PROFESSIONLiability crisis reaction: Doctor-owned insurance fills gapPhysician-owned insurers are faring better through the latest availability and affordability crisis than are commercial carriers. More groups are considering joining in.By Tanya Albert, AMNews staff. Dec. 23/30, 2002. An old idea is new again as doctors look for ways to survive in a tough medical liability insurance climate. Just as 1970s-style bell-bottoms made a comeback in the fashion world, so, too, has another idea from that decade: insurance companies formed, owned and operated by physicians. Such firms were born in the medical liability crisis of the mid-1970s. As a new medical liability crisis brews, at least a half-dozen doctor groups in states where medical liability insurance has become unavailable and unaffordable have explored the idea of their own insurance firms. In recent months, several companies won state insurance department approval and are open for business. The trend is likely to continue. "We absolutely plan to see more of this in 2003," said Grace Vandecruze, a senior vice president in Fox-Pitt, Kelton's corporate finance department that has worked with one physician capitalized group in New Jersey. "Physicians are yearning for companies that are more focused and can service their needs." "This is a logical response to fill the void that has been left in the marketplace," added Lawrence E. Smarr, president of the Physician Insurance Assn. of America. "The companies formed back in the 1970s and early 1980s are successful." Doctor-owned companies insure 60% of U.S. physicians, the PIAA says. That number could rise in coming months and years as firms recently formed in New Jersey and Pennsylvania sign up physicians and as doctors in West Virginia continue to explore the possibility of creating companies to meet the demand in their state.
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Copyright 2002 American Medical Association. All rights reserved.
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