BETTER MEDICAL MARKET:

Pennsylvania Governor Edward Rendell said that his state has turned the corner on improving its medical malpractice insurance market thanks in part to recent legislative and court reforms and he urged legislators to continue a premium abatement program for another two years to give the reforms time to take full effect. Rendell cited reduced payouts from the state’s catastrophic malpractice fund Mcare, flattening insurance rates, a leveling off of the number of physicians using Mcare and private insurers’ renewed interest in writing malpractice coverage as among the signs that the market has gotten better. The state’s Mcare program provides insurance for claims above $500,00 for physicians. Claims payouts from the Mcare fund are expected to total $232 million in 2005, a substantial drop from $320 million paid in 2004. In 2003, the total had climbed to $379 million. To cover the costs of Mcare, participating physicians pay a surcharge to Mcare. For 2006, the Mcare surcharge will be reduced by 25 percent.

In terms of availability of insurance, more doctors have formed their own risk retention groups, relieving some of the pressure. One of these groups, the Northeast Physicians Risk Retention Group, now covers physicians in 17 counties. In addition, the state’s largest medical malpractice writer, PMSLIC, has said it will begin to write new business again.

Rendell pressed for continuation of the premium abatement plan, which is meant to encourage physicians to continue practicing in the state. Orthopedic surgeons, neurosurgeons, ob/gyns and other high-risk surgeons had 100 percent of their Mcare payment abated in 2003, 2004 and 2005. All other physicians received 50 percent abatement. The program has cost the state $220 million a year.

“When you look at all these statistics collectively, I think everyone would agree that we’ve started to turn the corner on the medical malpractice problem,” Rendell said. “I expect the legislature will agree with me that, based on the need to maintain our momentum and not revert back to a crisis, that the abatement will be continued.”