Malpractice insurance costs on the rise in Franklin County

November 28, 2001

Malpractice insurance costs on the rise in Franklin County


CHAMBERSBURG, Pa. - The skyrocketing cost of medical malpractice insurance in Pennsylvania is beginning to drive doctors out of Franklin County and will result in the rationing of patient care, the president of Summit Health said Tuesday.

"With the ever-increasing costs of malpractice insurance, combined with an inability to get coverage, some (doctors) are relocating to other states," Norman Epstein said in his annual address.

Malpractice costs are 40 percent to 70 percent lower in Maryland, he said.

At Chambersburg Hospital, which is operated by Summit Health, malpractice premiums increased 36 percent in the fiscal year ending June 30, according to Patrick O'Donnell, chief financial officer for Summit Health.


The hospital pays premimums for doctors it employs, but most Franklin County physicians pay their own malpractice insurance, which can run $100,000 or more a year in some specialties, Epstein said.

"Physicians who don't see a leveling off in malpractice insurance will be leaving," he said.

He said the insurance costs, coupled with a general shortage of nurses and physicians, is forcing the rationing of patient services.

"In many parts of the country, there are similar shortages, but because of the liability insurance crisis within the state, we are severely hampered in our ability to recruit and retain these essential physicians" in high-risk specialties, he said.

In addition, some obstetrician-gynecologists are dropping their obstetrics practices to lower their insurance costs, Epstein said.

Those issues prompted Summit Health to announce its maternity clinic, which serves low-income and uninsured women, would close at the end of the year.

Epstein said Chambersburg Hospital also had to cut back on the number of operating rooms open last winter for about two months because they were understaffed.

Epstein said "rationing of health care" is not limited to Franklin County and is becoming more apparent nationwide.

As the baby-boomer generation matures, many of those in the health care field will retire, while fewer young people are choosing health care as a profession.

He said Summit Health and other providers in Pennsylvania are in a "state of crisis" and will no longer be able to deliver the same level of care unless state legislators and the governor make changes to resolve the problem.

A permanent answer would have to come from tort reform, he said.

Last year, malpractice payouts were up to $605 million for the state, and in Philadelphia alone the settlements exceeded those in the state of California, Epstein said.

The tort reform process must allow for reasonable awards and place limits on certain parts of the process, he said.

While the shortage of health care workers continues, the number of patients admitted to Chambersburg Hospital increased by nearly 7 percent last year to 11,761.

"This is the most significant increase that I have seen in my 15 years at Chambersburg Hospital," O'Donnell said. To meet the demand, the hospital added 14 beds.

Outpatient volume increased by 11 percent to 275,578 registrations, due in part to the expanded services at the new Summit Health Center in January, O'Donnell said.

This increase in volume brought the hospital's total operating revenue up $12 million to $115.7 million, with $114.5 million coming from new patient service revenue, he said.

Total operating expenses for the hospital in Fiscal 2000-01 were $113.4 million, an increase of 12 percent over the previous year.

Nearly half, $62.2 million, went to the salaries of the 1,500 employees at the hospital and health center in Chambersburg.

The Herald-Mail Articles