Many medical malpractice insurance carriers in various parts of the United States have reduced insurance premiums specifically for anesthesia providers. Such cuts follow recognition of decreased pay-out for anesthesia claims. These reductions come on top of the generalized across-the-board premium decreases for all medical personnel in some locations (which have been feature-ed in the Wall Street Journal, The New York Times, Forbes, etc. each with specific mention of anesthesiology as a leader in this area).
Some medical malpractice insurance carriers are agreeing to provide premium discounts for anesthesiologists who adhere to the ASA Standards for Basic Intra-Operative Monitoring and, in so doing, use pulse oximetry and capnography. In Massachusetts, anesthesiologists became the first specialty group in the nation approved by a state insurance division to enter into an agreement with a state-controlled –facility That agreement)specified the patient monitoring standards to be used by anesthesiologists.
In other states, insurance carriers view such patient safety/risk/management efforts as purely voluntary, and provide premium discounts to encourage anesthesiologists to use such measures. Some carriers have developed their own risk management courses and offer anesthesiologists premium discounts for participation. While this presentation in no way provides a comprehensive report of all risk management efforts and rate reductions, it highlights a sample of approaches being taken in some states:
The trailblazing activity in Massachusetts is well known, but is worth summarizing again as part of the national picture In 1997, the Massachusetts Insurance Commissioner approved an agreement between the Medical Malpractice joint Underwriting Association of Massachusetts (JUA) and the Massachusetts Society of Anesthesiologists in which anesthesiologists would pulse oximetry and -capnography where appropriate, and would always follow the ASA Standards for Basic Intra-Operative Monitoring. In return, anesthesiologists would receive premium discounts of 15 percent for claims made policies and 20 percent for occurrence policies. At the time of the agreement, the premium relativity for anesthesiologists was 5.0 (this is the actuary determined risk of a specialty practice compared to & lowest risk group). While several specialty groups applied for rate relief based on risk management activities, only anesthesiology was accepted as a suitable test group.
Anesthesiologists who adhered to the JUA Standards on July 1, 1988 were rated down from a relativity of 5 ($24,268) to a relativity of 4 ($20,210), minus the 20 percent for occurrence policies and 17.S percent for claims made policies. On July 1, 1989, anesthesiologists who followed the JUA Standards were rated down to a relativity of 3.5, ($20,088) minus the 20 percent for occurrence and claims made policies. Beginning July 1, 1990, anesthesiologists who followed the JUA standards were rated down to a relativity of 3, ($17,219) minus the 20 percent for occurrence and claims made policies.
In addition to rate reductions for anesthesiologists, a report compiled by the JUA indicates a significant decline in the number of claims for hypoxic injury” The report showed that between 1975 and the beginning of the risk management program in July, 1997, JUA averaged six to eight hypoxic injury claims per year. Although six hypoxic claims were reported between July, 1987 and the end of that year, none of the claims involved anesthesiologists who participated m the risk management program. The anesthesiologists named in the claims did not fully utilize pulse oximetry or capnography. Between January, 1988 and March, 1989 no hypoxic injury claims were reported and only two hypoxic injuries were reported between April, 1989 and February, 1990. Of these, the investigation of the first claim revealed that the hypoxic injury was related to a medical equipment problem, not anesthesia care. The second patient had the benefit of capnography, but not oximetry, and the case remains under investigation.
The medical malpractice insurance rates for policy year beginning July 1, 1991 are expected to reflect a 20-2 5 percent reduction across the board in the base rate for all physicians, plus an additional 20 percent discount for anesthesiologists. Therefore, for the policy year beginning July 1, 1991 the current 1990 rates of $17,219 for a $1/3 million, occurrence policy are expected to be reduced to approximately $12,900 with the rate further reduced by 20 percent ($2,580) for those anesthesiologists participating in the risk management program.
Mutual Insurance in Alabama implemented a risk management program in July, 1990. The Anesthesia Monitoring /Documentation Credit gives a 20 percent premium credit to anesthesiologists who agree to use pulse oximetry and capnography and to document such use. Mutual Insurance figures approximately 90 percent of the anesthesiologists in Alabama who practice outside of the University of Alabama hospital -setting.
The Colorado Physicians Insurance Company has had patient saw guidelines in effect for four years. While the insured are not required to follow the guidelines and & company does not offer discounts to encourage compliance, the company reports that the number of claims against anesthesiologists has declined and as a result the malpractice premiums have been reduced. The decline in claims over the past three years is attributed to the implementation of patient safety guidelines.
In 1990, physicians were offered a 5 percent discount (up to $ 1,000) for participation in the Medical Association of Georgia (MAG) Mutual Insurance Company’s voluntary risk management program. The program contains one seminar to address basic risk prevention skills and another seminar targeted to the physicians specialty. Eligible physicians receive a discount for each seminar.
Indiana anesthesiologists were successful in negotiating new contracts with their medical malpractice carriers by showing that they are now subject to fewer and less costly claims. The anesthesiologists were reduced from a Class 5 to a Class 4 risk, a decrease of about $ 6,000 in premiums. The Physicians Insurance Company of Indiana granted a 20 percent discount for anesthesiologists who use pulse oximeters and capnographs.
The Kansas Society of Anesthesiologists worked with the Kansas Medical Mutual Insurance Company (KaMMCO)to achieve a 25 percent rate reduction for anesthesiologists agreeing to abide by the ASA Standards for Basic Intra-Operative Monitoring. KaMMCO Ls a physician-owned insurance company.
LAMMICO, the Louisiana Medical Mutual Insurance company now requires that anesthesiologists use pulse oximeters. In return, anesthesiologists receive a 20 percent discount in premiums and a Class 5 rating. The use of pulse oximeters had been voluntary until this year.
In New York, legislation was passed to provide an “appropriate” reduction in medical malpractice insurance premium for physicians who complete an approved course in risk management. The insurance superintendent has the authority to determine the amount of the reduction and to set the standards for the risk management course
In 1989, the Northwest Physicians Mutual Insurance Company in Oregon provided a I 5 percent reduction to anesthesiologists who agreed to follow practice guidelines similar to those of Massachusetts JUA. In 1990, anesthesiologists were graded down to a Class 4, with a premium reduction of more than 25 percent.
In 1987, the Texas Medical liability Trust (TMLT) initiated a program whereby anesthesiologists who would agree to monitor their patients consistent with ASA Standards would receive a 6 percent reduction in medical malpractice premium. Since 1987, the premium reduction has increased to 25 percent. In addition, TMLT has developed its own risk management course and offers participants a 5 percent premium discount.
TMLT has released a report on the program which states that “‘. . the ongoing study of anesthesia claims and their origins at TMLT has shown a significant decrease in the number of claims reported since the implementation of anesthesia patient safety *guidelines:’ The report also states that the claims “. . . appear to be of somewhat less severe patient outcomes and fewer hypoxic catastrophes.”
The Wisconsin Society of Anesthesiolosists successfully negotiated with the Physician Insurance Company of Wisconsin (PIC-WIS) and received discounts of up to 25 percent for following specific practice guidelines, including the use of oximetry and capnography.
The reports from the Massachusetts and Texas experiences are encouraging both in terms of fewer claims and reduced premium. Abiding by the ASA Standards for Basic Intra-Operative Monitoring and using pulse oximetry and capnography may result in significant savings for anesthesiologists now negotiating new policies.
Ms. Turpin is state Issues Coordinator, ASA Office of Governmental Affairs, Washington, D.C,
Editor’s Note: Additional contributions of information about risk management/patient safety efforts in other states or insurance companies are very welcome and will be published here.