Professional liability insurance rates go up, up; doctors go away

High-risk specialists were the hardest hit in 2001, forcing some to drop services. The market isn't looking much better this year.

By Tanya Albert and Damon Adams, AMNews staff. Jan. 7, 2002.

After more than a decade of fairly stable rates for professional liability insurance, physicians saw costs increase in 2001. And in some areas of the country, premiums soared to unaffordable levels.

Eight states saw two or more liability insurers raise rates by at least 30% last year, according to an AMNews analysis of records from insurance departments in the 50 states and the District of Columbia, and medical liability insurers. Physicians in more than a dozen states saw one or more insurers take a 25% or higher rate increase, according to the analysis.

And that does not factor in increases some physicians have been hit with when carriers changed the criteria used to offer discounts, such as increasing the number of years a physician has to go without a claim to receive a discount on premiums.

Neurosurgeons, obstetricians and other high-risk specialists were the hardest hit in 2001. In some cases, physicians in traditionally high-risk specialties -- even those without a track record of lawsuits -- could not find an insurance company willing to provide coverage. The St. Paul Companies, which insures doctors in 45 states, announced late in 2001 that it no longer would write medical liability policies. It plans to phase out coverage as physicians' contracts expire over the next 18 to 24 months.

Analysts don't expect any market improvements in 2002 or 2003. "Without some kind of change, it's not going to get any better," said Joe Luchok, spokesman for the Health Insurance Assn. of America. "Everything that is causing this is still in effect." [...]