Friday, August 3, 2012

OPINION SUBMISSION: Court Decision Could Increase Costs, Reduce Access To Health Services

Herb B. Kuhn
President and CEO
Missouri Hospital Association

On Tuesday, July 31, the Missouri Supreme Court issued a decision in Watts v. Cox that could have implications for every Missourian. The ruling was ostensibly about juries and their responsibilities in determining damages in cases of medical liability. However, the decision could have much broader consequences, including the already difficult ability to find a physician and an increase in health care costs.

In 2002, the Missouri Supreme Court issued a decision essentially eliminating the state’s cap on noneconomic damages in medical malpractice lawsuits. The Scott decision left Missouri’s medical liability insurers without a way to reliably gauge price and risk when issuing liability policies to medical providers. And, without a clear understanding of their exposure, liability insurers had two choices — get out of the marketplace or significantly increase premiums to insulate themselves against the unknown. They did both. As a result, insurance rates skyrocketed, medical practices closed, access to emergency and trauma care suffered, and physicians left the state. 

In response to the ongoing crisis, the Missouri General Assembly crafted a legislative solution in 2005. The linchpin of that effort was a restoration of the environment prior to the Scott decision — single cap for noneconomic damages. As expected, the fix brought stability and clarity to the marketplace, and the cost of medical liability insurance fell precipitously. In fact, Missouri physicians experienced a $27 million decrease in the cost of liability insurance between 2005 and 2010, with a total reduction of $44.5 million for all health care providers combined. Now, in the aftermath of the Watts decision, Missouri has returned to a marketplace without cues for risk or pricing. 

The timing of the Watts decision couldn’t be worse. In 2014, as many as 500,000 Missourians could gain access to health insurance through a health insurance exchange or Medicaid. However, we can’t generate or attract physicians fast enough to meet the demand for care anticipated in 2014 and beyond. The absence of liability caps has, in the past, discouraged physicians from practicing in Missouri — we know that from the state’s experience between 2002 and 2005. This unfortunate new barrier will hurt hospitals’ efforts to recruit and retain physicians and discourage physicians from choosing Missouri as a location to establish their practices. 

What does this mean for the average Missourian? First, it will likely be more difficult for Missourians to find a physician when they need one, especially in the future as many older physicians prepare to retire. Second, the costs associated with uncertainty will result in increased premiums for physicians, and these costs will be passed along to patients. 

On August 2, a coalition of health care, insurance, business and legal organizations sent a letter to Gov. Jay Nixon asking for his help in crafting an appropriate response to the decision. It is our hope that together with the state’s leadership, the coalition can find a resolution that ensures Missourians can continue to access the care they need.

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