Doctors seek ways to cover liability premium shortfalls

As individual physicians try their own solutions, an AMA report examining the idea of charging fees to offset premium costs is expected in December.

By Tanya Albert, AMNews staff. Nov. 22/29, 2004.

Instead of starting at home, charity is starting in the doctor's office in one New Jersey community.

This fall, four internists in Marlboro, N.J., sent a letter to patients with scheduled appointments asking them for a voluntary $25 donation to help the Jersey Shore Associates practice offset surging medical liability insurance rates.

"What surprised me is the patients who donated more than we asked for," said internist Michael Stark, MD, a founding member of the practice, which has been in business for 18 years. "Some said, 'Why didn't you do this before? We think this is a smart idea.' "

About 25% of the 400 patients who received letters responded in the first three weeks, with at least one patient donating $200. A handful of patients were offended. But others in the 15,000-patient practice questioned why they weren't asked to donate, said internist Joseph Romanella, DO, who has been with the practice for seven-plus years.

"Most of the patients are very aware of what is going on with medical liability insurance," he said.

What is going on in New Jersey, like numerous other areas of the country, is that doctors are facing large insurance premium increases and are finding fewer insurers willing to write policies. New Jersey is one of 20 states that the AMA lists as being in the midst of a medical liability crisis that has physicians retiring early, moving to other states or cutting services.

New Jersey doctors have asked lawmakers to pass caps on noneconomic damage awards in medical liability lawsuits, but efforts have been unsuccessful. Physicians believe that caps are a key ingredient in tort reforms needed to help reduce costs. Trial lawyers disagree and say that insurance reforms would have a bigger impact.