Saturday, December 07, 2002
Copyright © Las Vegas Review-Journal

MALPRACTICE INSURANCE CRISIS: Kenny says UMC care threatened

Commissioner alerts governor of developing problems at hospital

The valley's medical malpractice insurance crisis is threatening patient care at University Medical Center and making a burgeoning deficit at the county's public hospital even worse, an official wrote this week.

Clark County Commissioner Erin Kenny, chairwoman of the hospital's board of trustees, told Gov. Kenny Guinn in a two-page letter that doctors are discontinuing or limiting their surgical procedures at UMC. The situation could jeopardize care and hurt the hospital's ability to compete for paying patients, Kenny wrote.

Surgeons and anesthetists are choosing to not practice at UMC because they fear they will be hit with increased insurance premiums if they lose or settle a malpractice lawsuit, Kenny's letter said.

Under state law, public hospitals such as UMC and other government agencies are covered by a $50,000 liability cap. Any remaining damages associated with a malpractice claim are paid by the physician's insurance carrier, UMC Director Bill Hale said.

Meanwhile, private hospitals share with a doctor's insurance company the burden of paying the damages, he said.

Also, at least one insurance company, Physicians Insurance Company of Wisconsin, is charging higher premiums for surgeons who practice at UMC or simply no longer insures them.

Representatives of Physicians Insurance couldn't be reached for comment Friday at their offices in Milwaukee.

Surgeons who perform at least 25 percent of their surgeries at UMC aren't covered by Physicians Insurance, and the others recently were hit with a 25 percent surcharge they wouldn't have to pay if they practiced at competing, private hospitals, Hale said.

"It's a very big deal," Hale said. "They are opting out of practicing at UMC because their insurance companies are charging them 25 percent higher premiums."

The number of elective surgeries performed at UMC between July and November decreased 8 percent from the same period last year, with the rate getting worse each month, Hale said.

"It doesn't help (financially) to have them taking their elective surgeries elsewhere," Hale said. "We are going to have to try to address this during the next legislative session, or the losses are going to continue to mount."

In her letter to Guinn, Kenny said she simply wanted the governor to be aware of the developing problems at the hospital and requested any assistance he might be able to offer.

Guinn had not seen Kenny's letter Friday, in part because he hosted the Western Governors Association meeting at the Green Valley Ranch resort in Henderson this week, Guinn spokesman Greg Bortolin said. Guinn will review the letter Monday, Bortolin said.

Bortolin said the state's new medical liability laws, which were passed during this summer's special legislative session and took effect Oct. 1, should bring down sky-high malpractice insurance rates for Southern Nevada doctors, but the laws need time to work as predicted.

Kenny couldn't be reached for comment Friday. She will vacate her seat on the County Commission and the UMC board next month because she didn't seek re-election. Kenny instead ran for lieutenant governor and lost to incumbent Lorraine Hunt.

Kenny's Dec. 2 letter states: "This increasing trend of private physicians departing from UMC has the potential of impacting the people of Southern Nevada in several ways. In addition to potentially limiting access to quality health care for our patients, and inhibiting a patient's right to choose a medical facility, the resulting reduction in surgical-related revenues at UMC also poses a significant financial challenge to UMC's ability to cover its growing uncompensated care costs."

The clinical and financial consequences of the doctors' departure come as the hospital deals with its largest operating deficit in more than a decade, and as doctors are pushing the Legislature for stronger tort reform to bring down insurance rates.

Clark County Manager Thom Reilly told the commission last month that the county had to allocate $20 million to UMC for losses sustained during the fiscal year that ended in June, and that an additional $17 million may be needed to curtail losses this fiscal year.

The losses, according to hospital officials, are attributable to a 21 percent jump in the number of uninsured patients at UMC and an 11 percent decline in insured patients over the past year.