Medical Officials Call for Birth Injury Fund to Combat High-Cost Malpractice Lawsuits

By Megan Brockett

BALTIMORE (March 12, 2014)—Warning of a looming crisis in health care access for pregnant women in Maryland, some medical officials are urging lawmakers to consider a “no-fault birth injury fund” that would help alleviate mounting pressure placed on hospitals and birthing centers by multimillion-dollar malpractice lawsuits.

The measure would allow families of babies who suffer neurological injuries during birth to sidestep the lawsuit process and seek compensation directly from a statewide fund paid for by hospitals, doctors and malpractice insurers.

Advocates say the existence of such a fund would ensure that victims receive the care their injuries demand while preventing exorbitant lawsuit awards that threaten to sink obstetrics units and reduce statewide access to maternity health care.

“More babies who suffer birth injuries will get the lifetime care they need because acceptance into the program is based on the injury, not the outcome of a lawsuit,” Sen. Catherine Pugh, D-Baltimore, said during a recent Senate Judicial Proceedings Committee hearing.

Pugh, who initially called for the establishment of a birth injury fund, is now sponsoring a measure that would set up a task force to study the issue first instead. Delegate Dan Morhaim, D-Baltimore County, a physician, is sponsoring the same measure in the House.

Medical officials from organizations like Mercy Medical Center and Johns Hopkins Medicine have said that high jury awards in recent birth injury cases have threatened the state of obstetrics units across Maryland.

At a legislative hearing, Dr. Andrew Satin, director of gynecology and obstetrics at Johns Hopkins, warned lawmakers about the “a crisis looming in access to obstetric care.”

“Over the last 24 months, juries in Baltimore City and Prince George’s County returned verdicts relating to births against hospitals for $55 million, $22 million, $18 million, $15.6 million and $9.5 million. The magnitude of these awards have had an immediate effect on the liability climate in Maryland,” Satin said.

Susan Kinter, a vice president at the Maryland Medicine Comprehensive Insurance Program, a partner of the University of Maryland Medical System, said that hospitals already facing thin or non-existent operating margins are considering whether it is worth the risk to keep open their obstetrics units, which have high costs and inherently high medical malpractice risk.

Satin and others pointed in warning to the Philadelphia region, where more than 20 hospitals have closed their obstetrics programs.

But opponents deny that any such crisis in women’s health care is headed toward Maryland and argue that the large size of recent judgements in birth injury cases is due to the rising cost of health care and what it takes to provide a lifetime’s worth of care for a person with a neurological birth injury.

Some added that drawing a comparison to the situation in Philadelphia is dangerous because Pennsylvania has no cap on non-economic damages in medical malpractice cases to limit the amount plaintiffs can receive. In Maryland, a cap on non-economic damages was set at $500,000 in 1994 and pegged to rise $15,000 each year since 2009. It is now $740,000, according to a legislative analysis.

Many critics of the birth injury fund also disputed the relevance of the malpractice cases cited by Satin and others, pointing out that many of the awards mentioned had been overturned or reduced significantly following the judgements.

But Dr. Cyrus Lawyer, medical director of the metropolitan practice at Mercy’s Family Childbirth and Children’s Center, said high-cost birth injury cases are using up much of the hospital’s insurance.

“If these lawsuits continue, they are putting us in a position [where] we won’t have the insurance [to pay for them] because we are self-insured,” Lawyer said. “If they continue to use up the money for the insurance, and one department is using all that money, the board of trustees has emphatically stated that we can’t let one department, … OB-GYN, drag the hospital down.”

The threat creates a potential crisis in terms of access to quality maternity health care that would disproportionately affect low-income women, according to proponents of the birth injury fund.

In Baltimore, where many low-income residents are without a car, some women would be left facing stark obstacles were Mercy to close the doors of its obstetrics unit.

Dr. Susan Dulkerian, medical director of newborn services at Mercy, said there is rarely a woman today who doesn’t visit an obstetrician, usually several times, before delivering a baby. It’s a vast improvement from the early part of her career at Mercy in the early 1990s, when fewer women were getting adequate prenatal care, and it’s led to better outcomes for babies in Maryland, she said.

But Dulkerian, who supports the creation of a birth injury fund, said she worries what will happen if the high-cost lawsuits continue. She thinks it’s a “realistic potential” that hospitals will shut down their obstetrics unit as a result of the current malpractice environment, which would lead to less prenatal care and a potential increase in birth injuries.

“Where will these women go to deliver?” Dulkerian said. “These aren’t women that have their own vehicles, easy access to other facilities, and that’s why their neighborhood facilities are so important to them getting health care. And if these institutions simply can’t afford to keep that service open and putting everything else the hospital does at risk, then they unfortunately may have to make that difficult decision.”

Even before the addition of the amendment to first convene a task force, both the House and Senate versions of the measure had strong backing from Baltimore area lawmakers, both Democrats and Republicans. Of the more than 30 senators and delegates signed on to the legislation as of last week, roughly half represent Baltimore City or Baltimore County, and nine are Republicans.

Advocates argue that low-income residents are also less likely to have the means to engage in a medical malpractice lawsuit, and therefore less likely to receive compensation without a birth injury fund.

Under the current proposal, a birth injury fund in Maryland would cover brain or spinal cord injuries that cause death or a “permanent and substantial mental and physical disability that results in a permanent need for assistance.”

Three states have birth injury funds, including Virginia, and Lawyer said an additional harm caused by the absence of any such policy in Maryland is the loss of the state’s medical students to states that offer better protections for doctors.

The OB-GYN unit at Mercy, Lawyer said, has been struggling for the last two years to fill two openings for physicians.

Mary Louise Preis, a member of Mercy’s board of trustees since 2008 and a former member of the Maryland House of Delegates, said that she doesn’t see the possibility of having to close Mercy’s obstetrics unit as an immediate risk. But it is a “fear” held by board members, Preis said, and likely one being taken seriously by hospitals across the state.

“This is not something that can be ignored,” she said.

“These things can be compounding, and it’s not just Mercy. Many hospitals, all the hospitals that do obstetrics and have birthing units, have faced or will face similar situations, “ she said. “The question is, ‘When do you begin to tackle the solutions?’ … I think Mercy and a few other hospitals feel that it’s time to bring it to the public with some options.”

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