New York State approved a 14 percent increase in the price of medical malpractice insurance Wednesday -- a step the state's government admits is aimed at temporarily fixing a broken system.
The New York State Insurance Department, which sets malpractice coverage rates for the state, justified the increase by saying that while it would be difficult for doctors to pay, it was a necessary step to avoid "perhaps an irreversible crisis" for insurers in the state.
"After years of failing to confront the fundamental problems that have led to this current environment, we have inherited the worst of both worlds -- physicians who cannot afford to practice medicine, and insurers whose financial condition is rapidly eroding," said Eric Dinallo, the state insurance superintendent. "The cause is high medical liability costs, and this administration is going to address it."
After announcing the rate hike, Gov. Eliot Spitzer appointed a committee to look into the causes of the high cost of insuring against medical malpractice.
"Due to years of inaction, the medical malpractice insurance market has reached a crisis level," he said. "This administration will not turn a blind eye to this situation. We will tackle this problem head on."
Doctors are concerned about how the rate hikes will affect their practice.
"The way medicine is structured, your income really depends on how many operations you do," said Dr. Roger Hardl, a neurosurgeon at New York Presbyterian Hospital. "That means that you are put into a position where you have to operate more. I'm not sure that's in the best interests of the public. I'm not sure that's in the best interests of practicing good medicine."
Hardl blames the problem on the lack of a cap for medical malpractice lawsuits in New York state.
He also said he has neurosurgeon colleagues who have given up operating on the brain entirely, focusing on the spine, an area of practice where they don't face such hefty lawsuits.
Dr. Steven Goldstein, who practices obstetrics and gynecology at the New York University School of Medicine, sees the rate hike as a small part of a large problem.
"There's nothing unique about New York, and there's nothing unique about this year, and it's a very sad thing," he said. "There's been a 'malpractice crisis' for as long as I can remember."
Indeed, malpractice insurance premiums appear to be increasing across the board. According to a June 2005 study published in the journal Obstetrics & Gynecology, doctors can expect to pay $250,000 or more every year on malpractice insurance premiums, depending on their specialty and the state in which their practice is based.
And costs are on the rise throughout the nation. Study author Scott Ransom and colleagues at the University of Michigan School of Public Health noted that rates in major metropolitan areas rose sharply in some areas between 2003 and 2004 -- such as in Dade County, Fla., where average premiums rose from $249,000 to $277,000, an increase of about 11 percent.
Or Cook County in Illinois, in which average premiums jumped about 67 percent from $138,000 to more than $230,000 during the same time period.