Medical liability strategy.

In most western countries, sky-rocketing medical liability insurance premiums are pushing physicians out of practice and denying patients access to needed services.

The true costs of malpractice suits include defensive medical practices,higher medical costs because of higher insurance premiums and physicians time taken up with litigation.Indirect costs include the doctors' relationship with their patients.

The most important factor in rising medical liability premiums appears to be the size of the awards, rather than the frequency of lawsuits. The size of the awards is driven primarily by the medical care costs of the successful plaintiff. Pain and suffering, along with other noneconomic damages, can be factors in the increase in awards, but the rising cost of medical care appears to be the most significant factor.

What happened?

A robust economy in the 1990s meant more visits to doctors and excess capital. More patients going to their doctors meant a greater chance for more lawsuits in the future with higher liability costs. Excess capital meant that there was more money to invest, and the companies invested their funds in the industry they knew best - their own - by discounting their premiums below actuarial risk in order to obtain or preserve market share. The increased suits, and awards, that began to roll in toward the end of the 1990s coincided with a drop in the investment economy.

Whats needed?

Physicians and the media share a responsibility to provide realistic portrayals of medical care so people have more reasonable expectations of what physicians can do.

A reasonable cap on the "pain and suffering" component and limits to attorneys continengency fees.

Lancaster Community Health Plan (LCHP) serves a population of approximately 470,000 in Lancaster County, Pennsylvania. Among this population, 10,038 are African-American and 15,639 are Hispanic, with Spanish as their primary spoken language. While Lancaster County is traditionally characterized as a rural retreat from nearby urban centers, the community's sociodemographic mix has been continually changing during the past 10 to 15 years.

The principal health and human services issues in Lancaster include access to primary care, lack of behavioral health and health service coordination, oral health access, inadequate affordable housing, substance abuse, pregnancy prevention and parenting skills, and AIDS prevention and treatment services.

Over the last decade, representatives from various organizations in the Lancaster area have worked to identify the needs of the community. One result of these efforts was the establishment of the Lancaster Community Health Plan, a managed care plan for Medical Assistance (Medicaid) recipients. Its primary focus was to provide an appropriate medical home for every Medical Assistant recipient in the county. LCHP began operations in May 1995 by recruiting a network of 354 primary care physicians at 115 sites as acting primary care managers.

Major Initial Initiatives
Initiatives were designed to implement a primary care case management (PCCM) program that would encompass a community-wide integrated service delivery system for all county health and human service organizations. Initiatives have included:

Creating a case management model that also includes behavioral care services.

Implementing a single point of entry system into health and human services.

Increasing coordination of series with organizational preservation.

Achieving privatization that allows the partnership to provide services to the extended community.

Selected Accomplishments
Lancaster Community Health Plan's major efforts have focused on expanding and enhancing the successful "medical home" concept through a specific set of initiatives:

adding behavioral care management to integrate mental health services into the medical home;

developing a single point of entry (SPE) system to improve coordination of care through facilitated referral and information sharing;

privatizing the LCHP so that medical home concept can be extended from the medical assistance population to a broader population in need-the uninsured and underinsured.

The continuing success of LCHP services and its open collaboration with providers, consumers, and county government has built a foundation of trust and involvement in the community.

Selected Outcomes

The Lancaster Community Health Plan's (LCHP) 1915(B) waiver with HCFA was renewed through October 20, 2002, or until such time as the states' Health Choices (HMO Medicaid Plan) becomes fully operational. This reflects a policy change on the part of the state. Despite LCHP's positive outcomes, the state has chosen to advance an all-HMO model for Medicaid. Given the unproven results of the new contractors the community continues its efforts to provide access to health care by Medical Assistance clients, as well as other underinsured and uninsured individuals.

An independent review of LCHP, conducted for the Medicaid waiver, Reported improved access, quality, and lower costs.

Complete immunizations for children aged 2, 4, and 14 increased from 62.5 to 74.5 percent in just one year.


Inpatient admissions for conditions such as asthma, pneumonia, diabetes and otitis media have decreased and there has been a reduction in emergency room use.


Costs per patient per year fort contract administration, inpatient and outpatient care, and case management were reduced 13.7 percent for the year studied.

Looking Forward

LCHP is a private, nonprofit community-based model that has served as a catalyst for change in the local delivery of health care. The partners have identified "collaboration zones" that have become an effective strategy for identifying an issue and working collaboratively to create a community-based solution. As noted, the first zone of collaboration was providing care for the Medical Assistance population. In the face of changing state policy requiring regional HMO coverage for this group., the partners, remain committed to the medical home concept and are looking art ways to reinvent the partnership to deal with state requirements to meet future community needs. Their three primary goals include:

Providing an appropriate dental home for every Medical Assistance client in Lancaster County and for the 9500 LCHP enrollees.


Engaging private business as a distribution conduit for the Children's Health Insurance Program (CHIP) of Pennsylvania for uninsured children in Lancaster County.


Developing a network of outreach workers to engage the Medicaid population one-on-one in their homes in order to help with people move from a crisis-orientation to a more proactive approach to their concerns.

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