14% Increase Is Approved in Malpractice Insurance

By DANNY HAKIM
NY TIMES

The Spitzer administration approved a 14 percent increase in medical malpractice insurance rates on Monday, the largest rate increase in a decade.

Doctors’ groups protested angrily, but the administration said the move was necessary to prevent “perhaps an irreversible crisis,� since insurers were having trouble staying in the business.

“We have inherited the worst of both worlds — physicians who cannot afford to practice medicine and insurers whose financial condition is rapidly eroding,� said Eric R. Dinallo, the state insurance superintendent. “The cause is high medical liability costs, and this administration is going to address it.�

Gov. Eliot Spitzer said in a statement that he would create a new task force, headed by Mr. Dinallo, to examine the industry’s systemic problems. The panel is to report back by the end of the year.

Mr. Dinallo has already held talks behind closed doors with representatives of the insurance industry, trial lawyers and doctors groups, among others, before deciding on the rate increase. The New York Times filed a Freedom of Information request with the agency for records related to the meetings, but was given only a list of attendees and was told there were no minutes or detailed records kept of the meeting.

David Neustadt, a spokesman for Mr. Dinallo, said it had not been decided whether the new task force would conduct public hearings. State law requires many such panels to open their meetings to the public, but Mr. Neustadt said this one would not be subject to the requirement because it was “purely advisory� and “doesn’t have to have a quorum.�

Physicians’ groups were sharply critical of the increase.

Dr. Robert Goldberg, president of the Medical Society of the State of New York, said in a statement that the increase would “severely worsen the health care access crisis that has already resulted in shortages in several specialties all across New York State.�

The society said the increase would mean that a neurosurgeon in Long Island would now have to pay $309,311 for one year’s coverage, while an ob-gyn specialist in Brooklyn or Queens would have to pay $173,061.

Donna M. Williams, executive director of the New York district of the American College of Obstetricians and Gynecologists, said “the constant increase in premiums is forcing obstetricians across the state to give up the practice of obstetrics and simply do the practice of gynecology only.�

That means that women “may have to travel farther to find a physician who will deliver their baby,� she added.

Currently, an obstetrician on Long Island typically pays $162,000 a year, but could see that rate fall to $25,000 by practicing only gynecology.

Over the last five years, the largest annual rate increase has been 9 percent, and the department did not approve any increase in the fiscal year ending in March 2003. Insurers had requested increases this year ranging from 16.6 percent to more than 30 percent, the department said.

Mr. Dinallo pointed out that the new rate increase was less than insurers sought and said it was “what our experts believe is necessary to stave off an industrywide crisis unless the underlying problem of high medical malpractice costs is addressed.�
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