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An Unfair Contract ; No-Sue Clause: Hazardous to Patients' Rights

May 1, 2007

MORE THAN a dozen New Jersey doctors have begun requiring patients to sign a contract promising not to sue for malpractice. This is an alarming trend. It threatens the constitutional right of patients to a jury trial. It also highlights the need for reform of the malpractice insurance industry.

As Record Staff Writer Mary Jo Layton reported Sunday, at least three North Jersey gynecologists and 10 other obstetricians and gynecologists around the state are having patients sign the contracts as a condition for treatment. The patient gives up the right to sue, agreeing instead to binding arbitration, which experts say is far less friendly to people hurt by malpractice than a jury or court trial.

Doctors see the contract as a way to reduce the costs of malpractice insurance. New Jersey obstetricians were hit in recent years by a more-than-doubling of premium costs to between $87,081 and $171,199 per year. That is expensive for any medical practice, but especially one that is among the lower-paid specialties.

Obstetricians have also seen their revenues squeezed by managed- care insurers. So the steep rise in malpractice premiums came at a time when OB-GYNs felt they could ill afford it.

But patients didn't cause this problem. Patients should not have to sign away their rights to fix it.

The contract that patients sign states that rising premium costs are caused by patient lawsuits. Evidence doesn't back that up. From 2001 to 2003, New Jersey had a 21 percent decline in malpractice payouts. Nationally, payouts have also fallen.

Just as when New Jersey's auto insurance rates spiraled out of control in the 1990s, the malpractice premium increases are caused by a complex mix of factors. It is not an easy fix. The Legislature was right a few years ago to reject the idea of capping jury awards for malpractice victims. But the state needs to look for other solutions, including possible limits on the size of yearly premium hikes to doctors.

The physicians requiring no-sue contracts are limiting patients' recourse in the event of malpractice. Physicians may also be putting themselves at risk. They have cut their premium costs by joining a self-insurance pool that is not backed by a state guarantee fund.

A prominent gynecologist in Ridgewood who is in the self- insurance pool says she is confident it could meet any arbitration claims against its members. But the chief executive officer of the Medical Society of New Jersey says doctors in the pool are taking on too much risk. The Government Accountability Office, the investigative arm of Congress, has also raised concerns nationally about the future solvency of these self-insured groups.

The state needs to look for ways to help obstetricians stay in business without forcing unfair contracts on their patients.

(c) 2007 Record, The; Bergen County, N.J.. Provided by ProQuest Information and Learning. All rights Reserved.

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