Soaring premiums force doctors to close practice

As medical liability insurance rates escalate in some states, here's how one West Virginia general surgery group was pinched out of the market.

By Tanya Albert, AMNews staff. Sept. 10, 2001.

In hindsight, the $130,000 medical liability insurance bill that a three-physician practice in West Virginia paid last year was a bargain.

This year, when the general surgeons shopped around, they couldn't find a company in the standard market that would underwrite them because the practice had a few malpractice cases filed against it in the past five years. The cost for insurance in the nonstandard market -- the only place they could get it: $75,000 to $100,000 per doctor.

And the "prior coverage" or "tail" insurance they needed to cover themselves was an additional tens of thousands of dollars. It had to be paid in one lump sum.

The physicians had been taking out extensions on their old policy since May while they searched for a way to continue serving the patients attached to the practice's 3,000 active charts. But insurance between now and year's end would have cost as much as $101,000 for the three of them.

Instead, they decided to close the 40-year-old practice Aug. 31.

"We explored a million different ways," said general surgeon Michael Hall, MD, one of the three physicians at Southern Surgical Associates in Charleston. "We just don't have the resources to pay the premium."

Stories about liability rates rising to "crisis levels" have been bubbling up across the country. Physicians have been particularly hard-hit in Pennsylvania and West Virginia, where some doctors reported a 150% increase in their rates in the past 12 to 18 months. But bigger settlements and jury awards nationwide are pushing up prices all over the country. [...]