Malpractice Insurance Cuts Into Health Care for Poor
AT first glance, rising medical malpractice insurance costs seems to be a problem only for the doctors who pay the premiums. A closer look, however, reveals that medical malpractice premiums affect everyone's health care, particularly poor and uninsured Americans. Our nation's network of community and migrant health centers provides a dramatic example of how overhead often swallows federal dollars intended to provide health care to the less fortunate. These centers are unable to care for patients without first buying medical malpractice insurance, but kept from fully meeting client health-care needs because much of their budget is spent on this insurance. By allowing these health centers to set up a system of malpractice self-insurance, millions of dollars could be redirected toward helping more poor people receive health care. I recently introduced legislation to do just that.
When Congress created this network of community and migrant health centers in 1966, it hoped to provide high-quality health care to patients who are cut off from medical care due to poverty, disability, or geographic location. Although a combination of federal funds and private grants allows nearly 2,000 clinics to provide health care for 6 million people each year, this still does not meet the need for health services. Today, for each patient treated at a community clinic, four people need medical care but do not get help.
Rising malpractice insurance costs are compounding each center's inability to keep up with the community's rapidly growing needs. Limited funds force centers to perform budget balancing acts that pit health-care delivery against malpractice insurance costs. Last year, these centers spent $58 million for commercial malpractice insurance. More than 50 percent of the money came from the federal government. While the annual insurance premium for an obstetrician averages $37,000, the insurance bill for one d octor was $260,000. If that money had been spent for direct patient care, it could have provided help for 200 to 300 people.
While annual malpractice premiums increased steadily, malpractice claims against center doctors remained the same. Claims against these doctors are actually far lower than average, totaling $5 million to $8 million annually. Although providing malpractice insurance is necessary for the centers, the $58 million now spent on malpractice insurance far exceeds the $5 million to $8 million needed annually to pay malpractice claims. Using the malpractice self-insurance system, insurance costs could be cut in half during the first year. Instead of giving centers money to buy commercial malpractice insurance, Congress would redirect a portion of the community health centers' annual appropriation into a new self-perpetuating, self-insurance fund that would provide full coverage for doctors. In the first year, $30 million of the community health centers' federal appropriation would go into the insurance fund and $25 million the following two years. After three years, the fund would be capitalized at $80 million.
The self-insurance pool would improve patient access, provide malpractice coverage, and save millions of dollars. The $94 million saved in the first three years alone would mean medical help for thousands of people. The centers could immunize more children, insure fewer low-birth-weight babies, and provide more preventative care for those who need help.
Establishing a self-insurance pool would revitalize our community and migrant health centers' ability to help the people most often denied adequate health services. Congress should seize this opportunity to get the most out of every dollar it spends to help the poor get medical care.