West Virginia Work Group To Examine Rising Malpractice Insurance Premiums

With physicians' premiums for malpractice insurance in West Virginia "soaring" and the number of insurers providing the coverage in the state declining, Gov. Bob Wise (D) has convened a work group to meet for the second time on Aug. 17 to consider several new ways to provide malpractice coverage for the state's 3,500 doctors, the Charleston Gazette reports. The panel, which consists of doctors, hospital administrators, lawyers, insurers and consumers, will look at several "alternatives" to the current situation, in which doctors and medical groups are responsible for their own coverage (Kabler, Charleston Gazette, 8/15). Possibilities include:

• Malpractice pool: Wise has suggested creating a insurance pool that would provide coverage for all doctors practicing in the state, ordering the state Insurance Commission to prepare a request for bids for such a contract. The AP/Charleston Daily Mail reports the request for bids is expected to be completed within a few days.
• Multi-state pool: The panel is also considering a multi-state medical malpractice pool; however, such a plan may be prove difficult to coordinate, as medical liability laws differ from state to state. For example, West Virginia caps non-economic damages at $1 million, while other states do not impose caps.
• Patient compensation fund: The panel is also looking into a system in which a physician buys part of the malpractice coverage -- $200,000 to $300,000 -- from a private insurer and then purchases an additional $700,000 to $800,000 worth of coverage for "catastrophic claims" from a low-cost, state-administered fund. While such a system remains a "real possibility" for West Virginia, Pennsylvania is phasing out a similar program because it incurred an unfunded liability of $2 billion.

Problems with Pools
The "relatively small" number of physicians in the state presents an "obvious problem" for the panel, as the principle of liability insurance is to "spread the risk" over a large number of physicians -- something that is not possible in a small state, according to Stuart Calwell, a Charleston-based attorney. He added, "[The panel members] need to find some way of expanding that risk pool" (Charleston Gazette, 8/15). Meanwhile, the AP/Daily Mail reports that doctors and medical practices are exiting the state because of high malpractice premiums. For example, Southern Surgical Associates Inc., which had been paying about $40,000 annually per doctor in premiums, will leave 3,000 patients without a doctor when it closes at the end of the month. Wise said, "Physicians have been battered by rising malpractice insurance rates, and now many are having their coverage canceled for no good reason. The availability of crucial health services in many communities is being threatened by the actions of a few [insurers]" (AP/Charleston Daily Mail, 8/15). For further information on state health policy in West Virginia, visit State Health Facts Online.