Record-setting jury awards have forced several insurance carriers to bail out of the health care liability market, leaving providers scrambling for new policies and clamoring for tort reform, according to the July 2003 issue of AGD Impact, the newsmagazine of the Academy of General Dentistry (AGD). Though most of these awards—known as non-economic loss or “pain and suffering” awards—are against physicians and hospitals, dentists are indirectly affected. “For dentists it’s a mini-crisis,” says Mark Buczko, vice president of Dentist’s Advantage in Downers Grove, Ill. “I say that because for the past 18 to 24 months major writers for dental liability have pulled out for one reason or another.”
These carriers, which include The St. Paul Companies Inc., Safeco and AIG, say the current tort system and a shaky economy have made staying in the liability market untenable.
Jury Verdict Research, a database of plaintiff and defense verdicts, says awards in medical liability cases increased 43 percent in 1999, from $700,000 to $1,000,000.
During the economic boom years of the mid-1990s, the return on stock investments allowed most carriers to operate on a loss. In a weak economy, the carrier’s investments in the stock market can not “float” payouts. According to the Insurance Information Institute, carriers on average paid out $1.53 for every premium health care liability dollar collected in 2001—and this was despite an 8.7 percent rise in premium rates.
Almost no one in the insurance industry believes dentistry ever will take malpractice hits of the magnitude or frequency of the medical profession. But if a carrier drops its liability business because the cost of covering physicians is too much, that means dentists and other health care providers covered under that company’s polices also lose out. While associations such as the American Dental Association (ADA) say that dentists continue to have a variety of choices in selecting a carrier, current trends suggest that insurers are being much more selective in whom they are willing to cover.
“Based upon phone calls we are receiving from our members, we believe that insurers are generally becoming more selective in the dentists they will insure,” says David Dwyer, director, ADA Council on Insurance. “Dentists who have a history of multiple claims, or even a single claim of high cost, may have more trouble finding a policy than was the case several years ago.”
The federal government has taken several measures to get the balling rolling on malpractice reform, particularly concerning awards for non-economic loss.
In March, the House passed the Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act. The bill includes a $250,000 cap on non-economic damages; allowing successful plaintiffs to recover unlimited economic damages for medical expenses and loss of earnings; ensuring the lion’s share of any jury award goes to the patient by limiting lawyer’s fees on a sliding scale; imposing a three-year statute of limitations for filing a malpractice claim; and imposing proportional liability according to the degree of the defendant’s responsibility.
Caps on non-economic loss awards are not new; more than 20 states have a law on the books. In fact, President Bush’s proposed $250,000 non-economic loss cap and the HEALTH Act are based on a 30-year-old reform law in California.
Many in the dental community believe caps, if given a chance, as well as other meaningful reforms could alleviate the current crisis.
For more information, visit the AGD’s Web site at www.agd.org, and find more about how dentistry is fighting for malpractice reform.
The AGD is a non-profit organization of more than 37,000 general dentists dedicated to staying up-to-date in the profession through continuing education. A general dentist is the primary care provider for patients of all ages and is responsible for the diagnosis, treatment, management and overall coordination of services related to patients’ oral health needs.