Effects of a Professional Liability Crisis on Residents' Practice Decisions

Abstract

OBJECTIVE: Pennsylvania, like many states, is in a professional liability crisis characterized by escalating cost and decreasing availability of liability insurance. Medical and surgical specialists have experienced especially large increases in insurance premiums. The objective of this study was to estimate the impact of liability concerns during a professional liability crisis on Pennsylvania residents' decisions regarding their future practice. It was hypothesized that liability concerns would negatively affect Pennsylvania residents propensity to practice in the state following residency.

METHODS: Statewide mail surveys were completed in 2003 by 68 Pennsylvania residency program directors and 360 residents nearing the end of their training in anesthesiology, general surgery, emergency medicine, obstetrics and gynecology, orthopedics, and radiology residencies.

RESULTS: One third of residents in their final or next-to-last year of residency planned to leave Pennsylvania because of the lack of availability of affordable malpractice coverage. Although, in general, residents' geographic decisions are influenced by a range of factors, those who are about to leave Pennsylvania named malpractice costs as the primary reason 3 times more often than any other factor. Seventy-one percent of residency program directors reported a decrease in retention of residents in the state since the onset of the professional liability crisis. For some programs the decreases were very large.

CONCLUSION: An environment of mounting liability costs in Pennsylvania appears to have dissuaded substantial numbers of residents in high-risk specialties from locating their clinical practices in the state. The impact of decreased resident retention on the future availability of specialist services in high-cost states merits close monitoring.

Keywords: malpractice, medicine, tort

JEL Classification: I11, I10, K13