Drop in doctors’ malpractice rates expected to take time

Tuesday, Aug. 6, 2002 | 9:52 a.m.

Medical malpractice insurers say it could take as long as two to 10 years for doctors' premiums to significantly drop despite recent passage of tort reform.

"It's just too early to tell as far as meaning, impact and even (court) challenges are concerned," said Ron Neupauer, vice president of the doctor-owned Medical Insurance Exchange of California.

"After tort reform was passed here in California in 1975, it spent 10 years in the courts. In the mid-'80s rates began to stabilize and go down.

Hopefully, because Nevada is a smaller state, the challenges will not take so long," Neupauer said.

Robert Byrd, chairman of the Medical Liability Association of Nevada, said the newly passed tort reform measure is on the agenda for his board's Aug. 12 meeting. But, he said, the focus will be the entire bill, not necessarily a reduction in rates.

"Passage of the bill was a very positive step and the sooner losses go down, the sooner rates will go down," Byrd said. "I believe it will be two to three years before we see significant reductions in rates."

Chip Wallace, spokesman for the doctor-owned Nevada Mutual Insurance co., said his company hopes to reduce premiums by 5 percent within a month. He said, however, the firm's actuaries have yet to analyze the measure and a lot depends on Nevada attorneys not challenging the measure in the courts.

"A five percent reduction is our goal, our objective," he said, "but we cannot promise that in stone at this time."

A number of doctors, in the wake of passage of Assembly Bill 1 of the Legislature's special session Thursday, said they feared that the measure was fraught with loopholes, especially two exceptions to a $350,000 cap on pain-and-suffering awards that could boost judgments to $1 million.

The bill becomes effective Oct. 1. It's exceptions to the cap are for gross malpractice and for cases in which a judge finds "exceptional circumstances" warrant a larger award.

The crisis came to light in December with the pullout of the state's largest medical malpractice insurance provider, St. Paul Cos. of Minnesota. Some doctors have said if rates don't go down -- and soon -- the exodus of quality physicians will continue.