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Health cost headache Featured

5:35am EDT January 31, 2002
If your company health care costs are making you sick, maybe you should see your doctor -- 0r at least look at the situation from his or her point of view.

Pennsylvania's principal physicians' organization charges that the state's medical liability insurance rates -- which it says are among the highest in the nation -- are siphoning funds away from investments in medical equipment and staff. High insurance costs are also driving physicians away from some specialties or out of medicine altogether. And some are discontinuing high-risk services like delivering babies to cut their liability insurance costs.

The trend, says the Pennsylvania Medical Society, threatens the delivery of quality health care and threatens to increase costs further.

It doesn't take a brain surgeon to figure out those costs have an impact on health insurance rates and, in turn, on employer costs.

Physicians in Pennsylvania got hit with increases ranging from 21 percent to 60 percent in 2001 and face increases as high as 70 percent in 2002, according to the society. Those kinds of increases, says Dr. Howard Richter, president of the Pennsylvania Medical Society, are threatening the quality of health care.

"The soaring cost of liability insurance may be dragging down the availability of health care in the commonwealth," says Richter.

The medical society reports that 72 percent of doctors it surveyed have deferred buying equipment or hiring staff because of sudden increases in medical liability costs. It blames malpractice case awards by the courts as the principal driver of high liability insurance rates; Richter says combined judgments and settlements in Pennsylvania for fiscal 2000 totaled $353 million, about 10 percent of the total awarded in the entire country.

Richter says some physicians attempt to fend off malpractice claims by ordering additional tests that can increase costs. This practice of defensive medicine costs patients nationwide about $50 billion a year. How to reach: Pennsylvania Medical Society, www.pamedsoc.org