Metal theft can disrupt physician office

Metal thieves recently destroyed two air conditioning units at the office of Narayanachar Murali, MD, an internist in Orangeburg, S.C. The thieves pounded the units with a sledgehammer to gain access to the copper coils inside.

The break-in netted the thieves just about $100 worth of metal. But it cost Dr. Murali a lot more in lost revenue and damages.

"You say copper theft and people think of a penny. No big deal. But this cost me about $12,000 altogether," Dr. Murali said. In addition to the cost of two new air conditioners, he lost a half day's income while the units were installed. He filed claims with his property insurer but doesn't expect to be reimbursed for all his expenses.

Victimized physicians and other experts say that with prices historically high, doctors' offices will have to think about anything metal when they think about theft prevention. At the least, they say, physicians should check whether their property insurance policy covers the loss of business such theft can cause.

With the price of copper at $3.50 a pound, compared with an average of 67 cents a pound in 2002, thieves are striking homes, businesses, even municipalities, in an effort to raise some quick cash.

Air conditioners aren't their only targets. Police say thieves also look for copper wiring, fittings and piping at new construction sites.

Aluminum siding, which can be easily stripped off buildings or stolen from job sites, is another target. The price of aluminum fluctuates, but it was at $1.28 a pound earlier this month, compared with 65 cents a pound in February 2004.

In 2007, the U.S. Dept. of Energy called copper theft a $1 billion a year problem. Bryan Jacobs, director of government relations for Home Depot and member of the Coalition Against Copper Theft -- whose members also include home builders, contractors, and members of various utility associations -- believes the price tag for metal thefts is actually about four times that number, when taking into account lost work time.

OneBeacon Insurance in Boston has seen a 300% jump in the number of metal theft claims over the last few years, according to spokesman Charlie Sidoti. Alarmed by the numbers, 20 states have enacted legislation targeting metal thieves and the scrap yards that pay them, and a similar bill has been sponsored in the U.S. House of Representatives. In general, the bills require scrap yards to document every transaction, while some place a limit on the amount of cash they can disburse at one time.

Physician offices and medical clinics have not been immune to the crime spree. As a result, many physicians are now taking preventive measures, whether they own their building or lease it.

Dr. Murali's copper theft was one of 40 reported in Orangeburg alone that weekend, and one of at least two physicians. George Augustine, MD, a critical care physician who has an adjoining office, reported a similar loss.

Oncology Therapies of Vista, a Vista, Calif., radiation treatment clinic, is still assessing the amount of money it lost recently when thieves broke into an outbuilding and took copper piping from inside a radiation chiller machine. The equipment shutdown left 63 cancer patients without treatment that day.

"All the costs aren't in yet, but we anticipate it to be in the thousands of dollars in lost revenue and repairs, not to mention the stress to our patients," said spokeswoman Amber Duff.

Thieves either break into an air conditioner and take out the copper, leaving the unit destroyed, or they take the entire unit and strip it of the metal later. "Most units weigh 100 to 150 pounds. Two guys can throw one in the back of a truck in a heartbeat," said Mike Barger, owner of Loyal Heating and Air Conditioning in Indianapolis.

Air conditioning thefts only net about $40 or $50 worth of copper for thieves, which is why they do several jobs at the same time, police say.

Police say because thieves want to get in and out quickly, they probably will skip sites with security measures.

Dr. Murali has paid $900 for an alarm system that would go off any time there is trauma to the air conditioning units.

Duff said the clinic thought the steel door and dead-bolt lock that secured the outbuilding were sufficient. "We now realize we need enclosed security with an alarm," she said.

Physicians who lease space should make sure their landlords have taken some preventive measures as well. "Even if the loss is covered, you don't want to deal with customers, contractors and the lost time," Sidoti said.

Increasing security can also lower one's property insurance rates, either through discounts or pricing by the underwriter, said Gary Christy, a spokesman for Westfield Insurance in Westfield Center, Ohio.

Christy said in most cases, metal thefts are included in a commercial policy, and the loss of revenue is covered as business interruption.

Physicians should check individual policies to see if loss is covered.

Those who lease space should be protected under the building owner's policy, Christy said. However, equipment owned by the physician is usually under the physician's policy. Air conditioning units would be the building owner's responsibility, unless they were specifically purchased by the tenant, Christy said.

Meanwhile, market forces and government action could be working to put a dent in copper thefts in the near future.

The price of the metal is decreasing, due to a slowing global economy and weaker demand. According to the London Metal Exchange, copper hit a high of $4.26 a pound on May 5, but slid to $3.50 in early August and is expected to continue to decline, though not to levels as low as in 2002.

Jacobs said many of the states that enacted metal theft laws have reported a reduction in the crime.

Caffarini covered practice management issues during 2008-09. If you have any questions or comments, please contact Business Editor Bob Cook at 312-464-4434 or by e-mail (bob.cook@ama-assn.org).

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