Governor Calls For Malpractice Reforms in Penna.

December 27, 2001

Pennsylvania Governor Mark Schweiker called on the General Assembly to adopt strong reforms to curb the skyrocketing costs of medical-malpractice insurance and to address the diminishing availability of insurance. He also sent an open letter to the State’s physicians “affirming his commitment to achieve swift enactment of comprehensive solutions to the problem.”

“While increasing premiums have apparently been felt most acutely in Southeast Pennsylvania, the fact is that the rising cost of malpractice insurance is impacting physicians statewide,” Gov. Schweiker wrote in a letter to Pennsylvania physicians. He expressed his concern that “some physicians are seriously evaluating whether they can continue to afford to practice medicine in Pennsylvania.”

Pennsylvania’s Insurance Commissioner Diane Koken and the State’s Physician General Rob Muscalus have been studying the problem in an attempt to find structural reforms and initiatives “that would make rates affordable and coverage available.”

The governor’s announcement stated that, “Current data reflects that insurance losses for the past year have exceeded premiums for medical-malpractice insurance. In addition, the decline in the stock market also may have negatively affected insurers. These factors have contributed to fewer companies marketing medical-malpractice insurance in the Commonwealth, as well as significantly higher premiums.”

Under applicable law Physicians providing care in the Commonwealth must carry primary professional liability insurance of a minimum of $500,000 per occurrence, and hospitals must carry primary liability insurance at a minimum of $500,000 per occurrence. The Medical Professional Liability Catastrophe Loss Fund (CAT Fund) covers liability from $500,000 to $1.2 million per occurrence and is funded by a surcharge which is a percentage of the premium for primary coverage from the Professional Liability Joint Underwriting Association (JUA).

Muscalus indicated that the cost of the primary layer of insurance “has increased dramatically over the past two years and may have more than doubled for some physicians and hospitals.

Roger F. Mecum, Executive Vice President of the Pennsylvania Medical Society, issued a statement approving Governor Schweiker’s initiative, and pointing out that a number of physicians in high-risk specialties have in fact been dropped by their insurance carriers, and are having difficulties obtaining coverage.

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