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OCR for page 59
Obstetrical Care for Low-Income
Women: The Erects of Medical
Malpractice on Community
Health Centers
DANA HUGHES, M.P.H., M.S., SARA ROSENBAUM, J.D.,
DAVID SMITH, M.D., AND CYNTHIA FADER, B.S.N.
~ he field of obstetrics has undergone
intense and rapid change in recent years, in large part because of the
crisis in professional liability. Rising premiums for malpractice insur-
ance and escalating numbers of lawsuits have transformed obstetrics for
providers and patients alike. Among the most dramatic changes has
been the exodus of obstetricians and family doctors from obstetrical
practice. Studies show that as many as 12 percent of obstetricians and 60
percent of family doctors have elected to omit obstetrics from their
medical practices for malpractice-related reasons.) 2 Many more have
decreased the number of deliveries they will perform for medically high-
risk patients. The American College of Obstetricians and Gynecologists
(ACOG) estimates that as many as 14 percent of obstetricians have
decreased the number of their deliveries and 23 percent have decreased
the percentage of their practice time devoted to high-risk obstetrics.3
These malpractice-driven reductions in obstetrical services are occur-
ring at a time when the number of practicing obstetrical providers may
already be poised to decrease, for three reasons. First, the "graying" of
America is reducing the need for obstetrical services and increasing the
need for gynecological care. The issue of professional liability is fueling
this process.
Second, the number of uninsured and publicly insured women has
increased substantially in recent years. Census data show that, between
1980 and 1985, the number of Americans under the age of 65 without
59
OCR for page 60
60 MEDICO P~FESSiONAL I: VOILE ~
health insurance grew by 40 percent.4 By 1985, there were 14.5 million
women of childbearing age without health insurance that covered ma-
ternity care and 9.5 million such women without any health insurance
at all.5
In response to this problem Congress has greatly expanded the Medi-
caid program in recent years to cover more low-income women who
otherwise would be uninsured, substantially increasing the number of
publicly insured women. Nevertheless, the U.S. General Accounting
Office (GAO) found in a recent study that women covered by Medicaid at
the time of delivery are only slightly more likely than uninsured women
to receive early care.6 Several factors explain this phenomenon. The
unwieldy Medicaid enrollment process alone can prevent a woman from
receiving care until well into her pregnancy.7 Another clear contribut-
ing factor is the relatively small percentage of obstetricians who will
accept Medicaid patients. Only 63 percent of obstetricians reported that
they take any Medicaid patients; of those who do, most see only a small
number.8 The average obstetrician who accepts Medicaid devotes about
8.3 percent of his or her patient load approximately 12 patients a
years to Medicaid beneficiaries.
The extent to which women are uninsured or publicly insured is
especially important in a discussion of the delivery of maternity care
because of the pivotal role that health insurance plays in the acces-
sibility of care. The GAO found that less than one-third of uninsured
women received adequate prenatal care, compared with 81 percent of
insured women.~° As a declining proportion of women of childbearing
age are insured, obstetricians' ability and willingness to practice an
expensive form of medicine are also likely to decline.
A third factor that contributes to the declining availability of obstetri-
cal providers is the changing demographics of childbearing, which is
increasingly concentrated among young, low-income, poorly educated
women who, as a group, represent an unattractive patient load. Obste-
tricians may be subconsciously, if not consciously, responding to this
trend.
Although the availability of obstetrical providers has declined in
recent years for all women, there has always been inadequate care for
poor women. For example, much is made of obstetricians' "growing"
unwillingness to accept Medicaid patients; in fact, the pool of obstetri-
cians participating in the program shrank only slightly between 1977
and 1986, from 64 percent to about 63 percent. Indeed, a critical obstetri-
cal shortage for poor women had been recognized by 1972 when the
National Health Service Corps was created to deploy providers in under-
served communities. At that time, priority was given to the placement of
maternity care providers because of the critical shortage in many com-
OCR for page 61
OBSTETRICAL CARE FOR LOW-INCOME WOMEN
61
munities of obstetricians available and willing to serve low-income
women. In short the exodus of physicians from obstetrical care gener-
ally, and from the care of low-income women specifically, exacerbates
what was already a serious problem.
MEDICAL MALPRACTICE AND LOW-INCOME WOMEN
The threat of malpractice litigation and the high cost of liability
insurance impose two strains—one direct and one indirect—on the
obstetrical system. The direct strain is the cessation of practice among
providers unwilling to expose themselves to suit. The indirect strain
comes as the price of care is driven so high by escalating insurance
premiums that it becomes unaffordable. Poor women are the most likely
to be affected by the decline in availability because they cannot afford to
pay the escalating rates. Moreover, as a result of their poverty, their
insufficient food and poor nutrition, and lifetimes of inadequate health
care, low-income women as a rule are at greater social and medical risk
of pregnancy-related complications. Therefore, to the extent that obste-
tricians elect to limit their practice to low-risk patients, low-income
women are, by definition, excluded.
Medicaid-covered patients and other low-income women are also un-
appealing as patients because providers cannot pass increased costs
along to them. Medicaid reimbursement rates, which are always low in
comparison with prevailing rates, are further eroded by rising malprac-
tice insurance premiums—so much so that few doctors can afford to take
many Medicaid patients. In at least eight states malpractice insurance
premiums per delivery are higher than global Medicaid fees paid to
physicians for prenatal and delivery care.~3 Self-paying patients pose
similar problems for doctors because most uninsured patients are un-
able to meet normal physician charges, let alone increases related to
· . · .
rlslng Insurance premiums.
Physicians' fears of malpractice suits have disproportionately affected
access to care for poor women because of a widely held but unsubstanti-
ated perception among physicians that poor women are more litigious
than nonpoor women.~4 Physicians who do not serve Medicaid patients
report that this perceived litigiousness is among the principal reasons
for their not taking Medicaid patients.~5
Data are limited on the extent to which this crisis has affected care for
low-income pregnant women, although the data that are available sug-
gest that poor women may be less rather than more likely to pursue a
malpractice incident. There is ample documentation that providers
who are able or willing to serve uninsured and publicly insured preg-
nant women are in limited supply, but these data do not always distin-
OCR for page 62
62 MEDICAL PROFESSIONAL LIABILITY: VOLUME II
guish the influence of fear of malpractice suits from the influence of
other factors, such as low reimbursement rates, slow payment, racial
biases, and so on.~7
PURPOSE OF STUDY
The purpose of this study was to determine the direct and indirect
effects of the medical malpractice phenomenon—including rising pre-
mium rates, the escalating number of claims against obstetricians, and
perceptions of increased risk of malpractice suits by poor women—on the
availability of maternity services for low-income pregnant women at
Community and Migrant Health Centers. Located in federally desig-
nated medically underserved areas, Community and Migrant Health
Centers receive federal grants to furnish medical care to persons unable
to obtain care from other sources. Health centers are explicitly designed
to provide free and reduced-cost care to uninsured and low-income
patients.
Health centers were selected as the subject of the study for three
reasons. First, they are a major source of health care for low-income
pregnant women. Of the 5.5 million people served by health centers in
fiscal year 1986, approximately 1.3 million were women of childbearing
age. That year, the centers provided maternity care to 120,000 pregnant
women, more than half of whom had family incomes below 100 percent
of the federal poverty level.
Second, in numerous communities the health center is the only pro-
vider willing to accept Medicaid and uninsured patients. Thus, the
extent to which health centers are affected by the medical malpractice
situation may indicate the effects of the situation on low-income women
generally. In other communities the health center is the only health
resource; if malpractice concerns affect these centers, care for virtually
the entire community is affected.
Third, health centers can be expected to play an even greater role in
the provision of maternity care in the future. As states expand their
Medicaid programs to cover more women, the number of pregnancies
covered by Medicaid will increase. In Washington State alone it is
estimated that by 1995 one-third of all births will be to Medicaid-
covered mothers, in contrast to 17 percent of all births in 1984-1985.~8
Without an increase in the pool of obstetricians who are willing to accept
Medicaid patients, current providers, such as Community Health Cen-
ters, will have to accommodate this increased demand.
In analyzing the impact of the malpractice phenomenon we were
mindful of the wide variations in staffing configurations in health cen-
ters. Staffing patterns range from full complements of staff profes-
OCR for page 63
OBSTETRICAL CARE FOR ~W-INCOME WOMEN 63
signals (obstetricians, family doctors, midwives, nurse-practitioners,
and allied personnel) working at centers that are formally affiliated
with hospitals, to contractual arrangements with private doctors, hospi-
tals, and other providers of maternity care at center sites comparable to
community general medical practices without staff specialists. The
capacity of the staffs and the strength of the contractual arrangements
determine the availability, accessibility, and quality of care that centers
can provide.
We hypothesized that the malpractice climate especially rising in-
surance premiums and the threat of litigation—may have reduced the
centers' capacity to provide maternity care in various ways. First, cen-
ters that have their own obstetrical staff would be affected as the cost of
maintaining that staff rose precipitously with escalating insurance
premiums. Second, centers that contract for services would either lose
contractors because of the contractors' malpractice concerns or else find
themselves unable to afford the prices contractors charge to cover their
increasing costs.
Health centers are expected to be especially vulnerable to the eco-
nomic fallout ofthe malpractice problem: after deep cuts in their federal
funding in 1981, they experienced modest increases until fiscal year
1988, when funding was frozen.~9 These increases did not offset the
rising costs of providing care. Congress's Office of Technology Assess-
ment found that the level of financial support in 1984 was less in real
dollars than it had been four years earlier.20 Furthermore, a steep rise in
the proportion of uninsured persons occurred during the same time
period. We surmised that these two trend~declining financial support
and increased demand would leave health centers unable to absorb
rising costs and weather the malpractice storm.
Adding to the health centers' vulnerability is the virtual demise of the
National Health Service Corps, which over the years has placed thou-
sands of primary care physicians, including obstetricians, in areas in
which there was a shortage of health manpower; most often, these
physicians staffed health centers. Federal budget reductions, justified
by a projected surplus of 50,000 physicians by 1990, resulted in a decline
from 6,409 new corps scholarships in 1980 to 49 in 1987.
METHODOLOGY
Data for this study were gathered in a survey of Community and
Migrant Health Center directors during April and May 1988. A random
sample of 208 centers was selected, representing 37 percent of all cen-
ters. Of the 208 questionnaires in the original sample, 69 were ulti-
mately excluded because the respondents were not Community Health
OCR for page 64
64 MEDICAL PROFESSIONAL LIABILITY: VOLUME II
Centers.22 Thus, the actual sample size was 139, or 25 percent of all
federally funded health centers.
Centers were mailed a six-page questionnaire and given the oppor-
tunity of answering either by telephone or by mail. Most responded by
mail. Follow-up calls to clarify answers or to complete missing data were
conducted for the majority of centers. Fifty-eight completed question-
naires were received, representing 42 percent of the sample.
Table 1 compares the distribution of health centers responding to the
survey and the total distribution of centers by U.S. Public Health Ser-
vice region; the percentages are similar. Likewise, responding centers
reflected overall distributions of size and annual number of patients
(Table 21.
Although the responses resemble the true distribution and size of all
health centers, it is possible that the sample may be limited by a
selection bias. Among the questions asked of the centers was whether a
medical malpractice claim had ever been made against them. Some
centers that have actually experienced such claims may have elected not
to complete the survey. In that case our sample would represent a
disproportionate number of centers without claims, whereas centers
TABLE 1 Distribution of Total and Responding Health Centers, by
Region, 1988
Public Health
Service Region
Total Centers Responding Centers
Number Percentage Number
Percentage
I (Me., Vt., N.H., Mass., Conn., 37 7 5 9
R.I.)
II (N.Y., N.J.)a 50 9 3 5
III (Pa., Va., W.Va., Md., Del., 74 13 4 7
D.C.)
IV (Ky., Tenn., N.C., Miss., Ala., 139 25 17 29
Gal, S.C., Fla.)
V (Minn., Wis., Mich., Ill., Ind., 64 12 6 10
Ohio)
VI (N.M., Tex., Okla., Ark., La.) 53 10 9 16
VII (Neb., Iowa, Kans., Mo.) 23 4 2 3
VIII (Mont., N.D., S.D., Wyo., 31 6 3 5
Utah, Colo.)
IX (Calif., Nev., Ariz., Hawaii)b 48 9 6 10
X (Wash., Ore., Idaho, Alaska) 27 5 1 2
Unknown 2 3
Total 546c 100 58 99
aExcludes Puerto Rico and the U.S. Virgin Islands.
bExcludes Guam and American Samoa.
CThere are 568 centers in the United States and its territories. This figure excludes those
located in Puerto Rico, the Virgin Islands, Guam, and American Samoa.
Total percentage does not equal 100 due to rounding.
OCR for page 65
OBSTETRICS CASE FOR INCOME WOMEN 65
TABLE 2 Distribution of Total and Responding
Health Centers, by Number of Encounters, 1987
Number of Total Centers Responding Centers
Encounters Numbera Percentage Number Percentage
< 4,999 226 41 19 33
5,000-9,000 170 31 14 24
10,000-14,999 77 14 11 19
> 15,000 69 13 12 21
Unknown 46 1 2 3
Total 546 100 58 100
a There are 568 centers in the United States and its territories.
This figure excludes those located in Puerto Rico, the Virgin Islands,
Guam, and American Samoa.
b No female users aged 15-44 years.
with claims would be underrepresented. If so, the data from this survey
on the severe difficulties of health centers become even more troubling
because the responses would not include centers that have actually
experienced malpractice litigation.
RESULTS
The vast majority of health centers reported that medical malpractice
issues either directly or indirectly affected the provision of maternity
care. Thirty-nine centers (67 percent) indicated that the medical mal-
practice phenomenon has affected either their ability to furnish obstet-
rical services or the scope of services they could offer. Nineteen of the
centers (33 percent) reported that they were unaffected (Tables 3 and 41.
Of the 19 centers reporting no problems, most had some protection
against financial and provider drain. Four were affiliated with hospitals
and received medical malpractice insurance coverage through them.
Two indicated that their doctors were commissioned officers of the U.S.
Public Health Service and thus were either covered under the Federal
Tort Claims Act or had their malpractice insurance paid for by the
federal government. Four offered no maternity care at all, either be-
cause they were too small to justify establishing the service or because
there were free services available in the community to which they could
refer patients. Therefore, only 9 of the 19 centers (16 percent of total
respondents) that reported themselves to be unaffected by the malprac-
tice situation had no obvious protection against its high financial and
professional costs. Of these 9 centers, most reported that they expected
to be affected soon. "We are very fortunate," one center wrote, "but there
is no question that [malpractice] represents a very serious problem."
OCR for page 66
66 MEDiC~ P~FESSiONAL If: VOILE ~
TABLE 3 Malpractice Problems Among Responding Health Centers,
by Region, 1987
Public Health
Service Region
Respondents (N = 58)
Malpractice Malpractice Did Not
Total Posed Problems Pose Problems
I (Me., Vt., N.H., Mass., Conn., 5 4
R.I.)
II (N.Y., N.J.)a 3 0
III (Pa., Va., W.Va., Md., Del., 4 3
D.C.)
IV (Ky., Tenn., N.C., Miss., Ala.,
Gal, S.C., Fla.)
V (Minn., Wis., Mich., Ill., Ind.,
Ohio)
VI (N.M., Tex., Okla., Ark., La.)
VII (Neb., Iowa, Kans., Mo.)
VIII (Mont., N.D., S.D., Wyo.,
Utah, Colo.)
IX (Calif., Nev., Ariz., Hawaii)b 6 5
X (Wash., Ore., Idaho, Alaska) 1 0
Unknown
Total
17
6
9
2
3
12
5
4
3
2 2
58 39
3
19
a Excludes Puerto Rico and the U.S. Virgin Islands.
b Excludes Guam and American Samoa.
The professional liability climate affected health centers in two major
ways: (1) by reducing their capacity to furnish or purchase maternity
care through staff or contract providers and (2) by forcing some centers,
as a result of certain practices in insurance policy writing, to furnish
care that might ultimately place the centers at greater risk for malprac-
tice suits. The net effect was to curtail access to maternity care for Tow-
income women and in some areas to force centers to make practice deci-
sions based on the requirements of insurance carriers rather than on
standards of quality medical practice.
TABLE 4 Adverse Effects of Malpractice Costs Among Responding
Health Centers, 1988
Effect
Respondents (N = 58)
Number Percentage
Limited number of physicians under contract 19 33
Hampered recruitment and retention of physicians 25 43
Limited number of physicians hired 26 45
Reduced number of maternity patients seen 26 45
OCR for page 67
OBSTETRICS CARE FOR [OW-iNCOME WOMEN 67
Service Capacity
As noted earlier, most responding health centers provided some ma-
ternity care (either prenatal care alone or both prenatal and delivery
services). Services were provided in several configurations: 21 centers
(36 percent) reported that they offered maternity care through a combi-
nation of staff and contract providers; 12 (21 percent) said that they
contracted out all maternity care; and 13 said they had sufficient staffto
furnish all maternity care (Table 51.
Only 22 of the 34 centers with maternity care providers on staff
indicated that the providers included obstetricians. Of these 22 centers,
15 (65 percent) reported that the doctors were assigned to them through
the National Health Service Corps; only 7 had full- or part-time staff
obstetricians that had not been acquired through the federal govern-
ment. Thirteen centers used family physicians on staff for maternity
care, either alone or in concert with contract physicians for backup or
referral. Only 10 centers reported using midwives or midIeve] practi-
tioners for maternity care.
Affected centers reported that their existing maternity care systems
were threatened or weakened because rising medical malpractice insur-
ance costs or the specter of litigation, or both, limited their ability to
recruit and retain staff or to establish and maintain contractual ar-
rangements.
Provider Recruitment and Retention
Since their inception, Community and Migrant Health Centers have
had difficulty recruiting and retaining physicians because of the rela-
tively low salaries they must pay, their isolated locations, and the
TABLE 5 Arrangements for Providing Maternity Care Among
Responding Health Centers, 1987
Arrangement
.
Contract part of services
All salaried staff
Contract all services
No obstetrical care
Referring for delivery without formal contract
Respondents (N = 58)
Number Percentage
21
13
12
6a
5
36
22
21
10
-
Did not respond to question 1 2
Total 58 100
a Of these, three have informal referral arrangements for pregnant patients, and three
do not.
OCR for page 68
68 MEDICAL PROFESSIONAL HABILITY: VOLUME lI
intense work demanded of employees. The National Health Service
Corps was established in large part because health centers and other
providers in medically underserved areas had difficulty attracting staff.
Although the corps provides a temporary remedy for health centers, it
addresses only one aspect of the centers' recruitment problem at best: a
potential pool of physicians. To recruit and retain corps assignees or any
other staff, centers must also have the resources to pay competitive
salaries. Over the years, most centers have managed to scrape together
the funds needed to recruit corps assignees and other persons. However,
the rising cost of malpractice insurance has cut deeply into the resources
available for compensation, so much so that many centers are unable to
provide all aspects of perinatal care and are unable to piece together a
financial package that is adequate to retain recruited staff.
T~renty-five (46 percent) of the 54 responding centers that reported
furnishing maternity care stated that the high cost of medical malprac-
tice insurance limited their ability to recruit and retain maternity care
providers. Moreover, the high cost of obstetrical care was a key factor in
centers' decisions to offer no such care at all. Some centers stated that
the rising premium rates being demanded for obstetrical providers were
simply unaffordable. For other centers, malpractice insurance costs cut
so deeply into their total compensation package that they could not offer
competitive salaries and benefits.
Thirty-three of the responding centers reported no problems recruit-
ing doctors; however, 38 percent of these centers were staffed exclusively
with doctors from the National Health Service Corps. With the planned
demise of the corps (the last 100 obligated scholars will be placed in
1994), the protection provided these centers by the corps will not last
long.
Ironically, four centers indicated that malpractice problems made
recruitment and retention of staff easier. These centers were all aff~li-
ated with hospitals; thus, their ability to offer malpractice insurance as
a benefit through the hospital was a major incentive for physicians to
work for them.
Contractual Arrangements
Community and Migrant Health Centers commonly contract with
other providers for services that cannot be furnished on site. Twenty-
one (36 percent) of the responding centers indicated that they con-
tracted with local providers for some maternity services. Twelve centers
(21 percent) contracted for all of their maternity services (see Table 51.
Contracting arrangements were established either to provide spe-
ciaTized backup or to supplement family practice physicians and mid-
OCR for page 69
OBSTETRICS CARE FOR LOW-INCOME WOMEN 69
wives on staff. Of those centers that reported contracting for some or all
of their maternity care, most did so because their family doctors or
midwives were not allowed to attend deliveries. Because we did not ask
specifically why family doctors could not attend deliveries, the reasons
why centers contracted for maternity services are unclear; however,
some centers volunteered that they could not afford the additional insur-
ance costs required for coverage of delivery services. In some cases it
appeared that hospitals refused to extend admitting privileges to family
practitioners and midwives, thereby curtailing the ability of health
center staff to deliver even low-risk patients.
Effect on Access to Maternity Care
The most profound effect of the malpractice phenomenon revealed
through the survey was its impact on access to maternity care. Twenty-
five centers (43 percent) indicated that they were forced to "turn patients
away" because they were understaffed and were unable to recruit or
contract with enough maternity care providers. The centers either could
not afford the additional costs associated with treating these patients or
could find no contract providers willing to affiliate with them. Most (17)
of these centers were able to serve a portion of the patients who sought
care but were forced to deny care to others.
Centers indicated that patients who could not be served were gener-
ally given suggestions about where else they might obtain care, al-
though some centers were unable to establish even informal referral
arrangements with other providers. Several centers reported that they
had no one to whom they could refer the patients they could not serve,
either because private providers would not take the patients or because
there were no alternative providers at all. One center indicated that
there were no community doctors in the area who would accept Medicaid
reimbursement. Another reported that patients with insurance were
sent to the nearest obstetrician, 45 miles away; those without insurance
were sent to the university hospital, 65 miles away.
Six responding centers were unable to provide care to any pregnant
patient because they could neither provide care on site nor contract with
other providers.* Of these six centers, five cited the high cost of provid-
ing obstetrical care, including rising medical malpractice insurance
premiums, as the major reason for not offering maternity care. One
* Three of these centers used informal referral networks to suggest where pregnant
patients might go but had no formal contractual system; the remaining three indicated
that no such networks existed.
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70 MEDICO P~FESSiON~ LAITY: VOILE ~
center put it bluntly, "We are unable to provide on-site or contract off-
site prenatal care and delivery services because of the high cost of
medical malpractice insurance. As a result, the center is offering none of
these services."
Five centers (10 percent of the 52 centers furnishing maternity care)
reported that they were forced to discontinue care of women at the time
of delivery because the family doctors or midwives on staff could not
perfo~-~ deliveries and could not identify community physicians to
whom they could refer patients for delivery care, either on a formal or
informal basis. The patients were virtually on their own to locate deliv-
ery care. One center reported that it was forced to send all patients—
nearly 700 a year to the local hospital emergency room for deliveries.
Another referred patients to the county hospital for deliveries.
Center providers were prohibited from delivering babies either be-
cause their malpractice insurance policies prohibited it or because local
hospitals allowed deliveries only by obstetricians. In turn, the fear of
malpractice suits and the rising costs of malpractice insurance were
cited as the primary reasons for community obstetricians' unwilling-
ness to contract with the centers or to accept referrals. One center wrote,
"Only one in three obstetricians in the community does obstetrics fat
all] because of the high cost of malpractice. And no family doctors do
obstetrics because of lack of obstetrical backup."
Malpractice and Standards of Care
Ironically, the malpractice insurance system itself has created the
risk of claims against some health centers through two avenues. First,
family doctors and nurse-midwives were forced into the medically un-
sound practice of discontinuing care for patients at the time of delivery
because they were unable to obtain community backup or referrals for
delivery. This discontinuance of care could be characterized as abandon-
ment, which constitutes grounds for liability and loss of license.
Second, some centers reported that they were forced to replace experi-
enced doctors with new graduates because of the escalating malpractice
premium costs for experienced physicians. Insurers base this practice on
the theory of "accumulated exposure," that is, that the risk of being sued
increases over time. Thus, patients were deprived of the most experi-
enced physicians as a means of avoiding higher malpractice insurance
costs.
Increased Risk for Family Doctors
As a matter of economy, most health centers with maternity care
providers on staff employ family doctors rather than obstetricians. One-
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OBSTETRICS CASE FOR [OW-INCOME WOMEN 71
third of the centers reported that they were staffed with family practi-
tioners who furnished prenatal care. However, as indicated above, the
centers also reported that the vast majority of these physicians were not
permitted to deliver babies because of insurance or hospital credential-
ing limitations. Family practice staff delivered babies in only 6 percent
of the centers.
When family doctors and other providers have strong referral net-
works for delivery, this arrangement is not necessarily troublesome.
Many centers in our survey, however, were unable to develop backup or
referral arrangements, and the family doctors and midwives were
placed in the untenable position of having to choose whether to drop the
patient at the time of delivery (and hope that she could make it to the
emergency room), deliver a baby without malpractice coverage, or cease
furnishing prenatal care altogether. Ceasing care of the patient at the
time of delivery not only places the patient in jeopardy and the physician
in an ethical and liability dilemma but also creates potential liability
for the physician who ultimately performs the delivery without any
prior knowledge of the patient.
Accumulated Exposure
Data from the centers regarding the costs of malpractice insurance
show that, among most of those reporting this information, rates have
increased substantially in recent years (Table 6~. The cost of coverage for
obstetricians increased by more than 400 percent between 1985 and
1987 at one center and for family doctors by almost 150 percent at
another. These increases apparently had little or nothing to do with
claims experiences because only eight ofthe responding centers had ever
had a maternity-related claim made against them.
One factor that did enter into the price determination, at least in some
states, was provider experience. Seven centers reported that premium
rates for young, newly credentialed doctors were lower than those for
experienced physicians. Centers were told that this was because more
experienced doctors, by virtue of their greater number of years in prac-
tice, were more likely to be sued. One center reported that the cost of
malpractice insurance was almost three times higher for the doctor who
had worked there for more than seven years than it was for a newly
recruited doctor with less than two years of experience at the center.
Another center, which was ultimately unsuccessful in recruiting an
obstetrician, was told by its insurance company that the premium for a
first-year obstetrician would be $30,000; over the next four years that
premium would increase to $60,000. At this center, as at others, costs
apparently leveled off after a physician had been employed there from
five to eight years.
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72 MEDiC~ P~FESSiONAL CITY: VOILE ~
TABS 6 Malpractice Insurance Costs per Practitioner
at Responding Health Centers, 1985-1987a
1985 Costs 1987 Costs Percent
($) ($) Increase
Obstetricians
7,000 35,265 403
4,570 16,750 266
7,007 24,607 251
28,450 72,097 153
6,000 15,000 150
20,000 45,000 125
18,124 39,984 121
25,000 48,000 92
22,886 35,780 56
23,521 36,046 53
24,000 32,000 33
Family Practitioners
3,251 8,042 147
1,700 4,200 147
4,200 8,600 105
5,500 11,000 100
2,000 3,731 87
574 1,066 86
3,900 7,100 82
7,194 12,132 69
4,869 6,908 42
6,700 8,400 25
8,000 9,000 13
2,500 2,800 12
Midwives
585 4,088 599
1,498 1,605 7
a Includes all centers reporting these data.
b These practitioners provided prenatal care only. None was allowed
to deliver babies under the insurance policy.
Per Se Risk
Some centers were unable to obtain insurance for any doctors deliver-
ing babies, even at an elevated price. One center was turned down by a
company because, according to the insurance carrier, "center patients
posed an inherent risk." In such cases, centers are placed in an impossi-
ble bind: they are unable to obtain insurance for either seasoned, experi-
enced doctors or for young, inexperienced doctors.
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OBSTETRICAL CARE FOR LOW-INCOME WOMEN 73
CONCLUSIONS
Our survey of health centers confirms that, in addition to conse-
quences documented elsewhere, the rapid escalation of medical mal-
practice premiums has taken a terrible toll on the number of medical
care providers who are willing or able to serve low-income pregnant
women. The vast majority of centers surveyed felt the impact of malprac-
tice costs on the health services they offered. Nearly every center fur-
nishing maternity care experienced a reduction in its ability to provide
or purchase necessary health services for pregnant women. Many cen-
ters with adequate staff to furnish at least low-risk maternity care have
been forced to curtail or eliminate services because insurers refuse to
provide delivery coverage except at exorbitant costs that clinics cannot
afford. Still other health centers have seen the disintegration of their
referral arrangements to specialists as more and more obstetricians
either leave the practice of obstetrics altogether or else refuse to treat
those they perceive to be high-risk patients.
Several observations are in order. First, it is evident that, given the
need for services and the scarcity of financial resources, the federal
government cannot afford to have vast sums of public health money
diverted into malpractice insurance. The U.S. Department of Health
and Human Services estimates that in fiscal year 1988 approximately
$30 million of the $445 million appropriation for health centers will be
spent on malpractice insurance for health center staff. Much of this cost
will be attributable to obstetrics-related activities. This $30 million
expenditure on malpractice insurance represents 7 percent of the cen-
ters' total budget—sufficient funding to build about 60 health centers in
medically underserved areas or to increase by one-third the funds now
being spent by health centers on maternity care.
Second, this expenditure is particularly disturbing given the fact that
there appears to be no relationship between the rapid escalation of costs
and the centers' malpractice claims profiles. Only eight (14 percent) of
the centers in our study had ever had a claim filed against them far
fewer than the average 73 percent of obstetrician-gynecologists in pri-
vate practice who have been sued.23 Although centers with more claims
might not have responded to our survey, other studies confirm that
physicians practicing in health centers have modest (16 percent) claims
profiles.24 Thus, for health centers, the adverse effects generated by
malpractice premiums are particularly unwarranted.
Third, some insurers appear to be engaging in practices that we
consider to be unconscionable. Physicians and midwives who are capa-
ble of attending at least low-risk pregnant women have been effectively
disinsured for delivery services unless they pay astronomical rates. As
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74 MEDICAL PROFESSIONAL LIABILITY: VOLUME 1:1
referral providers simultaneously disappear, health centers are being
forced to make inadequate, uncontrolled delivery arrangements for
their patients—in some instances simply referring them to hospitals for
delivery by house staff rather than following patients through deliv-
ery themselves or through a carefully arranged network.
Other practices seriously compromise high-quality care. For example,
the practice of penalizing experienced physicians constitutes a "your-
number-is-up" approach to malpractice coverage. This policy means
simply that health centers will be able to afford only relatively young,
· . · -
nexperlencec ~ p. Scans.
It is evident that such insurer practices do not promote comprehen-
sive, high-quality care. Rates do not depend on adherence to carefully
designed standards of quality, nor are they tied to experience, creden-
tials, or continuing education. Instead, they constitute, in our opinion, a
blatant attempt to shield companies from risk by discouraging or pro-
hibiting physicians from engaging in the practice of obstetrics alto-
gether. In short, malpractice insurers, by denying coverage to qualified
center physicians, by discriminating against more experienced physi-
cians, and by contributing to an overall reduction in the financial re-
sources clinics have at their disposal, have succeeded in reducing the
quality and availability of care received by center patients.
RECOMMENDATIONS
Based on our findings, we recommend two immediate, short-term
reforms. First, all health center staff end contract providers engaged in
obstetrical work should be brought under the protection of the Federal
Tort Claims Act (FTCA). This move would save millions of dollars and
provide immediate no-cost malpractice coverage. The FTCA currently
insures both commissioned officers ofthe National Health Service Corps
and National Health Service Corps scholarship graduates who work as
civilian employees of the Public Health Service. Since 1984, health
centers that employ corps physicians have paid some or all of their
salaries with funds transferred to the centers by the service from the
corps account. This fund transfer arrangement has cost corps members
FTCA coverage simply because the name ofthe payer has been changed.
Because the health center payer is a federal grantee and because the
corps member compensated by the center is performing tasks identical
to those performed by health service counterparts, there is no reason to
discriminate between civilian and commissioned corps members em-
ployed by the health service and those employed by federal grantees.
Moreover, there is no reason to distinguish among medical staff hired by
federal grantees—indeed, legislation enacted as part of the fiscal year
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OBSTETRICAL CARE FOR LOW-INCOME WOMEN 75
1988 appropriations act eliminated the distinction between civilian
contract physicians and physicians employed by the Indian Health
Service and extended FTCA coverage to the former.25
By extending FTCA coverage to all medical and health staff working
at health centers, the federal government would! save tens of millions of
dollars that could be reinvested in patient care. In an era of scarce
financial resources, the government simply cannot afford to waste these
funds. We recommend that the act cover not only National Health
Service Corps assignees but also other medical and health staff em-
ployed by centers on a part- or full-time basis.
Second, we believe that a substantial expansion of the National
Health Service Corps is warranted. Even if the immediate financial
burden of malpractice insurance were lifted, clinics would continue to
experience enormous difficulties in recruiting and retaining qualified
personnel, given the areas and populations they serve. Moreover, al-
though the most recent malpractice crisis has decreased the number of
physicians willing to treat publicly insured or uninsured patients (the
vast majority of health centers' patient populations), in fact the problem
of nonparticipation in Medicaid and other public health programs by
obstetricians may be only slightly greater than it was roughly a decade
ago. Thus, the current crisis may be the result of continued high rates of
nonparticipation accompanied by a shrinking pool of obstetricians. In
sum, there continues to be a major need for corps personnel, particularly
in the field of obstetrics. We recommend adding at least 500 physicians
and another 250-500 midwives and other midIeve] professionals. The
savings generated by improved access to maternity care would more
than pay for the outlay for personnel.
We believe that two long-term reforms are also required if the crisis in
access to maternity care is to be remedied. First, we recommend the
establishment of a national task force to draw up the elements of a no-
fault system for obstetrics. The system would include not only a means
for compensating patients but a means for overseeing and enforcing the
quality of obstetrical care practiced in the United States. Whatever
compensation poor women derive from the current malpractice system
(and evidence suggests that they draw little in proportion to the inci-
dents of substandard practice they suffer), both they and their children
would benefit infinitely more from a well-regulated obstetrical system
in which patient compensation was paid in the event of an unintended
· —
nJury.
Second, we feel that no change of this magnitude can occur without
significant reforms in the way physicians are licensed, credentialed, and
monitored, and without uniform rules regarding the content of care and
appropriate practice standards. As Law and Polan have observed inPain
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76 MEDiC~ P~FESSiONAL CITY: VOICE ~
and Profit, the medical care education system is national in scope, as are
the standards of practice to which the public expects physicians to
adhere.26 Medical care no longer stops at state borders but is a vital
national industry. It is essential, therefore, to call a halt to state-by-
state regulation of the accreditation, content, and scope of obstetrical
practice. By permitting individual states (and even individual hospi-
tals) to establish their own qualifying and regulatory standards for
physicians and midIeve] professionals, the federal government has per-
mitted an astonishing array of standards and practices to govern the
scope and quality of obstetrical care.
The "locality rule," which held physicians to community rather than
national standards of reasonable practice, died long ago in the nation's
courtrooms, as Law and Polan have pointed out. It is essential that we
lay to rest as well the locality system for regulating the practice of
obstetrics. We believe the medical profession's failure to recognize the
significance of the demise of the locality rule and its persistence in
treating the regulation of medical practice as a local activity has caused
part of the public mistrust that results in malpractice litigation. Thus,
we recommend the development of national standards for obstetrical
practice and for accreditation of physicians and midIeve] professionals,
as well as uniform monitoring and enforcement mechanisms. Other-
wise, the stage simply cannot be set for the removal of obstetrics from
the current malpractice system.
REFERENCES AND NOTES
1. American College of Obstetricians and Gynecologists (ACOG). 1985. Professional
Liability Insurance and Its Effect: Report of a Survey of ACOG's Membership. Wash-
ington, D.C.
2. Health Care in Rural America: The Crisis Unfolds. 1988. Report to the Joint Task
Force of the National Association of Community Health Centers and the National
Rural Health Association. Washington, D.C., pp. 1-12.
3. ACOG. 1985; see note 1.
4. Sulvetta, M., and K. Swartz. 1986. The Uninsured and Uncompensated Care. Wash-
ington, D.C.: Urban Institute.
5. Gold, R., and A. Kenney. 1985. Paying for maternity care. Fam. Plan. Perspect.
17 (May/June) :103 -111 .
6. General Accounting Office (GAO), U.S. Congress. 1987. Prenatal Care: Medicaid
Recipients and Uninsured Women Obtain Insufficient Care. GAO/HRD-87-137. Gai-
thersburg, Md.
7. Hill, I. 1988. Reaching Women Who Need Prenatal Care. Washington, D.C.: Center for
Policy Research, National Governors' Association, p. 5.
8. American College of Obstetricians and Gynecologists (ACOG), Committee on Health
Care for Underserved Women. 1988. OB/GYN Services for Indigent Women: Issues
Raised by an ACOG Survey. Washington, D.C.
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OBSTETRICAL CARE FOR LOW-INCOME WOMEN 77
9. Mitchell, J., and J. Cromwell. 1983. Access to private physicians for public patients:
Participation in Medicaid and Medicare. Pp. 105-129 in Securing Access to Health
Care: The Ethical Implications of Differences in the Availability of Health Services.
Washington, D.C.: President's Commission for the Study of Ethical Problems in
Medicine and Biomedical and Behavioral Research.
10. GAO. 1987. Prenatal Care; see note 6.
11. Bureau of the Census, U.S. Department of Commerce. Issued annually. Fertility of
American Women. Washington, D.C.: Government Printing Office.
12. Hughes, D., and S. Rosenbaum. 1987. Personal communication.
13. Ibid.
14. ACOG. 1988; see note 8.
15. Ibid.
16. General Accounting Office (GAO), U.S. Congress.1987. Medical Malpractice: Charac-
teristics of Claims Closed in 1984. GAO/HRD- 87-55. Gaithersburg, Md.
17. See, for example, Lazarus, W., and J. Tirengel. 1988. Back to Basics, 1988. Los
Angeles: Southern California Child Health Network; Hoogesteger, J.1987. Obstetri-
cians extend time for indigents. Springfield News-Leader. June 23; Obstetricians'
strike threat uses patients as pawns (editorial). 1987. Providence Journal. Feb. 10;
County's delivery of babies almost extinct say doctors.1987. Sequoyah County [Okla-
homa]. April 12.
.8. Peterson, J., Director of Policy, Washington State Medicaid Agency. 1988. Personal
communication.
Children's Defense Fund. 1988. A Children's Defense Budget. Washington, D.C.
Of rice of Technology Assessment, U.S. Congress.1988. Healthy Children: Investing in
the Future. OTA-t-345. Washington, D.C.: Government Printing Office.
21. Gapen, P. 1988. The Health Service Corps: Endangered species? Med. Health Per-
spect. July 4.
22. The sample was selected from the membership list of the National Association of
Community Health Centers, which includes all federally funded health centers plus a
small proportion of nonproviders, such as individual members and state associations.
Some nonproviders were selected in the initial random sample but were eliminated
from the evaluation.
23. ACOG. 1985; see note 1.
24. National Association of Community Health Centers. 1986. The Medical Malpractice
Claims Experience of Community and Migrant Health Centers. Washington, D.C.
25. Pub. L. 100-102, § 103(c).
26. Law, S., and S. Polan. 1978. Pain and Profit: The Politics of Malpractice. New York:
Harper and Row.
Representative terms from entire chapter:
maternity care
