Insurance hike for obstetricians

A major hike in malpractice insurance rates among obstetricians may mean fewer private practitioners being able to afford to deliver babies locally. 

By the end of this month, private obstetricians will have to pay an annual insurance premium of $292,255 – an increase of $100,640 over the current rate charged by U.K.-based Medical Protection Society, or MPS.  

Local obstetricians say the rate rise could drive them out of business.  

At the moment, there are only four private obstetricians/gynecologists still practicing locally, as a number have left the island or stopped practicing due to the soaring rates.  

To add to the dwindling choices for expectant mothers in Cayman, late last year, the Chrissie Tomlinson Memorial Hospital closed its maternity wing, meaning that all local babies will be delivered at the public Cayman Islands Hospital, or pregnant women who want private care will need to travel overseas.  

The latest figures available from the Cayman Islands Compendium of Statistics report show that 759 live births were recorded in 2012. If Cayman’s remaining private OB/GYNs close down their practices, public obstetricians and midwives based at the public hospital would be responsible for every local birth. The Health Services Authority’s maternity ward is staffed with three consultant OB-GYNs, two OB-GYN registrars, and 22 midwives. The maternity wing is estimated to average two births per day.  

CEO of the HSA, Lizzette Yearwood said, “The MPS increase has not affected the HSA as yet as we negotiate our renewal premiums at the end of July.” The HSA has a corporate policy with MPS, which is different from the policies for private doctors.  

“All the money I earn, I just have to give it to them. I’m finished with MPS, I’m going to move on to another insurance company. The rates are just too high. I can’t afford it,” said private obstetrician Dr. Edward Caudeiron.  

Such a hike in rates would mean that obstetricians would have to deliver 100 babies each to cover the malpractice fees alone, according to Dr. Caudeiron, who said the rates have skyrocketed over the years. “In 2003, I paid $9,000 [per year], and now it’s over $200,000,” he said. 

In comparison, the malpractice rates for neurosurgeons are $49,460 this year, an increase of $10,340 since last year. 

Cayman Islands legislators in March 2011 passed a law capping medical negligence court cases in relation to pain and suffering at $500,000 but that does not appear to have made any dent in the escalating malpractice insurance costs for private obstetricians.  

According to the Department of Health’s Regulatory Services website, the standard health insurance fee for prenatal care at the hospital, vaginal delivery, and postpartum care, is $2,781 per patient. This means that if obstetricians charge each patient the standard fee, they would need to deliver around 100 babies per year, just to cover the malpractice rates, excluding any other expenses. 

Another local obstetrician, Dr. Sarath De Alwis, said his 35-year-long career of delivering babies may come to a end due to the hike in rates.  

“I think quite a few doctors are leaving. If we can’t afford this, what we’ll have to do is we’ll have to look after … the moms until they are about six months [pregant], and ask them to go to George Town [hospital] or elsewhere for the deliveries,” he said.  

On top of paying just under $300,000 to MPS, Dr. De Alwis and other local obstetricians have several other fees to cover.  

“It’s not only the Medical Protection Society fees. It also involves various other fees, maintenance of ultrasound machines, new equipment, I also have to pay three members of staff. Plus the drugs, medicines, and the rent for the office. All of that is going to make a huge dent on any person’s income,” said Dr. De Alwis. 

To keep delivering babies, Dr. De Alwis said he only has two options left – to charge patients more money, or stop delivering babies. 

“It suddenly went up sky high … It’s difficult to cover your costs, unless you charge double your fee. The fee schedule that was given was about 10 years old. If they charge extra for procedures, then those doctors will be able to carry on.” 

All standard health insurance fees are listed on the Department of Health Regulatory Service’s website. The standard fees have recently been reviewed by officials and are due to be gazetted before republication on the website.  

Dr. De Alwis believes that government should raise the standard fees or else he should be able to raise his fees to cover the extra costs he is incurring.  

“The lawyers don’t have a cap on their fees, whereas a doctor’s half an hour is capped, and we have studied longer years,” he said. “Sometimes it’s unfair. To be a specialist, it can take 14 years studying sometimes, and yet you are told how much to charge.”  

Dr. De Alwis recalls delivering 272 babies in 1996, but now delivers around 50 babies per year, which does not come near cover the malpractice insurance costs he is being charged by MPS.  

Impact on parents 

Health insurance broker Jeanette Verhoeven said that it is not just obstetricians who are feeling the heat from the soaring rates, as some young parents are shelling out more and more money to compensate the doctors. 

“In our health broker role, we are seeing an additional birthing fee charged by some private medical doctors to the maternity patients to help cover these malpractice insurance rates. This may raise the total birthing expense to being much higher than the [standard] fees that the insurers used to reimburse,” said Mrs. Verhoeven. 

She added, “The malpractice fees can be a real hardship on the families since the insurers are not picking up any of that those additional [costs] that I know of, and their reinsurance contracts often require they pay claims according to the standard fees.” 

The knock-on effect of private obstetricians charging extra money to cover their malpractice insurance costs is that the patients are left with higher bills to compensate for the hike in rates.  

“The net effect is that the health insurance coverage is providing less coverage and births are costing the parents much more in cost shares than is intended under the Standard Health Insurance Contract, or SHIC benefits,” said Mrs. Verhoeven in a personal email addressed to various government health officials.  

She added that these patients “are often young persons, early in their careers, who already are dealing with many expenses of a newborn, including buying baby furniture, lost days of work, hiring help, plus many policies have a limited coverage on the prenatal or antenatal costs too.”