Tuesday, April 20, 2004

Prognosis so-so for doctors

No quick fix seen for high malpractice insurance rates

By Debra Jasper
Enquirer Columbus Bureau

COLUMBUS - Five top insurance officials on Monday tried to ease concerns that skyrocketing medical malpractice rates will push more Ohio doctors to leave their practices.

"We're seeing some encouraging signs in Ohio," said Raymond Mazzotta, president of the OHIC Insurance Co., based in Columbus. "Things are starting to slow down."

But Mazzotta and four other insurance executives warned there is no quick fix. Rates are starting to stabilize in Ohio, but doctors could still pay higher premiums for several more years, they told a joint committee of members of the Ohio Medical Malpractice Commission and the Ohio House and Senate.

Mazzotta said rates continue to be much cheaper for Cincinnati doctors than those in Cleveland. He said his firm charges rates that are 40 percent higher to doctors in the 12 counties closest to Cleveland because costs are dramatically higher there than in the southern part of the state.

"If we did not do this, then doctors in Cincinnati would be subsidizing the higher costs in the northeast," he explained.

Ohio Insurance Director Ann Womer Benjamin said the commission hearings are critical for lawmakers trying to figure out the best way to deal with the soaring medical malpractice rates. She said the state must explore the issue because "our most talented doctors are finding it increasingly difficult to practice in Ohio."

Mazzotta and the other five officials, who write more than 70 percent of malpractice policies for Ohio doctors, also defended themselves against critics who have said doctors and patients are subsidizing insurance executives' huge losses in the stock market.

"You hear that rising rates are aligned with greed. That's just simply not the case," Mazzotta said. He said his firm between 1997 and 2000 collected $120 million in premiums from Ohio doctors but paid out $164 million in losses.

The insurance officials also told the commission that lawmakers should not consider putting a freeze on medical malpractice premiums because it could force some companies to close or pull out of the state. They said rates should eventually get back in line if the Ohio Supreme Court upholds a law that puts caps on the amount juries can award in medical malpractice cases.

Mazzotta said lawsuit limits are key because his firm's average cost for final settlements in medical malpractice cases jumped from $79,000 in 1995 to $270,000 in 2003.

He said the costs were twice as high as projected. He said the number of $1 million settlements in Ohio, for example, increased from an average of 2.5 a year from 1990 to 1998 to an average of 8.5 since 1998. And the company spent $8 million - $6,800 per case - on cases that were dropped or dismissed.

Paul Brutus, an executive with Pro Assurance Corp., which writes insurance policies through the Medical Insurance Co., also said premiums are high in Ohio because medical malpractice payments have increased 13 percent a year - or 63 percent - in the past four years.

"That's live dollars. We're not playing with funny money," he said.

Tim Maglione, senior director of government relations for the Ohio State Medical Association, said the organization has not yet decided whether a freeze on rates is a good idea.

"We need to assess the impact that would have on the current market," he said. "It might do more harm than good if there is a mass exodus."

If a rate freeze isn't viable, he said, the group will look at other ways to bring down insurance costs. "From here," he said, "we'll be focusing on what we can do to help premiums get back in the line of reasonable."


Email djasper@enquirer.com

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