“There is a degree of paranoia laid across the top of all of this like frosting on a cake. All radiologists are concerned that everything they touch is a potential lawsuit. It casts a pall over what you are doing, all of the time.”
–Robert E. Schaaf, MD

According to Lori Bartholomew, MPA, director of research for the Physicians Insurers Association of America (PIAA), in the latest year for which PIAA-member figures are available, 2002, the average radiology malpractice lawsuit payout where the plaintiff prevailed was $340,000 per individual radiologist sued. In 2001 the corresponding figure was $280,000, in 2000, $251,000, and in 1999, $199,000, Bartholomew says.

The figures compiled by the PIAA from its doctor-owned insurance company members clearly show that the pay out per radiology claim is accelerating, Bartholomew adds. It is a pattern common to other specialties as well. “There definitely is a malpractice crisis,” she says. “The severity of the claims has increased a lot. There are higher payments in more and more cases.”

Robert E. Schaaf, MD, says in North Carolina where he practices radiologists are the fifth most commonly sued group of specialists, behind neurosurgeons, obstetrician/gynecologists, orthopedists, and pediatricians.

Schaaf, who is president and managing partner at Wake Radiology Diagnostic Imaging, a 50-physician radiology practice headquartered in Raleigh, says malpractice lawsuits are altering the way radiologists deploy themselves in North Carolina. “The crisis we see is in rural and particularly in the eastern parts of the state: hospitals are having trouble recruiting to small towns. It has always been hard in the small towns, but radiology has become more complex and now they want 24-7. There is a fair degree of liability exposure and not a lot of backup. Radiologists just don’t want to go into that scenario; the price of being a hero is that they may get sued.”

Schaaf says his group has altered some practices. It has quit performing some interventional procedures in the rural hospitals it does cover. “The patients have to come into Raleigh, that’s just the way it is. We have also stopped reading mammography films for other practices. We will not read outside mammograms.”

Premium Pressure

Schaaf sits on the board of directors of Medical Mutual Insurance Company of North Carolina (MMIC), a doctor-owned insurance carrier that provides coverage for about 8,000 physicians, about three fourths of them in North Carolina and the remainder in nearby southern states.

David Sousa is an attorney who spent 10 years defending physicians in malpractice suits before joining MMIC as general counsel in 1996. He has oversight over all the company’s claims, including settlement authority.

Sousa says MMIC’s base-rate premiums ($1 million coverage for any one claim and $1 million for any one client in a single year, typically abbreviated 1/1) have gone up dramatically between 1995 and 2004. General surgeons paid about $18,000 per year for base-rate coverage in 1995; this year the rate is $47,000, Sousa says. “That’s up 161%.” Family practitioners who paid $4,000 in 1995 this year paid $10,000, a 139%   increase. ED doctors, whom Sousa calls the “new whipping boys for malpractice claims,” have seen their rates skyrocket from $9,300 to $26,500, an increase of close to 185%. Emergency department physicians are particularly vulnerable to malpractice claims because they see patients who are already sick and who frequently lack health insurance, Sousa says.

For radiologists, MMIC’s base premiums have gone from $6,300 in 1995 to $15,600 today, a jump of 146%, according to Sousa. He says about 500 radiologists are insured by the company.

“Over the last 5 years, we have paid out approximately $8 million in radiology settlements on 15 claims. The average payment was $506,000,” Sousa says. MMIC, he adds, spent another $1.9 million in successfully defending claims on behalf of radiologists where there was no ultimate settlement. In those cases the average defense cost was $124,000, he says. MMIC had a total of 234 radiology claims filed against its doctors in the 5 years, Sousa says, and 58 of those are still pending.

Sousa says the defense cost per claim MMIC incurs to successfully challenge malpractice suits “is probably at the highest of any company in the industry.” Other carriers might reach a settlement rather than pay the average $124,000 to build a case that prevents a trial for a challenged radiologist, he suggests.

“We have been religiously thorough about defending our doctors when we believe there is no merit to the claim,” he says. “We will not pay unless we believe we are going to lose that case.” He admits this is an expensive philosophy. “At some point it becomes too much to pay.”

Recent studies have shown that it is the severity (settlement payment) of malpractice claims more than an increase in the volume of claims that is driving the growth of malpractice insurance premiums.1 Claim volume is growing, but severity is growing faster.

Sousa explains this trend in terms of MMIC’s experience with all its claims over the past 6 years. “In ’98 we spent $6 million to defend and $18 million in payouts (settlements) for a total of $24 million. Last year we had $15 million to defend and $28 million went to patients. We went from total expenses of $24 million to a total of $43 million in 6 years. That’s why premiums are going up.”

During that same time span, says Sousa, the number of claims per 100 doctors insured by MMIC did not vary. “It remained almost completely flat at between 10 and 11 claims per 100 doctors. The argument from health care is that there are not more bad doctors, but that we’re having to spend more money per case to make the lawsuits go away.”

Like The Airlines

The PIAA’s Lori Bartholomew says the public’s attitudeand therefore a jury’sis that there is a zero tolerance for medical errors. “They compare patient safety to the airlinesit has to be 100% of the time where nothing fails. That is very tough to do. People forget that the patient has a role. The doctor now has to remind the patient to follow up, that they have to help with their own health care.”

Leonard Berlin, MD, says that until the 1950s, most medical malpractice claims were for “acts of commission.” The doctor committed an error. Since then, he says, malpractice claims have focused just as much if not more on “acts of omission.” The doctor failed to take action. “The generic term failure to diagnose’ has taken over in all specialties,” says Berlin. “If you are talking about acts of omission, you are putting the radiologists on center stage. We diagnose, that’s what we do.”

Berlin is a diagnostic radiologist. He is chairman of the radiology department at Rush North Shore Medical Center and a professor of radiology at Rush Medical College, both in the Chicago suburb of Skokie. He tracks malpractice trends and claims assiduously, he says.

Berlin agrees with Bartholomew that the public expects 100% accuracy from doctors. He says that is an impossible standard to meet, one not even reflected in the law, which demands “a standard of care that is reasonable.

“What would a normal radiologist do? The question to be asked at trial is not if you missed something, but could a reasonable radiologist have read that film the way that you did? The standard of care is not to make the correct diagnosis on every film, but that is the perceived standard.”

Failure To Communicate

Berlin estimates that failure to diagnose is the basis for perhaps 75% of malpractice suits against radiologists. But he says 25% of lawsuits allege additionally or independently a failure on the part of the radiologist to communicate his or her interpretation to either the referring physician or the patient.

“We have our ACR (American College of Radiology) standards that say if a radiologist sees a significant but unexpected problem on an image, there should be direct communication, either on the phone or in person, with the referring doctor,” Berlin says. “The radiologist finds that hard to do. We are too busy. The referring doctor can’t be reached on the phone. There are many cases where we see an abnormal shadow. Do we have to make that phone call on every questionable abnormality? The radiologist will say, There’s no way I can spend all day on the phone.'”

But Berlin argues the risks are too great from a lawsuit standpoint not to have someone on staff make the call.

“If that abnormality turns out to be cancer and the referring physician says, I can’t find that report’, that can become a lawsuit.

“The sad part is the communication problem should be easy to fix. There is communication software out there that can keep those records, but none of it has hit the mainstream yet. When it comes to systems, medicine is very far behind the corporate world. We’re lagging when this should be easily solved.”

Bartholomew agrees that communication is a major problem. She estimates that half of all malpractice suits against radiologists involve failure to communicate in some way. “We still see the same documentation problems, misfiled letters, film read backward. We need systems to make these things idiot-proof.” But she is less sanguine than Berlin that electronics will solve the problem. “People get too much email already,” she says. “You just can’t deal with it all.”

Mammography Impact

Because she works for an association whose member insurance companies cover 90,000 doctors directly, Bartholomew can see the big picture. She says malpractice claims are having a deleterious effect on the provision of mammography. This is hardly big news, but the figures are sobering.

“Breast cancer is by far the highest area of malpractice claim loss for radiologists,” she says. “The top three radiology malpractice categories for us in 2002 were coming in with breast cancer, screening for breast cancer, or some other disorder that later turned out to be breast cancer. These made up one third of our [radiology] claims; it was 43 out of 122 for 2002.

“And, where radiologists paid on 30% of all claims, on breast cancer claims they paid on 50%. In our world we see a lot of women with disastrous breast cancer. They get high payments, especially if they’re mothers with kids.”

As a result, Bartholomew says, mammographers pay dearly for malpractice coverage and sometimes find it hard to obtain. “I hear from doctors all the time who tell me, We’re the only group left reading mammo. We read 10,000 studies per month.’

“This puts a big burden on that one group. I think we are going to see a lot more cases of failure to diagnose breast cancer, at a time when the demand for mammography is increasing.”

Berlin says that last year about 700 mammography clinics around the country were closed. He bases that figure on data from the ACR. “It’s hard to say if all those closures were for malpractice reasons,” he says. “We assume anecdotally and intuitively that it was the result of malpractice but it’s hard to prove.”

As Schaaf has already noted, it is not just mammography that is being impacted by rising malpractice premiums. Hospitals are facing higher premiums too, and Schaaf cautions radiologists to be careful what they get themselves into when signing contracts with hospitals. Radiologists must guard against being assigned radiology department directorship duties unless hospitals or clinics adjust malpractice coverage for that added exposure, he warns.

“The business community and nonradiologists are getting into radiology as facility providers,” he says. “The radiologist has got to be careful if he is asked to be medical director. You have to make sure that position has liability coverage. It’s not under most policies.”

MMIC’s David Sousa voices the same concern. “More and more what we see is that hospitals are forcing radiologists to assume the role of medical director of the hospital radiology department. The hospital is trying to shift the overseeing of radiology technicians to the radiology medical director.”

Sousa says radiologists faced with this situation need to make certain either that the hospital provides additional coverage or that, in the event of a lawsuit, the hospital agrees to pick up the cost of defense. “The shift in [directorial] responsibility to one of their doctors is a real problem for radiology groups.”

What Can Be Done?

Reports on the malpractice “crisis” number in the thousands. Figures are not congruent by any means, nor are suggestions for curing the problem consistent. In Florida, where it is legal with a $250,000 bond, doctors can practice without malpractice insurancego bareif they notify their patients.2 Other states require doctors to carry malpractice insurance in the same way that drivers must carry auto liability policies.

Suggested cures for the malpractice crisis often include a multi-pronged attack that targets repeat offender doctors, sets up committees to deal with frivolous lawsuits, and promotes quality controls that reduce medical errors.3

Lewis Sharps, MD, is an orthopedic surgeon who practices in Pennsylvania, where doctors have been storming the statehouse and threatening to move away if they do not get some relief from spiraling malpractice premiums.

“Medical malpractice premiums have gone up more than 100% in the past 3 years in Pennsylvania,” Sharps says. “Physicians as a whole in Philadelphia paid more in malpractice settlements last year than were paid in the entire state of California. A high-risk specialist in Philadelphia can expect a yearly premium of $70,000 to $150,000, and more if there are claims against him.”

In 1992 Sharps formed a political action committee to lobby for change. In 2000 he formed a doctor-owned risk retention group (RRG) that now writes insurance policies for 115 physicians, most of them orthopedists. He says the savings are in the 10% to 25% range on premiums. The RRG covers the first $250,000 in exposure and then reinsures with commercial carriers for additional coverage of $500,000 for each claim and $1.5 million overall per year per doctor.

In malpractice, like medicine, prevention costs far less than cure, so Sharps’ RRG has instituted a program of requiring that each of its doctor clients “designate a risk management coordinator within the practice,” he says.

“The risk manager’s job is to notify the insurance company of any potentially compensatory event.” Sharps adds. “There is a certain percentage of outcomes that aren’t perfect. We track these. Sometimes we intervene. We will track the patient to make sure they are satisfied with their care.”

California’s Model

What Sharps really wantswhat most respondents for this story call foris a federally imposed lid on the amount a plaintiff can collect for so-called noneconomic or “pain and suffering” damages. Currently, 19 states have imposed capitation limits on how much a plaintiff can receive for non-economic damages. One study estimates medical insurance premiums in states with caps are 17% lower than in states without caps.4 The trouble with state-by-state capitation is that the caps vary considerably and the laws are continually subject to state constitutional challenges.

That is why Sharps and others want federal caps and related malpractice controls. California’s MICRA legislation is considered the pertinent model.

In 1976, California legislators approved the Medical Injury Compensation Reform Act, which in its central provision capped noneconomic awards at $250,000. One report estimates that while California’s malpractice premiums from 1976 to 2000 rose 167%, premiums by comparison in Nevada rose 2,468% and in Florida, 2,653%.5

Sharps says caps work. “There is absolutely no doubt you have to cap on the $250,000 level,” he says. “It is a proven solution and will reduce rates by a minimum of 20% to 30%.”

When President Bush made a call for such caps recently, Sharps was overjoyed. “This has been the only administration in my lifetime that has said spiraling malpractice costs are a cost driver for Medicare. This is the first administration that has taken on the trial lawyers&.The most important thing is to take the financial incentive out of the malpractice business.”

To achieve that, other tort reform steps beyond just caps are being advocated. According to Schaaf, there are four steps: Capitation of noneconomic damages; computing any collateral insurance a plaintiff may have in defining the settlement; structuring payments so that a plaintiff receives the settlement a piece at a time; and imposing some limits on lawyers’ contingency fees.

“It should be structured so that the larger the settlement, the lower the percentage the lawyer receives,” says Schaaf. “Right now, the lawyers, expert witness, and the court system take about 57 cents out of every dollar.”

Sousa advocates a “malpractice tax” be put on a patient’s bill that would effectively repay the doctor’s malpractice premium. He acknowledges that such a tax would require legislative approval. “There needs to be some mechanism for passing on costs,” he says. “The HMO now says all you can charge is what we are reimbursing.”

Says the PIAA’s Lori Bartholomew, “We are big advocates of tort reform. It is just becoming a runaway system.”

“You don’t see trial lawyers going to other countries for medical care,” says Sharps. “We have the finest health care in the world in this country.”

Can Nighthawks Fly?

Hikes in malpractice premiums have already changed radiology practices. Insurers may soon begin to curtail the volume of images radiologists read, at least without paying for the privilege of exceeding a stipulated volume. Using overseas nighthawk radiologists may also become a no-no with insurance carriers.

“A minus we think is the emergence of teleradiology where images, for example, may be sent for reading to Melbourne, Australia,” says David Sousa, general counsel for the Medical Mutual Insurance Company of North Carolina. “That is a technical area we think is fraught with increased [malpractice] risk. We don’t like to insure groups who use those nighthawk services. In the past we may have allowed some. We haven’t seen any claims yet, but we want to be proactive. We haven’t closed them off yet, but that step is under consideration as we speak by our underwriting department.

“Increasingly, we are having to make more and more unpopular decisions relative to the doctors that we insure. At some point we may have to limit the number of reads a radiologist is doing per day. Our rates for obstetricians are based on the number of deliveries per year. For radiologists, the number of reads might impact their premium rate or their insurability,” adds Sousa.

-G. Wiley

Witness or Turncoat?

“Without an expert witness the car don’t run,” says Leonard Berlin, MD, of Rush North Shore Medical Center near Chicago. “The expert witness is the engine.”

Robert Schaaf at Wake Radiology in Raleigh, NC, calls a typical medical malpractice case “an arms race to see who’s got the most witnesses.”

Berlin says it is natural for a witness to want his side to win. Nonetheless, he says, witnesses need to be truly expert. And they need to testify honestly. Berlin has himself testified. “If a radiologist has breached reasonable conduct, I’ll testify against him,” he says, “but if he has been reasonable, I’ll support him. Many cases I get asked to review, I’ll just tell them, ‘I can’t help your cause.'”

But professionally monitoring witnesses with an eye to censure is one step advocated as a way to control runaway malpractice judgments.

“It is important that state societies begin to look at memberships and those physicians who testify on behalf of plaintiffs and who do so at the risk of the truth. They need to be disciplined,” says Lewis Sharps, MD, a Pennsylvania orthopedist who founded a company to insure doctors. “Neurosurgeons are reviewing their members who testify as to validity.”

Sharps says the intent is to dismiss those who testify falsely from membership in the professional society. “There are two sides to that,” he acknowledges. “It’s expensive to do, and the physician who is censored will run to lawyers of his own.”

-G. Wiley

eJ’accuse? Touche!

Tired, fed up, and not going to take it anymore? A Dallas-based radiologist has launched a nationwide database, DoctorsKnow.Us, for the purpose of protecting physicians against litigious patients, according to an article in the Wall Street Journal.

“People are going to find that if they sue doctors, they are going to find their access to health care is limited,” Dallas-based John Shannon Jones, MD, DoctorsKnow.Us founder, told the Journal reporter.

Does the site inherently violate the Hippocratic oath to do no harm? According to the article, William G. Plested, chairman of the board of trustees of the American Medical Association, has maintained that doctors are not required to see a patient in a nonemergency situation, particularly if there is not a level of trust between doctor and patient.

The database costs $4.95 a month to access, and, in addition to providing names of plaintiffs and their attorneys, the site offers physicians under attack with immediate gratification in the ability to add the names of their accusers to the database.

George Wiley is a contributing writer for Decisions in Axis Imaging News.


  1. Conn J. Risk-study projections shed light on med mal drivers. Modern Physician. January 28, 2004.
  2. Silverman RE. So sue me: doctors without insurance. Wall Street Journal. January 28, 2004.
  3. American Medical Student Association. Available at: www.amsa.org/hp/ medmalpractice.cfm. Accessed February 20, 2004.
  4. Thorpe KE. The medical malpractice crisis’: recent trends and the impact of state tort reforms. Health Affairs. January 21, 2004.
  5. Brenner RJ, Smith JJ. The malpractice liability crisis. JACR. 2004;1:18-22.