Start-up costs approved for malpractice program

Monday, March 25, 2002 | 10:36 a.m.

SUN CAPITAL BUREAU

CARSON CITY -- The state Board of Examiners today approved $250,000 from an emergency fund to start a company to provide medical malpractice insurance for doctors who can't get policies in the private market.

Gov. Kenny Guinn called it a "bridge to get us through until the Legislature" next year. He said the company would "buy us some time" to come up with solutions to the problem.

The governor, attending the meeting by telephone from Las Vegas, said he will probably come up with some recommendations, as will a legislative committee headed by Assembly Majority Leader Barbara Buckley, D-Las Vegas.

Insurance Commissioner Alice Molasky-Arman said she hoped to name the board of directors of the Medical Liability Association of Nevada this week. And the directors will choose a private company to run the operation.

The $250,000 is for startup costs. The Examiners Board, at the suggestion of Guinn, agreed that the money must be repaid to the state with interest if and when the company is sold.

Molasky-Arman, saying medical malpractice insurance is either not readily available on the open market or not affordable for doctors, has recommended that the premiums charged by the state-operated company be an average of about 15 percent higher than the adjusted average being charged by the private companies. She proposed taking the average rate charged by the six major companies after excluding the high and low rates.

"The rationale for this is that the high company may be priced such that no business would be written voluntarily and that the low company may have inadequate rates," she said in a report to the Examiners Board.

She found the average rate in Clark County for cardiovascular surgery at $61,5110; emergency medicine at $37,941; general medicine at $16,164; general surgery at $64,159; internal medicine at $17,269; OB/GYN at $98,268; orthopedic surgery at $788,847; and pediatrics at $18,131.

The rates for Northern Nevada are considerably lower.

The crisis in malpractice insurance was prompted by the withdrawal of St. Paul Cos. from the market, not only in Nevada but nationwide. The company said it paid out more in claims in Nevada than it took in with premiums.