Insurance company wants to cut Conn. malpractice rates by 24 percent
By Associated Press
http://business.bostonherald.com/
An Indiana insurance company that raised medical malpractice rates 90 percent three years ago is now asking Connecticut regulators for permission to cut them by 24 percent.
Doctors say they don’t expect much change even if regulators approve the request from the company, one of just four that provides medical malpractice insurance in Connecticut. A professor of insurance law at the University of Connecticut said the rate cut simply reflects shifts in the market.
The Medical Protective Co. of Fort Wayne, Ind., on Tuesday told the state Insurance Department that it has collected enough data in the eight years it has operated in Connecticut to justify a rate cut. Its previous rates were based on the cost of losses sustained by competitors, MedPro said.
The state Department of Insurance said in a statement that the insurer, known as MedPro, was sold by General Electric Co. last year to Berkshire Hathaway, “which is more willing to accept properly underwritten insurance risk.”
Calls seeking comment from MedPro and Berkshire Hathaway were not immediately returned Wednesday. A spokeswoman for MedPro also did not respond to an e-mail.
Matthew C. Katz, executive director of the Connecticut State Medical Society, said the rate cut may not make much difference.
“Any reduction is a good thing,” he said. “This is the first time we’ve seen any type of reduction. We really don’t know what that means. It may not make a difference. It may not make an impact.”
MedPro represents 103 doctors in Connecticut, a fraction of the 7,000 to 8,000 practicing physicians in the state, he said.
Several years ago, doctors and trial lawyers battled in the General Assembly over legislation curbing medical malpractice costs. Physicians’ groups said doctors, particularly obstetricians and gynecologists, would flee the state because of skyrocketing rates.
Tom Baker, a professor of insurance law at the University of Connecticut, said MedPro’s rate cuts reflect costs that are settling down after soaring earlier this decade.
“It’s cyclical and we’ve been through a really hard market that started in 2001, 2002 that produced all this excitement about a crisis in medical malpractice,” he said. “They’ve taken in a lot more money than they had to pay out in claims. You don’t have to be a rocket scientist to figure out how the market works.”
Neil Ferstand, executive director of the Connecticut Trial Lawyers, which has battled with doctors over malpractice issues, said rates have stabilized over the last few years “and now it’s time for insurance companies to start lowering those rates.”
Dr. Cecil Wilson, chairman of the board of the American Medical Association, said the malpractice rate cut is not a trend.
“I think it’s isolated,” he said. “We commend them for that cut, but rates already are remarkably elevated.”
Obstetrician-gynecologists pay an average of $170,000 for a one-year malpractice insurance policy, Wilson said.
“You’ve got to deliver a lot of babies to pay that,” he said.
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