The Ohio Experience – Neurosurgical Liability Insurance Premiums Explained

In Ohio, professional liability insurance premiums do not vary based on the scope of a physician’s neurosurgical practice. Stated another way for the sake of clarity, there is no reduction in physician premiums for limiting one’s neurosurgery practice to spine surgery.

There currently are five large professional liability insurance carriers underwriting liability policies for physicians in Ohio. Some of these carriers have multistate portfolios and do not offer a specialized rate for neurosurgeons who limit their practice to surgical spine care in any market. These carriers and their approximate Ohio market share include: GE Medical Protective (30 percent), Medical Assurance (20 percent), OHIC (13 percent), American Physician Assurance Corporation (7 percent), and The Doctors Company (6 percent).

Despite the fact that there is no formal premium reduction for eliminating cranial surgery, many neurosurgeons in Ohio are quick to point out that, although base premiums are not modifiable by limiting their scope of practice, premium escalation secondary to a single claim settlement is a major issue. It is their belief that such episodes can be mitigated by limiting exposure to areas of practice that are most likely to result in lawsuits. Typically the practice areas limited are cranial surgery cases involving emergency or trauma.

“Although base premiums are not modifiable by limiting scope of practice, premium escalation secondary to a single claim settlement is a major issue”

Several neurosurgeons further pointed out in focused discussions of this topic that on one hand price controls limit reimbursement while on the other hand practice operating costs escalate. The resulting financial stress on the practice makes it necessary for some to limit their scope of practice to routine low-risk, high-volume procedures and avoid the interruption of emergency cases. The pressure to adopt these practice habits is increasing as professional liability insurance premiums continue to increase because, for the average general neurosurgery practice, insurance premiums are a major driver of operating overhead cost. In Ohio, neurosurgeons’ liability premiums have grown at an annualized rate of 30 percent over the past four years, even for those with a good claims history.

Neurosurgeons in Ohio are not alone in their sentiments. A cross section of physicians in Ohio was surveyed to determine how factors related to medical liability are affecting their practices. The 696 survey respondents said they are modifying their practices in response to liability pressures. Already 37 percent have begun to limit their practice to low-risk patients, and another 15 percent have indicated an intention to do so. Even more striking is that 57 percent of physicians who perform high-risk procedures have indicated that they are already less willing to perform some high-risk procedures, and another 28 percent indicated that they are planning to begin limiting performance of some high-risk procedures.

The evidence demonstrates that rather than a simple premium reduction, there is a complex set of factors underlying the decision by neurosurgeons to limit practice to spine surgery only. This complex set of factors similarly affects other Ohio surgeons who perform high-risk specialty procedures, as well as the general population of physicians. Given the underlying drivers of this situation, it is predictable that without significant and effective reforms the number of neurosurgeons who choose to limit the scope of their practice will increase, aggravating the workforce strains that currently exist within our specialty.

Patrick W. McCormick, MD, MBA, is a neurosurgeon in private practice in Toledo, Ohio.

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