What Changes Are Occurring in Obstetrical Practice?

The literature indicates that sizable numbers of obstetrical providers—both obstetrician-gynecologists (ob-gyns) and family practitioners—are eliminating obstetrics from their practice, reducing care to identifiable high-risk populations, or reducing the overall number of deliveries they perform (Table 1).

TABLE 1

Summary Data (as percentage) from Studies of Professional Liability and Obstetrical Practice.

• Elimination of obstetrics: The American College of Obstetricians and Gynecologists (ACOG) reports that in 1987 12.4 percent of its members stopped practicing obstetrics as a result of professional liability concerns; the state surveys report that from 7 to 70 percent of responding physicians have stopped. In the median state, 25 percent of all surveyed obstetrical providers have stopped practicing obstetrics. The studies that surveyed ob-gyns alone report that from 6 to 30 percent of respondents stopped obstetrical practice. In the median state, 17 percent of ob-gyns reported eliminating obstetrics. The attrition rate among family practitioners is higher than that among ob-gyns. The American Academy of Family Physicians (AAFP) reported that, by the end of 1985, 23.3 percent of its members—twice the proportion reported by the ACOG—had stopped practicing obstetrics because of malpractice concerns. The state studies reported that from 8 to 75 percent of family practitioners had dropped obstetrics over the past five years. Seven of the studies allowed direct comparison of changes between family practitioners and ob-gyns. In only one (Maryland) was the proportion of family practitioners stopping obstetrics smaller than the proportion of ob-gyns stopping this part of their practice.
• Reduced care for high-risk women: The state studies report that from 16 to 49 percent of ob-gyns reduced service to high-risk women. In the median state, almost one-quarter of ob-gyns reduced or eliminated service to this population. This figure is similar to that reported by the ACOG: in 1987, 27 percent of its members reduced or eliminated services to high-risk women.
• Reduced volume of obstetrical care: This is perhaps the most difficult practice change to document from the state studies. Only eight of them report on this subject, with 6 to 28 percent of physicians saying they were reducing the number of deliveries they perform. The median was 18.5 percent. By comparison, the ACOG reported that about 13 percent of member ob-gyns reduced their volume of care in 1987; the AAFP reports reductions by less than 10 percent of member family practitioners.

The state studies tend to show higher proportions of physicians altering their practice of obstetrics than do the ACOG and AAFP data. This disparity may reflect methodological differences among the state and national studies, but it may also reflect real geographic variation in physician behavior. It is logical to expect that studies would have been conducted in those states in which malpractice issues have been particularly critical to the profession.

Are These Changes Occurring Because of Professional Liability Concerns?

Physicians consistently report that they are reducing or eliminating their obstetrical practice because of the cost of malpractice insurance or the risk of being sued. Although the precise numbers reported should be viewed with caution, the direction of these responses is too compelling to discount as an artifact of survey construction.

• Twenty-nine studies report that between 9 and 99 percent of all physicians surveyed have changed their obstetrical practice because of professional liability issues. The studies were subdivided into those reporting on all physicians and those reporting on physicians who had made practice changes. In the median state, more than half of the physicians who changed their practice said that malpractice concerns were a major factor in their decision (Table 2).
• In studies in which the question of motivation was separated from the act of changing obstetrical practices, professional liability issues were cited by more than half the respondents as a major determinant in their decision to change. In Georgia, for instance, 55 percent of ob-gyns dropping obstetrics cited malpractice concerns as the sole reason for their decision. In Illinois, 57 percent cited malpractice insurance costs and 44 percent cited the risk of being sued. In Kentucky, 78 percent of family physicians stopping obstetrics and 38 percent of those reducing their caseloads cited malpractice concerns.
• Studies of family practitioners have tended to provide respondents with the broadest range of choices for describing their motivation. These studies show a greater influence of personal factors—but malpractice concerns are of equal or greater importance. Although the Alabama, Ohio, and Washington reports found that 25 to 50 percent of respondents cited personal or professional concerns (age, health, time, lack of alternative physician coverage), 50 to 70 percent of respondents cited malpractice issues as a key factor in their decision.
• Only one study (Ohio) included statistical tests on the relationship between malpractice concerns and the decision to stop practicing obstetrics. The relationship was found to be statistically significant.

TABLE 2

Physicians Reporting Malpractice Issues as a Factor in Their Decision to Change Practice (as percentage).

Summary

It is clear that major changes are occurring in the practice of obstetrics. A sizable number of physicians are eliminating or reducing obstetrical services and reducing services to high-risk women. Most physicians cite malpractice-related issues as a principal factor in their decision.

Certainly, the importance of malpractice concerns as the sole determinant of physician behavior may be overstated. Even apart from the wording of questionnaires, the current climate, both within the profession and among the public, is one in which the "malpractice crisis" is accepted as a rational explanation for the decision to stop or reduce provision of obstetrical services. For some physicians who are considering changing their practice for personal reasons, malpractice may simply be the factor that finally tips the balance. Nevertheless, the sheer weight of reports from physicians indicates the importance of malpractice concerns in their decisions to eliminate or reduce obstetrical care.

Access for Medicaid Recipients and Low-Income Women

All of the studies that asked physicians specifically about care for lowincome patients reported declines in provider participation.

• In Illinois, 17 percent of physicians practicing obstetrics plan to reduce participation in Medicaid. Almost two-thirds of Washington ob-gyns limit the number of Medicaid patients they serve. In West Virginia, 41 percent of ob-gyns (compared with an average of 18 percent for all physicians) report that they do not serve Medicaid patients owing to liability concerns.
• Almost 13 percent of Oregon obstetrical practitioners stopped serving Medicaid patients during 1986-1987; another one-third specifically limit their Medicaid caseloads. About 10 percent have recently stopped providing charity care, and more than 40 percent limit the charity care they provide.
• Only 45 percent of Kentucky physicians serve Medicaid obstetrical patients. Three-quarters of the physicians who have reduced their provision of obstetrical care cite malpractice issues as a reason for nonparticipation in Medicaid. Only one-third of Maryland ob-gyns accept Medicaid.
• In January 1987, 133 physicians in Denver provided obstetrical services to Medicaid patients; the state Medicaid program reported that, by December of that year, only 9 (apart from hospital-based personnel) were still providing such care. In the entire state of Colorado, only 46 primary care physicians were accepting Medicaid obstetrical patients in December 1987.⁵
• In Texas, indigent women on average constitute 10 percent of the ob-gyn caseload. About one-third of ob-gyns report that they are limiting indigent care "a great deal"; another one-third are not limiting care at all.
• More than half the ob-gyns in North Carolina had been providing services in local health departments. Almost 30 percent reported stopping because of malpractice concerns.

One effect of reduced physician involvement in Medicaid is that caseloads for those who continue to provide care are increasing. In Washington State, the average number of deliveries per Medicaid provider rose from 14.8 in fiscal year 1985 to 16.8 in fiscal year 1986. Although the number of participating ob-gyns actually increased slightly, the number of participating family and general practitioners fell by 9.3 percent. At the same time, the number of Medicaid deliveries increased. As a result, the average number of Medicaid deliveries for ob-gyns rose from 26.4 in fiscal year 1985 to 28.3 in fiscal year 1986. For family physicians, the increase was from 7.5 to 8.3 deliveries (Table 3).

TABLE 3

Changes in Deliveries by Medicaid Maternity Care Providers in Washington State, 1985-1986.

A recent National Governors' Association survey of state Medicaid and Maternal and Child Health agencies includes at least one response from each state (the District of Columbia did not respond). This report therefore may provide the broadest overview of the impact of malpractice concerns on access to care. According to the administrators of public programs, malpractice issues are reducing significantly the number of participating providers, and some areas of their states are experiencing major problems in access to care.⁶

• More than 60 percent of Medicaid programs and almost 90 percent of Maternal and Child Health programs are experiencing significant difficulty in finding providers who are willing to render maternity care. Nine out of ten programs say that rising malpractice insurance costs have contributed to this problem.
• Three-fifths of the agencies reported that physicians have stopped providing care to their clients because of malpractice concerns. Seven out of ten agencies said that the number of providers was decreasing for that reason.
• In response to an open-ended question, 21 states reported at least 484 counties in which low-income women, Medicaid recipients, or both have limited access to prenatal and delivery services. Because this information was not specifically requested in the questionnaire, responses may understate the extent of the problem.
• About half of the agencies regarded low reimbursement rates as the primary deterrent to provider participation in their programs. One-fifth considered malpractice insurance costs the most important reason.

Access to Care in Rural Areas

Family practitioners have traditionally been key providers of obstetrical care in rural areas. The high rates at which these physicians are leaving obstetrical practice appear to be generating significant access problems in some parts of the country.

• It is estimated, based on data from the AAFP and the ACOG, that the number of obstetrical providers in nonmetropolitan areas has fallen by about 20 percent over the past five years. This decline is particularly significant among family physicians (Figure 1).
• In 1986, 17 counties in Georgia had no obstetrical providers; there were only 25 physicians providing obstetrical care in all of rural Nevada.
  One-third of Arizona's family physicians outside Maricopa and Pima counties (Phoenix and Tucson) had stopped providing obstetrical care by the end of 1985. In Idaho, more than one-quarter of ob-gyns have dropped obstetrics; in West Virginia, another largely rural state, more than half the ob-gyns have considered leaving the state.
• Rural physicians perceive a greater potential impact on access to care than do urban physicians. In California and Oregon, a greater proportion of rural physicians reported women without access to care. Although more physicians have stopped obstetrical practice in Detroit than in rural Michigan, 69 percent of rural physicians report access problems, compared with 61 percent in Detroit.
• A 1985 survey of small and rural California hospitals reported that 30 of 56 respondents providing obstetrical care had family physicians on their staff who were planning to drop obstetrics. Thirty-six of the hospitals (64 percent) indicated that they would cut back or eliminate their obstetrical services.
• Sixty of the agencies responding to the National Governors' Association survey reported geographic areas with significant access problems—and 87 percent of these reported that the access problem was particularly acute in rural areas. Thirty-five of the 50 states reported problems with provider participation and access to care in rural areas.

Figure 1

Changes in number of rural physicians practicing obstetrics.

Summary

As a whole, the literature suggests that professional liability concerns among physicians are generating access problems. In instances in which attrition from obstetrical practice has been great, caseloads for the remaining physicians increase, as suggested by the experience in Washington State. This trend creates a vicious circle, wherein physicians who continue to accept Medicaid patients experience greater pressures on their time—possibly to the point where they need to begin restricting their Medicaid practice. With fewer physicians providing obstetrical care, the low-income patient or Medicaid recipient, who may be perceived as less financially, socially, or medically desirable, can end up competing with a middle-class patient for the physician's time.

Although reduced availability of care for high-risk patients affects the entire population, it has particular implications for low-income women. These women are statistically more likely to be medically at risk and have higher rates of infant mortality and low-birthweight babies. This population requires easier access than the general population to the kind of care appropriate for high-risk mothers; yet that care appears to be less widely available to them.

Every study that looked at the relationship between malpractice concerns and Medicaid found that physicians report that they are reducing their Medicaid caseloads, at least in part, because of malpractice concerns. The state agencies, which must rely on these physicians to render care to their clientele, report significant problems in recruiting and retaining providers. In a number of counties, clients of public programs are experiencing difficulty in obtaining care. Although Medicaid payment rates, traditionally the primary deterrent to physician participation, continue to be a significant drawback, many providers cite malpractice issues as a key reason for not serving low-income patients.

Although the causal relationships among malpractice issues, changes in obstetrical practice, and access to care for low-income women and rural women cannot be precisely documented with the available data, the weight of the evidence is in one direction. It is reasonable to conclude that access to care for Medicaid and other low-income women is being affected by changes in obstetrical practice generated by professional liability concerns.

Cost of Insurance Coverage

The rise in malpractice insurance premiums has intensified traditional provider concerns about low rates of Medicaid reimbursement for services. The argument is phrased in two ways. The first contends that payments are too low to cover the costs of malpractice coverage. The second maintains that, in the face of rising malpractice insurance costs, physicians must devote more time to private patients to meet expenses.

It is important to understand that how much a provider must charge to meet all expenses, including malpractice insurance, is difficult to ascertain—and depends to some extent on the net income desired by the practitioner. The ACOG reported that in 1986 malpractice premiums represented 20 percent of the average ob-gyn's overhead; the ACOG also reported that premiums represented 10.3 percent of gross income in 1986, compared with 9.7 percent in 1984.⁷ Thus, although malpractice premiums rose 46.7 percent in the two years, the proportion of gross income devoted to malpractice insurance rose by only 6.2 percent. This differential must have been covered by increasing charges to private patients.

Because family practitioners tend to have many fewer obstetrical patients than do ob-gyns, for them the higher premiums may pose a clear economic choice. Table 4 uses data from the state of Washington to illustrate this point. Family physicians who do obstetrics paid an additional $9,000 for obstetrical coverage; ob-gyns paid an additional $11,000 above premiums for gynecology-only. The family physician performing 30 deliveries a year (the median number) paid $300 per delivery for insurance. Ob-gyns, because of their much larger volumes, had much lower premium costs per delivery. An ob-gyn with the median number of deliveries (121) paid about $93 per delivery for obstetrical malpractice coverage.

TABLE 4

Estimated Additional Malpractice Premium Cost Per Delivery, Family Physicians and Obstetrician-Gynecologists in Washington State, 1986.

Few would disagree that Medicaid programs generally pay providers at rates well below those of private insurers or the average community charge. In 1986 the average Medicaid reimbursement for total obstetrical care rendered by an obstetrician-gynecologist was $550, ranging from $214 to $1,508. Data from 36 states show that Medicaid payments averaged 44 percent of the approximate community charge for prenatal care and routine delivery. The highest state paid 76 percent; the lowest, 14.8 percent.⁸ In many cases, these rates represent major increases over prior years because at least 20 states increased payments between 1984 and 1986. Additional increases are being considered—and enacted—by states, particularly those that are adopting the expanded Medicaid coverage options for children and pregnant women available under the Budget Reconciliation Act of 1986.

The problem of low reimbursement rates is complex, reflecting pressures on state budgets, competition among provider types for improved coverage and payments, and general state philosophies regarding Medicaid. The question of whether Medicaid reimbursement should reflect the rising costs of malpractice insurance is even more complicated. Should Medicaid reflect the full cost of malpractice coverage? Insurance premiums do not vary with caseload; therefore, one could reasonably argue that service to Medicaid patients is a marginal cost and payments that do not reflect the full cost of coverage are not necessarily unreasonable. If Medicaid reimbursement policies were revised to assume part of the cost of malpractice insurance directly, should these costs include only the obstetrical portion of the premium?

Fear of Litigation

Although insurance costs have been the focus of policy debate, particularly at the state level, risk aversion, or the fear of suit, is an equally strong motivating factor for physicians. Nobody wants to be sued or to have to defend his or her professional abilities in court. Even when the physician wins the case, the psychological impact of having been sued is enormous. Seven out often ob-gyns are likely to be sued in the course of their professional lives. Although family physicians are sued less frequently, they may feel more vulnerable because of their less specialized training. The physician's desire to manage his or her individual risk and to avoid situations that might lead to litigation is a normal human response to the current climate.

For low-income women and women covered by Medicaid, access to care may be affected as much—or more—by physicians' fears of suit as by reimbursement rates. As previously noted, low-income patients tend, statistically, to be at greater medical risk; they also tend therefore to be more affected by reductions in the provision of care to high-risk women. In addition it is possible, although difficult to document, that physicians perceive the reduction of care to Medicaid and low-income women as an effective means of reducing their exposure to high-risk patients.

Managing high-risk pregnancies requires a commitment to continuity on the part of patient and physician. If the physician believes that this commitment may not be forthcoming, he or she may be less willing to initiate service. It may be easier for the physician to stop serving Medicaid patients altogether than to attempt to make such judgments (if desired) on an individual basis.

It is ironic that the very factors that call for increased access to care can also intensify a physician's sense of risk when serving low-income patients. The extent to which low-income women receive late or no prenatal care and are therefore at greater risk has been well documented. Indeed, such data are at the heart of the Medicaid expansions recently established by Congress and are the focus of such groups as the National Commission on Infant Mortality Prevention. Yet it is precisely this information that may underlie a physician's sense that service to low-income and Medicaid patients increases the risk of malpractice litigation.

A final issue, which calls for more extensive discussion, is the notion that ''the poor sue more." The extent of this belief among physicians is not known, but anecdotal information suggests the belief is held by a significant minority.

This issue raises questions of both phraseology and fact. Does "the poor" refer just to Medicaid recipients or to any low-income person? How is "poor" defined in terms of income? It is possible that the concept of "the poor" is defined by individual perceptions, which could be flawed. The phrase "sue more" could mean that the poor sue more frequently than the rest of the population at risk. Does it mean they bring more "frivolous" suits? If the poor do sue more frequently, is it because they are at greater risk of malpractice incidents than the nonpoor?

To analysts, the statement "the poor sue more" seems almost counterintuitive. The legal literature indicates that the low-income population generally has less access to the legal system—a fact that would lead one to expect the poor to "sue less." Because malpractice actions are frequently brought on a contingent fee basis—and awards are usually based on lost earnings—attorneys should have less financial incentive to take cases for the poor.

Currently available data provide very limited information on the relation of income to malpractice suits. The Department of Health, Education, and Welfare's Commission on Medical Malpractice found in 1973 that greater numbers of "negative medical incidents" were associated with higher incomes (the study did not examine claims rates).⁹ A study in Cook County, Illinois, in the 1970s found that black plaintiffs constituted almost 25 percent of the county population but accounted for only 11 percent of malpractice suits.¹⁰ A 1986 study by Weismann and colleagues also found a negative relation between service to minority patients and a physician's likelihood of being sued.¹¹

Five studies that specifically examine Medicaid recipients and malpractice litigation arrive at conflicting results.

• Studies of closed claims from malpractice insurers conducted by the U.S. General Accounting Office (GAO)¹² and by the State of Maryland showed that Medicaid recipients brought suit in roughly the same proportion as their numbers in the population. The GAO analyzed a sample of all claims; 5.8 percent were brought by Medicaid patients, who account for about 9 percent of the U.S. population. Average expected payout for a Medicaid plaintiff was almost $25,000; the payout for the average privately insured patient was almost $250,000.¹³
• In Maryland, Medicaid recipients accounted for about 13 percent of ob-gyn service claims between 1977 and 1985. In 1986 Medicaid recipients constituted about 19 percent of obstetrical admissions to Maryland hospitals.¹⁴
• A nationwide survey of ob-gyns regarding fertility-control services asked several questions about malpractice experience. The study found no significant correlation between Medicaid participation and threatened or actual malpractice litigation.¹⁵
• Two surveys of providers found higher rates of litigation among Medicaid patients. Respondents in the 1986 Washington State survey of physicians said that 26 percent of their reported malpractice suits had been initiated by Medicaid recipients, whereas Medicaid patients accounted for only 17.6 percent of their practices. Recently, the ACOG reported on a nationwide survey of hospitals' malpractice claims in 1982. Hospitals reported that Medicaid patients represented 17.1 percent of deliveries but initiated 24.8 percent of malpractice claims (this finding was not statistically significant).¹⁶

The data that are currently available neither substantiate nor disprove the belief that "the poor sue more." All of the studies suffer from methodological problems that may be inherent in any analysis of this issue.

• Studies of malpractice claims that distinguish among claimants' health insurance status have a very large proportion of claims for which the payer status is unknown. These claims were eliminated in calculating the percentages presented above, a decision that assumes that the unknowns are distributed similarly to the knowns. Given the large number of unknowns, this assumption may be faulty.
• Surveys of physicians are subject to flaws if physicians report perceptions of patient payer status. There is some evidence that physicians tend to overstate the proportion of Medicaid patients in their practice.¹⁷ Study authors in Washington State could not determine whether this type of overstatement affected their data.
• The results of the ACOG hospital survey may have been influenced by the nature of the respondents. One-third of the hospitals had more than 2,000 deliveries—and accounted for 70 percent of the reported claims. In contrast to smaller facilities, hospitals of this size are more likely to be regional neonatal centers or high-risk obstetrical centers—factors that would increase both the Medicaid caseload and the potential for "bad outcomes" and possible malpractice litigation. In addition, large hospitals tend to be in urban areas, which have larger Medicaid populations. Danzon's studies of malpractice have shown that urban areas tend to have higher rates of malpractice litigation generally.¹⁸ Although the total sample drawn by the ACOG was statistically reliable, the size (313 hospitals and 306 claims) does not allow for analysis of differences in claims by hospital size.