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Article written by Clifford A. Rieders, Esquire
The newest report to show “the disappearing medical malpractice case” is the Annual Report of Operations issued March 1, 2011, by the Medical Care Availability and Reduction of Error Fund.
The Mcare Fund insures doctors and hospitals for so-called “excess” claims, which means claims where there is provable medical or hospital negligence, and a relationship between the negligence and harm where the damages exceed $500,000. The Fund is an arm of the Pennsylvania Insurance Department and was created by Act 13 of 2002 signed into law March 20, 2002, although it is a successor to the Medical Professional Liability Catastrophe Loss Fund, known by the acronym CAT Fund.
Each health care provider in Pennsylvania which provides 50% or more of professional health care business or practice within Pennsylvania must obtain primary coverage in the amount of $500,000 or an approved self-insurance plan. Participation in Mcare is mandatory for hospitals, nursing homes, birth centers, and a variety of other health care providers.
The total coverage provided to doctors and hospitals is $500,000 for the primary coverage and $500,000 for the Mcare coverage which totals $1 million. While this is adequate in most cases, it leaves a large gap for the most catastrophic situations.
The CAT Fund was started in 1976 because the market for medical malpractice insurance is so small. While the number of doctors in Pennsylvania has increased steadily since 1976, even while our population has dropped, the market for medical malpractice insurance sales is still much smaller than auto insurance or home insurance. The Mcare Fund was therefore created as a non-profit organization to cover the most serious claims between $500,000 and $1 million.
The Mcare system is a “pay-as-you-go” structure which means that the Fund is not supposed to collect and hold money for future claims, but rather assess doctors and hospitals on a year-to-year basis based upon claims in existence. The Fund must project future claims. Those projections have shown a decline which is so dramatic that the 2011 figures are almost one-half of the 2005 numbers.
For many years the funds spent by the Mcare Fund for catastrophic acts of negligence came from cigarette tax money and the automobile CAT Fund.
The Fund report explains that the decrease in projections of future payouts is based on the following factor; the number of medical malpractice cases in Pennsylvania is significantly lower than it has been in the past. The average statewide decrease in cases filed is approximately 40%, with Philadelphia County experiencing an average decrease of approximately 55% and the remainder of the state experiencing an average decrease of approximately 30%. Almost all the reasons given for the decrease in medical malpractice cases relate to increasing burdens of filing and pursuing claims. Doctors and hospitals can now only be sued in the county where the negligence occurred rather than wherever they do business. Cases cannot be pursued without doctors in the same subspecialty as the doctor who is sued providing a Certificate of Merit. Since doctors do not like to testify against other doctors, this is an extremely high hurdle. Most importantly the report cites “changes in social attitudes toward compensability of medical malpractice.” What this means simply is that people do not want those who are injured or killed by negligence to be compensated. The reason for this change in attitude is that the insurance industry, among others, has been successful with its indoctrination campaign since the mid 80s that too many claims are filed throughout the United States, a fiction which is untrue but has stuck like snow on a cold winter’s day.
What the report does not show is that while the number of doctors per patient has increased in Pennsylvania because of the increase in doctors and the decline in population and while payments to seriously injured patients have dropped, the actual increase in medical errors seems to be at an all time high. The Pennsylvania Patient Safety Authority reported in the latest reporting period that it has received reports of incidents and serious events in the quarter million range. Hospital that flaunt the law and fail to report at all is a significant problem. Yet there are approximately only 1,500 lawsuits in a Commonwealth with 12.5 million people.
So the next time somebody tells you that Pennsylvania is a lawsuit crisis, agree with them. There are too many uncompensated people who cannot receive their day in court in spite of a catastrophe of medical errors.
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