SUMMARY REPORT

2003 OBSTETRICS/GYNECOLOGY MALPRACTICE SURVEY

Based on 2002 Data

OVERVIEW

Merritt, Hawkins & Associates (MHA) is a national physician search and consulting firm that periodically conducts surveys regarding a wide range of physician staffing issues. Prior surveys conducted by MHA have examined the types of recruiting incentives offered to physicians, hospital physician recruiting patterns, physician-generated revenues, and the practice plans and preferences of both final-year medical residents and physicians fifty years old or older.

This report marks MHA’s first survey of obstetrician/gynecologists (Ob/Gyns). The survey examines the practice patterns of obstetrician/gynecologists and how they may be affected by rising malpractice premiums. In particular, the survey is intended to reflect how rising malpractice premiums may affect the availability of Ob/Gyns in certain states and their willingness to perform deliveries in these states.

The survey of Ob/Gyns may prove useful to hospitals assessing their staffing needs in obstetrics/gynecology, to health care professionals who monitor physician supply trends, to physicians interested in how malpractice is affecting their peers, and to those who track developments in liability, tort reform, and related issues.

METHODOLOGY

MHA mailed the Obstetrics/Gynecology Malpractice Survey to 4,000 obstetrician/ gynecologists practicing in 12 states identified as having rising medical malpractice premiums. These states, which have been characterized by the American Medical Association as being in the midst of a “malpractice crisis,” included: West Virginia, Ohio, Pennsylvania, Florida, Georgia, Mississippi, Nevada, New Jersey, New York, Oregon, Texas, and Washington. Physicians had the option of completing the survey anonymously or they could include their names and addresses on the form.

Surveys were mailed November 5, 2002, and 268 completed surveys were received by the response date of December 10, 2002.

Surveys mailed Surveys completed Response rate

4000 268 7%

QUESTIONS ASKED AND RESPONSES RECEIVED

(All numbers rounded to the nearest full digit)

1)Malpractice premiums in your state are said to be increasing. Are you currently experiencing rising malpractice premiums in your practice?

Yes / 95%
No / 4%
N/A / 1%

2)Are rising malpractice premiums causing you to consider relocating to another state?

Yes / 56%
No / 43%
N/A / 1%

3)If yes, are you actively taking steps to relocate to another state, such as researching practice opportunities or talking to potential employers?

Yes / 59%
No / 38%
N/A / 3%

4)Do you plan to relocate to another state within the next 12 to 18 months?

Yes / 24%
No / 64%
Possibly / 8%
N/A / 4%

5)Are rising malpractice rates causing you to discontinue deliveries?

Yes / 39%
No / 55%
Possibly / 4%
N/A / 2%

6)If yes, would you continue to perform deliveries if tort reform were enacted in your state and malpractice premiums became reasonable?

Yes / 83%
No / 15%
Possibly / 1%
N/A / 1%

7) About how many patient visits do you see in the office each year?

Mean response…3,616

8)About how many deliveries do you perform each year?

Mean response…..186

TRENDS & OBSERVATIONS

Merritt, Hawkins & Associates’ 2003 Obstetrics Gynecology Survey indicates that many obstetrician/gynecologists (Ob/Gyns) are altering their practice styles or making plans to leave their current locations as a result of rising malpractice premiums. The survey suggests that access to obstetrical services in 12 high malpractice states could be significantly reduced if steps are not taken to reduce malpractice premiums in those states.

The majority of Ob/Gyns surveyed (56%) indicate they are considering relocating to another state due to rising malpractice premiums in their own state. Of these, 59% are actively taking steps to relocate by researching available practice opportunities and speaking with potential employers. This number represents 33% of the total physicians who responded to the survey, indicating that about one in three Ob/Gyns surveyed are actively taking steps to relocate out of their current states.

According to American Medical Association statistics, there are 12,678 Ob/Gyns actively involved in patient care in the 12 states where the survey was conducted. A hypothetical extrapolation of the survey suggests that 33% of these physicians – or roughly 4,180 – are actively taking steps to relocate to a different state. Physicians surveyed indicate that they are, on average, handling 3,616 patient visits in the office annually and performing 183 deliveries annually.

Should one-third of all Ob/Gyns in these states relocate, some 15,114,000 patient visits would have to be absorbed by the remaining Ob/Gyns, assuming all Ob/Gyns in the 12 states are seeing the same number of patient visits on average as those surveyed. In addition, remaining Ob/Gyns would have to absorb some 764,800 deliveries annually if all Ob/Gyns in the 12 states are performing as many deliveries on average as those surveyed.

While these figures represent hypothetical extrapolations, they highlight the dramatic decrease in obstetrical/gynecological services that would occur if Ob/Gyns leave high malpractice states in significant numbers. The impact would be profound even if Ob/Gyns in the 12 high malpractice states are not seeing as many patients on average or performing as many deliveries on average as those responding to the survey. (U.S. Census Bureau statistics indicate they may not be. The 12 states where the survey was conducted generated some 1,450,000 births in 2001, or about 115 per Ob/Gyn.)

While 33% of Ob/Gyns are taking active steps to relocate to another state, only 24% indicated they plan to leave their states in the next 12 to 18 months. A 24% reduction in the Ob/Gyn workforce in the 12 high malpractice states hypothetically would lead to some 11 million extra patient visits and some 556,000 extra deliveries that would have to be absorbed by Ob/Gyns remaining in the states.

Even if physicians surveyed do not act on their intention to leave their states as expressed in the survey, the survey indicates that many Ob/Gyns are curtailing services. Thirty-nine percent of Ob/Gyns surveyed indicated that rising malpractice premiums are causing them to discontinue deliveries. Extrapolating from the survey, 4,944 Ob/Gyns in the 12 states surveyed are discontinuing deliveries, creating an extra 904,752 annual deliveries to be absorbed by Ob/Gyns continuing to perform deliveries in the high malpractice states. Again, this assumes that all Ob/Gyns are performing as many deliveries on average as those responding to the survey.

While this is a hypothetical extrapolation, it underlines the serious impact on obstetrical services that may be occurring as a significant number of Ob/Gyns curtail deliveries in the 12 high malpractice states.

However, the survey indicates that the trend of Ob/Gyns discontinuing deliveries could be limited by tort reform. Eighty-three percent of physicians surveyed who said they are discontinuing deliveries would resume deliveries if malpractice premiums in their state became reasonable due to tort reform.

In conclusion, the survey strongly suggests that high malpractice premiums will lead to the significant curtailment of obstetrical/gynecological services in selected states, through physician migration or physician curtailment of deliveries. This trend could be inhibited or forestalled, however, by the reduction of malpractice premiums in the 12 states where the survey was conducted.

For more information on the survey, please contact:

5001 Statesman Drive

Irving, TX 75063

800-876-0500

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