What ‘Doesn’t’ Happen to Bad Doctors?
You won’t believe it!

It has been well known that a handful of Pennsylvania doctors were responsible for a huge share of malpractice claims. In 1985 the Pennsylvania Medical Society, the Pennsylvania Trial Lawyers’ Association and the state legislature requested professors Alfred E. Hofflander and Blaine F. Nye of UCLA and Stanford Consulting Group (Note 1) to study the malpractice situation in Pennsylvania. Hofflander and Nye found that 228 doctors--1% of the covered physicians--were responsible for 25% of the ten year payout (1975-1985) of the Pennsylvania Medical CAT Fund; 10% of the neurosurgeons were responsible for 47% of the ten year payout for that specialty; and 4% of the orthopedic surgeons were responsible for 45% of the ten year payout for orthopedics.

Hofflander, Nye and Jane D. Nettesheim of Stanford Consulting repeated the study in 2001 and found that 41.5% of the total twenty-five year CAT Fund payout (1975-2000) was made on behalf of less than 2% of the all physicians. An even smaller number, 151 physicians, .027% of all the physicians covered, were responsible for 12% of the total twenty-five year CAT Fund payout. Each of those 151 physicians had four or more paid claims. (Note 2) The study further found, amazingly, that during the twenty-five years it covered, only one physician in the state had his license taken away for incompetence. Furthermore, from January 2000 to the current date, not a single Pennsylvania physician has been disciplined in anyway--even reprimanded--for medical negligence.

So what does happen to bad doctors? Absolutely nothing. The bad doctors do not even have to pay higher insurance premiums for their bad claims history. Hofflander and Nye found in their original 1985 study that, as a result of a deal made with medical insurers, doctors have agreed
to protect their colleagues who had been “unlucky” enough to have lost in court, from having to pay higher insurance premiums; rather, the doctors agreed to spread that loss among all of them. Professors Hofflander and Nye recommended in 1985 that the Pennsylvania Legislature study
experience rate making; however, that recommendation was ignored.(Note 3) This is the reason why you hear of doctors who have never had a claim against them, nevertheless suffering an increase in
premiums. The good doctors are paying for the negligence of their bad colleagues.

1. In 1985 Professors Hofflander and Nye had just completed a study of the failed caps enacted in California in1975; their study led to adoption by California of wholesale insurance reform, Proposition 103.
   
2. Hofflander, Nye and Nettesheim, “Report on the Medical Malpractice Insurance Delivery System in Pennsylvania,” November 2001, page 23.
   
3. Hofflander, Nye and Nettesheim, page 4.