Pa. hospitals fear return of ‘venue shopping’ in malpractice cases

Pennsylvania hospital leaders are bracing for big increases in medical malpractice costs following a recent court ruling, and they say it could restrict access to healthcare in the Keystone State.

Andy Carter, president and CEO of the Hospital and Healthsystem Association of Pennsylvania

The Pennsylvania Supreme Court on Aug. 25 upended rules that had prevented plaintiffs from filing malpractice suits in any county of the state. Since 2003, Pennsylvania plaintiffs have had to pursue malpractice suits in the county where they received care and contend they were harmed.

With the recent court ruling, attorneys and their clients can take their cases to counties, such as the Philadelphia or Pittsburgh areas, where juries are more inclined to issue bigger awards.

Critics have called the practice “venue shopping.” Hospital leaders say it’s going to cause financial headaches to health systems at a time when they are already facing serious financial difficulties. They also said it could ultimately reduce access to healthcare in Pennsylvania.

Andy Carter, president and CEO of the Hospital and Healthsystem Association of Pennsylvania, said he fears the court decision will raise malpractice insurance premiums and could deter doctors from practicing in the Keystone State. Hospitals could be looking at curtailing services in the wake of higher costs, he said.

“We’re going to continue the conversation pointing to the risk that this rule change puts Pennsylvania in, in terms of access to the healthcare they have now, especially in the climate we now face,” Carter told Chief Heatlhcare Executive in an interview.

“This is as much about the fragility of the healthcare delivery system as whatever a jury award might be,” Carter said. “There’s a great deal at stake here for all Pennsylvanians.”

‘Cost driver that nobody needs’

The Supreme Court ruling only will add to the dire financial challenges hospitals have been facing in the pandemic, Carter said.

Hospitals have been seeing reduced volumes, labor shortages, and higher costs due to inflation. They are also seeing sicker patients, requiring longer stays, adding to their financial pressures.

The prospect of bigger jury awards “is an additional cost driver that nobody needs right now,” Carter said.

Smaller hospitals and health systems with less resources are especially vulnerable to higher jury awards, as well as higher legal costs, Carter said.

“Smaller independent facilities are typically at the greatest risk,” Carter said. He added it could be one more burden to force some hospitals “to say we have got to significantly reduce our capacity as an organization, which means less high quality service in our communities.”

Some hospitals have already curtailed obstetric services in recent years, and the court ruling could prompt hospitals to examine what services they offer.

“This kind of event could force some hospitals to look at whether they are going to want to maintain obstetric care,” he said. “That’s one example.”

In other areas of service with higher risk, Carter said, “I think people will start taking a look at the exposure.”

Losing doctors?

Carter said he sees the real potential of doctors going to other states to practice due to expected hikes in malpractice insurance. Pennsylvania initially put in rules designed to end venue shopping to avoid a loss of doctors, he said.

“The jury awards in some of these counties are well above national averages by orders of magnitude,” Carter said. “Ultimately that will have an effect on medical malpractice premiums and how attractive Pennsylvania Is as a place for physicians to practice.”

Jason Woloski, president of the Pennsylvania Academy of Family Physicians, said the court ruling would hurt doctors.

“We are extremely disheartened by the Supreme Court’s ruling,” Woloski said in a statement. “Family physicians are often the first point of contact for patients. We fear this decision will increase medical liability insurance costs for many family physicians, negatively impacting patient access to quality primary health care across the Commonwealth.”

Woloski said he worries about returning to the unpredictable medical liability environment last seen two decades ago.

Impact on jury awards

Those who supported the court’s decision said it offers victims of malpractice a better chance for justice. They said it was unfair for hospitals to get a special court protection that’s unavailable to other businesses or defendants.

Kila Baldwin, president of the Pennsylvania Association for Justice, which represents trial lawyers in the state, told Spotlight PA that the previous rules gave hospitals and health providers an unfair edge.

“Plaintiffs in medical malpractice cases shouldn’t be limited by venue rules while the defendant enjoys a home-field advantage,” Baldwin said in a statement. “The new rule levels the playing field and will improve access to justice for all Pennsylvanians.”

The Pennsylvania Supreme Court justices followed the guidance of its Civil Procedural Rules Committee. In a report, the committee said malpractice cases should have the same rules as other civil suits.

“Many of these patients have endured substantial injuries seriously lessening their quality of life in perpetuity, requiring permanent medical care and assistance in activities of daily living, and causing the patient and their families to endure lifelong pain, suffering, and loss of companionship,” the committee said. “These are serious, complicated, and tragic cases. There is no windfall; no one gains.”

“The stark reality is that patients and their family members would forgo all to avoid the injury cause by medical malpractice in the first place,” the committee said. “A verdict can never make them whole.”

Hospitals said the practice of venue shopping up until 2002 spurred higher malpractice costs and huge awards from juries. By 2002, medical liability jury verdicts in Philadelphia were twice the national average, with nearly a quarter of the awards racing $1 million or more, the hospital association said.

Even after 2003, when plaintiffs were restricted to filing suits in the counties where they said they were harmed, hospitals said plaintiffs still have been able to obtain fair awards. From 2003 through June 2022, the average medical malpractice payment was $468,311, nearly 16% higher than the national average, according to the Pennsylvania hospital group, citing data from the National Practitioner Data Bank.

“Jury verdicts in Pennsylvania under the old rules that were repealed were still fair,” Carter said. “They were running above the national averages. It’s not as if we were some backwater state where people had no access to equitable justice.

“Pennsylvania remains above the national average in these payouts,” he said. “That’s a pretty strong indicator that it’s a fair system and injured parties are being fairly compensated.”

LeadingAge PA, a trade group representing nursing homes, assisted living facilities, and other providers, denounced the Supreme Court ruling.

“We cannot move backwards and allow medical liability premiums to skyrocket and further jeopardize access to long-term care and other healthcare-related services,” LeadingAge PA said in a statement.

Potential remedies

The new rules on malpractice cases take effect Jan. 1. Pennsylvania hospitals will continue to press their case, Carter said.

The hospital group will ask lawmakers to consider legislation to address the issue. But lawmakers don’t have a great deal of time left in the current legislative session, particularly with the elections coming up this fall. Carter conceded it may be difficult for lawmakers to craft and pass a bill before the new rules take effect.

“We know it’s an uphill battle,” Carter said.

Carter also said it’s unclear if Pennsylvania Gov. Tom Wolf would approve or reject a legislative remedy. He said some have explored amending the Pennsylvania Constitution to address the issue, but that’s a process that takes years.

As for possibly taking the action to federal court, Carter said it’s not immediately planned, but he didn’t dismiss the possibility.

“We haven’t reached that point yet but we're going to keep all options that are viable,” Carter said.