Malpractice insurance law seems to be working

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In Illinois’ intense debate over the cost of medical malpractice, insurance companies and trial lawyers are often bitter enemies. Kim Presbrey is determined to change that.A former president of the Illinois Trial Lawyers Association, Presbrey has started an insurance company promising doctors more choice and better deals on expensive malpractice coverage.

The Aurora attorney is pumping a lot of money and hard work into challenging the state’s major medical insurance company, a doctor-owned business that has more than 65 percent of the malpractice market. Presbrey predicts his new Doctors Direct Inc. will make money for him and cut costs for doctors feeling the pinch of rising insurance costs.

‘’We expect to make money,’’ he said. ‘’To the extent that we are able to decrease their premiums at some level, I think we’ll save everybody money.’’

It may even pay off for the Illinois patients who need care that’s growing more expensive and inaccessible.

That was the goal last year when state officials approved changes in the law meant to encourage more competition for malpractice insurance.

Some doctors were fleeing the state or retiring because of rising insurance premiums — some of which had more than tripled, topping $100,000 a year in some cases. Doctors and insurers blamed the increases on out-of-control lawsuit awards, while trial lawyers and victim advocates blamed insurance mismanagement.
Promoting competition

In response, legislators approved some limits on lawsuit awards but also strengthened state oversight of doctors and insurers. The major insurer, ISMIE Mutual Insurance Co., was forced to promote competition by opening its ratemaking formulas to other firms.State regulators say the result is what they hoped for.

“The marketplace is increasingly competitive, and that competition s going to benefit the physicians and surgeons,� said Michael McRaith, director of the state Division of Insurance. ‘’It’s going to benefit all of us who pay for health care.�
‘Going to be really surprised’

The creation of Doctors Direct is not the only effect of the new law. ISMIE cut its rates 5.2 percent after McRaith ordered the company to try to cut them. Four other insurers cut their annual base rates, too. Medical Protective Co. cut prices 32 percent and announced plans in October to expand in Illinois.McRaith said other companies also are considering writing new policies.

But officials at ISMIE, which was created by the Illinois State Medical Society, say Doctors Direct may find success elusive.

“If they think they can make money and make big money … they’re going to be really surprised,� said Dr. Harold Jensen, ISMIE’s chairman.
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