Premiums rising 11% for doctors

The largest malpractice insurer in Massachusetts will raise doctors' premiums 11 percent on July 1, angering physicians who said the growing premiums are driving their colleagues out of the profession, out-of-state, or to give up certain high-risk procedures.

Malpractice premiums -- which under the new rates will climb to more than $90,000 annually for many Massachusetts neurosurgeons and $72,000 for orthopedic surgeons -- have become a rallying cry for doctors. They are pushing for federal and state legislation to limit jury awards and argue that the rising rates are contributing to shortages of certain types of specialists, particularly obstetricians and neurologists.

"This is becoming unaffordable," said Dr. Alan C. Woodward, an emergency room physician and president of the Massachusetts Medical Society, a physicians' advocacy group that released the rates.

ProMutual Group, which covers 10,000 of the state's doctors, will raise rates an average 11 percent this year, but the increases vary widely from specialty to specialty.

The company raised rates 20 percent last year, and 12.5 percent in 2002. This year, ProMutual is hitting diagnostic radiologists who do minor procedures with the largest increase -- 32 percent -- bringing premiums to $18,288 from $13,816 annually.

Dr. Kenneth R. Peelle, a radiologist in Lowell, said rates for his specialty are climbing steeply because of a growing number of malpractice claims involving mammography. More women with breast cancer, he said, are filing claims saying their radiologist misread their mammogram and missed the tumor, leading to a delay in diagnosis and treatment.

"We don't get sued as often as obstetricians or neurologists, but we are getting sued more than internal medicine physicians," Peelle said. "Patients who develop breast cancer are encouraged to bring in their mammograms to lawyers, and have them reviewed to see if they can find something the doctor missed. Even though mammograms don't detect cancer 100 percent of the time, women feel betrayed."

Doctors and insurance company executives say premiums are rising because juries are awarding these and other patients more money, which also drives up settlement amounts. They are pushing legislation to limit the amount juries can award patients for pain and suffering. Massachusetts doctors want additional changes, including limiting the interest paid on awards. Doctors also want to establish standards for expert witnesses, such as requiring physicians to be actively practicing in the specialty on which they are testifying.

But some lawyers, consumer groups, and many Democrats blame the malpractice insurance companies, saying they mismanaged their businesses, including not planning for poor stock market returns earlier in the decade, and now are making up losses by excessively billing doctors. These groups want stricter state regulation of the malpractice insurance industry, including public hearings and rate setting, and more aggressive education programs to prevent doctors' medical errors.

"When the market is depressed, insurance companies earn very little on their investments," said Marc L. Breakstone, a Boston malpractice attorney. "The way they recoup those low returns is by raising premiums. The numbers of settlements and awards have remained flat for the last 10 years. The talk about doctors leaving the profession is exaggerated and designed to create a crisis."

ProMutual's chairman, Dr. Barry M. Manuel, a surgery professor at Boston University, said insurers are not forcing doctors to pay for company losses in the financial markets. "In the past 10 years, there's not one year that we've shown a negative return on our investments," he said. "It's the severity of awards that's driving this situation."

Manuel has said previously that the number of Massachusetts jury awards topping $2 million has quadrupled over five years.

He said ProMutual did not raise premiums as much this year as last year because the company did not need as much money this year to cover recent claims and jury awards.

While the Massachusetts Medical Society is reporting a 3.5 percent increase in rates for obstetricians, bringing their average annual premium to $97,243, Manuel said their rates are well over $100,000 when certain surcharges are taken into account.

Child psychiatrists have some of the lowest malpractice rates, and will pay just over $5,000 starting July 1, a 15 percent increase. Internists who don't perform surgery, the most common specialty, will pay $12,000, also a 15 percent jump.

In Massachusetts, Controlled Risk Insurance Co. has premiums that are significantly lower than those of other companies.

The company, however, accepts only doctors who work for Harvard Medical School-affiliated hospitals, does not pay for agents and other expenses incurred by commercial insurers, and has an aggressive patient-safety program. Last year, the firm's average premium for obstetricians rose to $41,575.

Company representatives did not return telephone calls from the Globe Friday seeking information about the 2004 premiums.

In the end, the presidential election may have the biggest impact on malpractice legislation. "If George Bush is reelected and Republicans gain control of the Senate, there will be a full-scale assault on many fronts," said Breakstone, referring to the president's proposal to cap jury awards. "Bush has made it clear that medical malpractice is a top priority for him."

Liz Kowalczyk can be reached at kowalczyk@globe.com.