primary sources of data on physician participation are the state
Medicaid claims payment systems. These systems are structured to
manage day-to-day claims processing, but for a variety of reasons they
do not provide reliable information for analyzing changes in physician
participation. In most states, for example, physicians are not required to
use unique provider numbers; some have a different number for each
practice location, and in other cases a group of physicians may bill under
a single number. Analysis of responses to a recent National Governors'
Association survey, which attempted to collect data on changes in par-
ticipation, indicates that the combined effect of these problems is to
overstate the number of participating physicians (NGA, 19881.
The reasons for physician nonparticipation are many. Several studies
done in the mid-1970s found that low reimbursement and delays in
paying bills were significant factors reducing participation. In consider-
ing the relationship of professional liability concerns to access to obstet
OCR for page 58
58 MEDICAL PROFESSIONAL LIABILITY: VOLUME I
rical services under Medicaid, two aspects of this literature are signifi-
cant.
First, the studies found that the differential between Medicaid and
private reimbursement was more important than the absolute Medicaid
payment and that reducing the differential increases participation in
Medicaid. Medicaid reimbursements have always tended to be below the
average private charge. In 1986 Medicaid fees were an estimated 44
percent of the average nationwide community charge for obstetrical
care. Over the past couple of years, numerous states have been increas-
ing Medicaid payment rates for obstetrical services-some by as much
as 100 percent. The effect of these increases on physician participation
remains to be seen; however, since private charges have also been rising,
increases in Medicaid reimbursement may have less than the hoped-for
effect in improving participation (Jones and Hamburger, 19761.
Second, an important reimbursement factor that is frequently over-
looked is the practice among obstetrical providers of requiring payment
for services in advance of delivery. Since Medicaid can pay only for
"services rendered," many states have interpreted this provision to
prohibit payment except after delivery. This situation exacerbates the
effects of Tow reimbursement rates.
Reduced Obstetrical Care for the Poor
Nine of the state studies specifically sought information on the provi-
sion of services to Medicaid and low-income women. Although the ques-
tions were different in each study examined, all of them show a sizable
number of physicians reporting that they have reduced, or will reduce,
services to this population because of concerns about potential profes-
sional liability (Appendixes A and B). For example:
· Fifty-five percent of Kentucky physicians do not serve Medicaid
obstetrical patients. The proportion citing professional liability con-
cerns as a reason for not participating was high: three-quarters of
physicians who had reduced their volume of obstetrical care and one-
third of those who had not changed their practice cited professional
liability concerns as a reason for nonparticipation.
· Only one-third of Maryland obstetrician-gynecologists accept Med
. · .
calcl.
· In Texas low-income patients average 10 percent of the obstetrics
caseload. Approximately one-third of obstetrician-gynecologists report
that they are limiting care of indigents "a great deal"; another one-third
are not limiting care.
· In Washington 62 percent of obstetrician-gynecologists limit the
number of Medicaid patients they serve.
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IMPACT ON POOR WOMEN ~ WOMEN SERVED BY MEDICAID 59
· More than half the obstetrician-gynecologists in North Carolina
were providing services in local health departments. Almost 30 percent
reported stopping because of professional liability concerns.
The data reviewed by the committee suggest that there is an increas-
ing trend among obstetricians toward reduction of care for high-risk
patients. Although reduced availability of care for high-risk patients
affects the entire population, it particularly affects low-income women,
who are disproportionately represented among the high-risk group.
These women are more likely to experience higher rates of infant mor-
tality and low birthweight infants.
The National Governors' Association recently surveyed state Medi-
caid and Maternal and Child Health (MCH) agencies regarding pro-
vider participation in public perinatal care programs (NGA, 19881. The
results, which are summarized in Table 4.1, include at least one re-
sponse in every state but not in the District of Columbia. Overall, 60
percent of Medicaid programs and almost 90 percent of MCH programs
are experiencing significant problems in provider participation for ma-
ternity care. Nine of 10 report that rising malpractice insurance costs
have contributed to this problem.
The state agencies, which must rely on physicians to render care to
their clientele, also report significant problems in recruiting and re
TABLE 4.1 Agencies Reporting Selected Changes in Availability of
Obstetrical Care
Maternal and Medicaid
Change Child Health (Jo) (%) All Agencies (%)
Providers dropping obstetrics 97.2 89.5 93.2
Ob-gyns
General family practitioners 88.9 84.2 86.5
Community Health Centers 11.1 7.9 9.5
Ob-gyns not taking new 80.6 86.8 83.8
patients
Physicians reducing 83.3 55.3 68.9
participation
Ob-gyns reducing high- 80.6 55.3 67.6
risk care
Physicians withdrawing from 77.8 44.7 60.8
public programs
Hospitals reducing emergency 11.1 13.2 12.2
delivery
NOTE: N = 74 total agencies; 36 MCH and 38 Medicaid.
SOURCE: National Governors' Association Center for Policy Research, Health Policy
Studies. 1988. Increasing Provider Participation: Strategies for Improving State Perinatal
Care Programs. Washington, D.C.
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60 MEDICAL PROFESSIONAL LIABILITY: VOLUME I
taining participating physicians. In a number of counties, public pro-
gram recipients are experiencing difficulty finding a physician who will
treat them. Although reimbursement rates, traditionally the primary
deterrent to participation, continue to be significant, a sizable number of
physicians cite professional liability issues as a key factor in their
decision not to participate in public programs.
The general reductions in obstetrical practice among obstetricians,
family physicians, and nurse-midwives reported in both state and na-
tional survey data also appear to have a disproportionate effect on the
availability of care for low-income women. Where attrition from practice
has been high, caseloads for the remaining obstetrical providers are
likely to increase, as the experience in Washington suggests. This, in
turn, could create a vicious cycle, whereby providers continuing to
accept Medicaid patients experience greater pressures on their time
possibly to the point where they, too, must begin restricting their Medi-
caid practice. Administrators report many instances of patients travel-
ing long distances-more than 100 mile~for obstetrical care. Many
low-income women have very limited access to transportation.
High Insurance Premiums, Low Reimbursement Rates
The available evidence suggests that physicians' concerns about pro-
fessional liability issues can be divided into two categories the cost of
malpractice insurance and the risk of being sued. The provider surveys
indicate that each is an important factor influencing physicians' deci-
sions.
The rise in malpractice insurance premiums has intensified physi-
cians' traditional concern about low Medicaid reimbursement for ser-
vices. That concern is expressed by providers in two ways. One is that
payments are too low to cover the costs of malpractice coverage. The
other is that, with rising malpractice insurance costs, they must devote
more time to private-paying patients to meet expenses.
Medicaid programs generally pay providers at rates well below those
of private insurers or the average community charge. Table 4.2, pre-
pared by Sara Rosenbaum and Dana Hughes of the Children's Defense
Fund, compares Medicaid reimbursement rates for uncomplicated vagi-
nal deliveries as of September 1987 to the cost of obstetrical premiums,
by state. State Medicaid reimbursement rates were lower than malprac-
tice premiums alone, not counting other overhead costs, in 8 of the 40
states included in the study. In Illinois, Missouri, and New Jersey,
premium costs were more than $240 higher than the Medicaid reim-
bursement rate.
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IMPACT ON POOR WOMEN ~ WOMEN SERVED BY MEDICAID 61
TABLE 4.2 Medical Malpractice Premiums by State for Obstetricians
and Medicaid Reimbursement Rates for Normal Deliveries
State Medicaid Insurance
Payment: Normal Premium Per
State Delivery ($) Deliverya ($)
Alabama 450.00 430.56
Alaska NA NA
Arizona NA 625.00
Arkansas 546.25 131.94
California 657.00 736.11
Colorado 510.00 388.89
Connecticut 861.30 NA
Delaware 519.00 347.22
District of Columbia 775.00 461.00
Florida 800.00 NA
Georgia 800.00 312.50
Hawaii NA NA
Idaho 450.00 527.78
Illinois 446.50 708.33
Indiana 533.00 145.83
Iowa 690.00 409.72
Kansas 750.00 201.39
Kentucky 370.00 305.56
Louisiana 445.56 527.78
Maine 500.00 347.22
Maryland 963.00 506.94
Massachusetts 1471.00 NA
Michigan 403.02 NA
Minnesota 455.00 326.39
Mississippi 623.60 430.56
Missouri 425.00 666.67
Montana 619.00 423.61
Nebraska 478.00 138.89
Nevada 708.57 666.67
New Hampshire 450.00 NA
New Jersey 236.00 527.78
New Mexico 354.79 NA
New York 550.00 NA
North Carolina 409.00 138.89
North Dakota 295.00 319.44
Ohio 386.00 569.44
Oklahoma 750.00 298.61
Oregon 853.24 625.00
Pennsylvania 437.00 222.00
Rhode Island 750.00 NA
South Carolina 485.00 152.78
South Dakota 325.00 201.39
Tennessee 725.00 201.39
Texas 686.50 181.00
Utah 518.71 500.00
(continues)
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62 MEDICAL P~FESSiON~ CITY: VOLUME ~
TABLE 4.2 Medical Malpractice Premiums by State for Obstetricians
and Medicaid Reimbursement Rates for Normal Deliveries
continued
State Medicaid Insurance
Payment: Normal Premium Per
State Delivery ($) Deliverya ($)
Vermont 350.00 250.00
Virginia 625.00 205.00
Washington 600.00 513.89
West Virginia 600.00 305.56
Wisconsin 590.22 229.17
Wyoming 787.50 458.33
aThese are St. Paul Fire and Marine Insurance Company estimates of 1987 medical
malpractice premiums for obstetricians. The per-delivery premium costs included are
based on the company's estimated average obstetrical workload of three deliveries per
week and working 48 weeks a year. The validity of these estimates and their gener-
alizability are not known.
SOURCE: Hughes, D., and S. Rosenbaum. 1988. Children's Defense Fund. Washing-
ton, D.C.
Additional data from 36 states show that Medicaid payments aver-
aged 44 percent of the approximate community charge for prenatal care
and routine delivery. The highest state paid 76 percent, the lowest 14.8
percent. In many cases these rates represent major increases over prior
years, since at least 20 states increased payments between 1984 and
1986 (NGA, 1988).
The problem of low reimbursement rates is complex, reflecting pres-
sures on state budgets, competition among provider types for improved
coverage and payment, and general state philosophies regarding Medi-
caid. Many ofthe stases that are adopting the coverage options under the
Omnibus Budget Reconciliation Act of 1986 or otherwise developing
targeted programs for children and pregnant women are also examining
their reimbursement policies. In addition to fee increases per se, some
states are restructuring their payment schedules to encourage provider
participation and to provide higher reimbursement for care of high-risk
women. However, due to the complexity of the problem and to providers'
professional liability concerns, many program administrators believe
that increasing reimbursement levels may only help to stabilize physi-
cian participation in their programs, not necessarily increase it.
The states are likely to continue increasing their reimbursement
rates for obstetrical providers. Analysis of changes enacted for
1987-1988 showed that nine states were adopting rate increases that
averaged 33 percent and two were more than doubling their fees. Be-
cause of the Tow reimbursement rates that preceded these increases,
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IMPACT ON POOR WOMEN ~ WORN SERVED BY ~DiC~D ~
however, some of the states will still be paying providers less than half
the approximate community charge.
Fear of Suit
Although medical malpractice insurance costs have been the focus of
policy debate, particularly at the state level, it is the committee's im-
pression that subjective evaluations of professional liability risk, or the
sheer fear of suit, appear to be an equally strong factor deterring physi-
cians from serving low-income women. Given the fact that at least 7 of
10 obstetrician-gynecologists are likely to be sued in the course of their
professional lives (ACOG, 1988), the desire to avoid situations perceived
as risky is understandable.
Most observers believe that physicians' fear of suit may be as great a
barrier to obstetrical care for low-income women as the rate of reim-
bursement. The committee heard numerous anecdotal reports that phy-
sicians perceive reducing care to Medicaid and low-income women as an
effective means of reducing their exposure to high-risk patients. Partic-
ularly with new patients, where the likelihood of a problem pregnancy
may be less clear, physicians may screen out poorer women because of
their greater potential to develop high-risk pregnancies. There are no
reliable data on this point.
Physicians are also concerned about continuity of care and risk man-
agement. Many low-income women receive prenatal care at a local
health department clinic and deliver at the local hospital. In such cases,
physicians may believe themselves to be in greater legal jeopardy if
problems develop during the delivery. Moreover, managing high-risk
pregnancies requires a commitment to continuity on the part of both
patient and physician. If the physician believes the patient will not be
committed to the process, the physician may be less willing to initiate
care. It may be easier for the physician to simply stop serving Medicaid
patients entirely 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 caring for low-income
patients. The extent to which low-income women receive late or no
prenatal care and are therefore at greater risk has been well docu-
mented (IOM, 19881. Indeed, such data are at the heart of Medicaid
Expansions and are the focus of such groups as the National Commission
on the Prevention of Infant Mortality (19881. Yet it is precisely this
information that may underlie physicians' sense that care of low-income
and Medicaid patients increases their risk of malpractice litigation.
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64 MEDICAL PROFESSIONAL LIABILITY: VOLUME I
The committee heard many reports that poor women are believed by
physicians to be more likely to sue. A key issue is whether there is
evidence to warrant this suspicion. Despite the perception by many
physicians that the poor sue more, the committee found that available
data do not support this view.
To analysts, the statement that the poor sue more seems counter-
intuitive. The legal literature suggests that the low-income population
generally has less access to the legal system, which would imply less
frequent rates of medical malpractice litigation. Moreover, medical mal-
practice actions are frequently brought by attorneys on a contingent fee
basis. The effects of this incentive system on access to legal services to
the poor has not been well documented, but many theorists surmise that
because medical malpractice awards are usually based on lost earnings,
among other things, attorneys should have less financial incentive to
serve poor plaintiffs.
The data currently available provide very limited information on the
relation of income to medical malpractice suits. The 1973 Commission
on Medical Malpractice of the Department of Health, Education, and
Welfare found that greater numbers of"negative medical incidents"
were associated with higher incomes (the study did not examine claims
rates) (USDHEW, 19731. A study in Cook County, Illinois, in the 1970s
found that black plaintiffs constituted almost 25 percent of the county's
population but accounted for only 11 percent of malpractice suits (Na-
tional Health Law Program, 19871. A 1986 study by Weissman and
colleagues also found a negative relationship between care of minority
patients and a physician's likelihood of being sued (Weisman et al.,
19881.
Five studies were found that examined Medicaid and malpractice
litigation specifically.
· Studies of closed claims from malpractice insurers done by the
General Accounting Office (1987) and in the state of Maryland (1987)
showed that Medicaid recipients brought suit in roughly the same pro-
portion as their numbers in the population (GAO, 1987; Weisman et al.,
19881. The GAO analyzed a sample of all claims: 5.8 percent were
brought by Medicaid patients, who accounted for approximately 9 per-
cent of the population. In Maryland, Medicaid recipients accounted for
about 13 percent of obstetrics-gynecology claims between 1977 and
1985. In 1986, Medicaid recipients constituted about 19 percent of ob-
stetrical admissions to Maryland hospitals. The GAO study also found
that Medicaid recipients received lower settlements. Average expected
payout for a Medicaid plaintiff was about $52,000, and the average for
the privately insured was about $250,000.
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IMPACT ON POOR WORN ~ WOMEN SERVED BY ~DIC~D 65
· Two surveys of providers did find higher rates of litigation among
Medicaid patients. Respondents in the 1986 Washington survey of phy-
sicians said that 26 percent of their reported malpractice suits had been
initiated by Medicaid recipients, whereas Medicaid patients accounted
for only 17.6 percent of their practice (University of Washington, 1986~.
ACOG recently reported on a nationwide survey of hospitals' malprac-
tice claims in 1982 (ACOG, 19881. The hospitals reported that Medicaid
patients represented 17.1 percent of deliveries but initiated 24.8 percent
of malpractice claims. (This finding was not statistically significant.)
· In Danzon's studies on the electiveness of tort reforms no relation-
ship was found between the unemployment rate in a state and frequency
of malpractice claims (Danzon, 1982, 19861. Neither Danzon nor Sloan
found a relationship between medical malpractice claims and state per
capita income (Danzon, 1982, 1986; Sloan, 19851.
Professional Liability Concerns and the Reduction of Care
Every study identified by the committee that examined the relation-
ship of professional liability concerns to participation in Medicaid found
that physicians report reducing their Medicaid caseloads, at least in
part, because of professional liability concerns. Although the committee
concluded that the causal relationships between professional liability
issues, changes in obstetrical practice, and access to care for low-income
women cannot be precisely documented, the mere perception among
physicians that Tow-income women pose professional liability problems
constitutes a barrier to care.
PROFESSIONAL LIABILITY AND OBSTETRICAL CARE
IN COMMUNITY AND MIGRANT HEALTH CENTERS
Because health centers are a vital source of obstetrical care for low-
income women, the committee decided early in its deliberations to
commission a survey ofthe effects of medical professional liability on the
delivery of care in these centers. A questionnaire was sent to a random
sample of 208 Community and Migrant Health Center directors during
April and May 1988. The response rate to this survey was low (25
percent) and was unevenly distributed. The methodology of this study
and the sampling techniques used, as well as a full report of the results,
are presented in detail in the companion volume of this report (Hughes
et al., 19891.
Despite the relatively low response rate, the results of this survey are
revealing. The vast majority of health centers reported that professional
liability concerns either directly or indirectly affected the provision of
OCR for page 66
66 MEDiC~ PROFESSIONAL I: VOILE ~
maternity care. Sixty-seven percent of the respondents indicated that
professional liability concerns affected their ability to furnish obstetri-
cal services or the scope of services they could offer. Only 33 percent
reported that they were unaffected (Tables 4.3 and 4.41.
It should be noted that there appears to be little direct relationship
between the rapid escalation of professional liability insurance pre-
mium costs and the centers' malpractice claims profiles. Only eight (14
percent) of the centers in the study had ever had a claim filed against
_, ~t
Respondents (No.)
~Malpractice Malpractice Did
Public Health Posed Not Pose
Service Region Total Problems Problems
I (Me., Vt., N.H.,
Mass., Conn.,
R.I.)
II (N.Y., N.J.)a
III (Pa., Va., W.Va.,
Md., Del., D.C.)
IV (Ky., Tenn.,
N.C., Miss.,
Ala., Gal, S.C.,
Fla.)
V (Minn., Wis.,
Mich., Ill., Ind.,
Ohio)
VI (N.M., Tex.,
Okla., Ark.,
La.)
VII (Neb., Iowa,
Kans., Mo.) 2
VIII (Mont., N.D.,
S.D., Wyo.,
Utah, Colo.)
IX (Calif., Nev.,
Ariz., Hawaii)b
X (Wash., Ore.,
Idaho, Alaska)
Unknown
Total
5 4 1
3 0 3
4 3 1
17 12 5
6 5
9 4 5
6 5
1
2
58
o
2
39 19
aExcludes Puerto Rico and the U.S. Virgin Islands.
bExcludes Guam and American Samoa.
SOURCE: Hughes, D., S. Rosenbaum, D. Smith, and C. Fader.
1989. In Medical Professional Liability and the Delivery of Obstet-
rical Care: Vol. II, An Interdisciplinary Review. Washington, D.C.:
National Academy Press.
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IMPACT ON POOR WORN ~ WOMEN SERVED BY MEDICAID 67
TABLE 4.4 Adverse Effects of Malpractice Costs,
988
Respondents (N= 58)
Effect No. %
Limited number of physicians
under contract 19 33
Hampered recruitment and
retention of physicians 25 43
Limited number of physicians
hired 26 45
Reduced number of maternity
patients seen 26 45
-
SOURCE: Hughes, D., S. Rosenbaum, D. Smith, and C. Fader.
1989. In Medical Professional Liability and the Delivery of Obstet-
rical Care: Vol. II, An Interdisciplinary Review. Washington, D.C.:
National Academy Press.
them. Although centers with more claims might not have responded to
the survey, other studies confirm that physicians practicing in health
centers have relatively low (16 percent) claims profiles (National Asso-
ciation of Community Health Centers, 19861.
The Department of Health and Human Services estimates that in
fiscal year 1989 approximately $50 million of the $446 million health
center appropriation will be spent on medical professional liability
insurance coverage for staff (unpublished data, Provider Profile 1988,
Bureau of Community Health, Delivery, and Assistance, USDHHS).
Much of this cost will be attributable to obstetrical activities. Thus, the
centers' $30 million professional liability insurance expenditure repre-
sents 7 percent of their total budget.
Professional liability concerns affected health centers in two major
ways: (1) by reducing their capacity to furnish or purchase maternity
care and (2) by forcing some of them, as a result of certain insurance
underwriting practices, to furnish care that might ultimately place
them at greater risk of malpractice liability. The net effect was to curtail
access to obstetrical care for low-income women and, in some areas, to
force centers to make practice decisions based on the requirements of
insurance carriers rather than standards of medical practice.
Problems Recruiting Providers
Particularly conspicuous were the recruitment problems caused by
professional liability concerns. The rising cost of medical malpractice
insurance has cut deeply into the resources available for compensating
providers. Many centers are unable to offer all aspects of perinatal care
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68 MEDICO PROFESSIONS ARTY: VOGUE ~
and are unable to put together a financial package adequate to retain
staff once recruited. Twenty-four percent of the 52 centers that furnish
maternity care reported that the high cost of medical malpractice insur-
ance limited their ability to recruit and retain providers. Some cen-
ters stated that the premium rates demanded for obstetrical providers
were simply unaffordable. For other centers, high medical profes-
sional liability insurance costs cut so deeply into their total compen-
sation package that they could not offer competitive salaries and
benefits.
Problems with Access
The most profound effect of professional liability concerns revealed
through the survey was the impact on access to maternity care. Forty-
three percent of the centers surveyed indicated that they were forced to
"turn patients away" because they were understaffed and unable to
recruit or contract with enough maternity care providers. Either they
could not adore the additional costs associated with treating these
patients or they could find no contract providers willing to affiliate with
them. Most of these centers were able to serve some of the patients who
sought care but were forced to deny care to others (Table 4.51.
Centers indicated that patients who could not be served were gener-
ally given suggestions about where else they might obtain care. Some
TABLE 4.5 Maternity Patients Not Being Served
or Referred, 1987
Respondents
No. %
Center's Action
Some prenatal patients turned
away
All prenatal patients turned
away
Patients not provided or re-
ferred elsewhere for delivery
services
Able to serve all patients
Total
17
3
5
33
58
in
29
5
9
57
100
aIn all, six centers reported furnishing no obstetrical care. In-
cluded here are only those centers that provide no obstetrical care
and appeared to have no established referral system for patients
they could not serve.
SOURCE: Hughes, D., S. Rosenbaum, D. Smith, and C. Fader.
1989. In Medical Professional Liability and the Delivery of Obstet-
rical Care: Vol. II, An Interdisciplinary Review. Washington, D.C.:
National Academy Press.
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IMPACT ON POOR WOMEN ~ WORN SERVED BY MEDICS 69
centers were unable to establish even informal referral arrangements
with other providers, however, either because private providers would
not take the patients or because there were no alternative providers at
all. One center indicated that there were no community doctors in the
area who would accept Medicaid reimbursement. Another reported that
patients with insurance were sent to the nearest obstetrician, 45 miles
away; those without insurance were sent to the university hospital, 65
miles away.
Six responding centers were unable to provide care to any pregnant
patient because they could neither provide care on site nor contract with
other providers. (Three of these centers used informal referral networks
to suggest where pregnant patients might go but had no formal contrac-
tual system; the remaining three indicated that no such networks
existed.) Ofthese six centers, five cited the high cost of providing obstet-
rical care, including rising medical malpractice insurance premiums, as
the major reason for not offering maternity care. One center put it
bluntly: "We are unable to provide on-site or contract off-site prenatal
care and delivery services because of the high cost of medical malprac-
tice insurance. As a result, the center is offering none ofthese services."
Five of the 52 centers furnishing maternity care reported that they
were forced to discontinue care of women at the time of delivery because
the family doctors or midwives on staff could not perform deliveries and
could not identify community physicians to whom they could refer
patients, either formally or informally. The patients were virtually on
their own in locating delivery care. One center reported that it was
forced to send all patients-nearly 700 a year- to the local hospital
emergency room for deliveries. Another referred patients to the county
hospital for deliveries.
Some centers reported that their own providers were prohibited from
delivering babies, either because their malpractice insurance policies
prohibited it or because local hospitals allowed only obstetricians to
perform deliveries. In turn, fear of malpractice suits and the rising costs
of insurance were cited as the primary reasons for the community
obstetricians' unwillingness to contract with the centers or to accept
referrals. One center wrote, "Only one in three obstetricians in the
community does obstetrics (at all) because of the high cost of malprac-
tice. And family doctors do not do obstetrics because of lack of obstetrical
backup."
Reduced Quality of Care and Increased Risk of Suit
The survey revealed that, although the most important consequence
of the high cost of professional liability insurance for obstetrical pro
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70 MEDICO PROFESSIONAL PITY: VOGUE ~
viders was to reduce the availability of services at health centers, it also
had the ironic, and certainly unexpected, effect of reducing the quality of
care centers furnished and, in some cases, of increasing their potential
exposure to malpractice claims. This has occurred in two ways. First,
family doctors and nurse-midwives were forced into the medically un-
sound practice of discontinuing care for patients at the time of delivery
because they were unable to obtain community backup or referral for
them.
Second, some centers reported that they were forced to replace experi-
enced doctors with new graduates because of the escalating malpractice
premium costs for experienced physicians. Insurers base this practice on
the theory of"accumulated exposure," that is, that the risk of being sued
increases over time. Thus, patients in health centers are deprived of the
most experienced physicians as a means of avoiding higher malpractice
insurance costs.
As a matter of economy, most health centers with maternity care
providers on staff employ family doctors rasher then obstetricians. One-
third of the centers reported that they were staffed with family practi-
tioners who furnished prenatal care. However, as indicated above, a
number of centers also reported that the vast majority of these physi-
cians were not permitted to deliver babies because of insurance or
hospital credentialing limitations. Family practice staff delivered
babies in only 6 percent of the centers.
When family doctors and other providers have strong referral net-
works for delivery, this arrangement is not necessarily troublesome. As
noted, however, many centers in the survey reported that they were
unable to develop backup or referral arrangements, and the family
doctors and nurse-midwives were placed in the untenable position of
having to choose whether to drop a patient at the time of delivery (and
hope that she could make it to the emergency room), deliver a baby
without medical malpractice coverage, or cease furnishing prenatal care
altogether. Terminating care of a patient at the time of delivery not only
places the patient in jeopardy and the physician into an ethical and
liability dilemma, it also creates potential liability for the physician
who ultimately performs the delivery with no prior knowledge of the
patient.
Prohibitive Insurance Costs
The results of the survey suggest that professional liability concerns
have reduced the ability of nearly every center furnishing obstetrical
care to provide or purchase necessary health services for pregnant
women. Many centers with adequate staff have been forced to curtail or
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IMPACT ON POOR WOMEN ~ WOMEN SERVED BY MEDICAID 71
eliminate services because insurers refuse to provide delivery coverage
except at exorbitant costs that clinics cannot adore. Still other health
centers have seen their referral arrangements to specialists disinte-
grate as more and more obstetricians either leave the practice of obstet-
rics altogether or else refuse to treat what they perceive to be high-risk
patients.
CONCLUSION
The committee examined the available data relating to the question of
whether medical professional liability concerns are causing physicians
to reduce obstetrical care to low-income women, including the commis-
sioned survey of Community and Migrant Health Centers. The data are
often imperfect, and much of the relevant evidence is indirect. The
committee is nonetheless persuaded that the effects of professional
liability concerns in obstetrics are being disproportionately experienced
by poor women and women whose obstetrical care is financed by Medi-
caid or provided by Community and Migrant Health Centers.
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Representative terms from entire chapter:
obstetrical care
