Rate hike expected to drive out more doctors

Tuesday, Feb. 11, 2003 | 11:12 a.m.

Area physicians say a proposed malpractice insurance rate hike from a company that already had raised its rates last fall is certain to drive more doctors from Nevada unless the state places lower caps on malpractice damages.

Doctors Company of Napa, Calif., is seeking rate hikes that would average 17 percent in Clark County and 15.7 percent elsewhere in Nevada. That translates to a statewide 16.9 percent increase on top of the 26 percent rate hike the company received in September.

The insurer's proposed rate hikes are based in large part on lawsuits that have been filed against doctors insured by the company. The company has to convince the state that the amount of money it stands to lose from these claims is enough to justify an insurance rate increase.

"The Doctors Company rate increase is solely due to the current Nevada experience that we have," company spokeswoman Cheryl Fuller said.

Dr. John Nowins, president of the Clark County OB/GYN Society, said his group is having quite a "Nevada experience" too.

"These increases are especially significant for OB / GYNs," he said. "This is another reason why doctors don't want to hang in here."

The society has determined that 42 obstetricians have left Clark County or closed their practices over the past 18 months because of rising insurance premiums, leaving 79 still in practice in Southern Nevada. Society officials have said that they cannot afford to stay in business because the amount of revenue they generate is not keeping pace with their increasing expenses, particularly from insurance costs.

Dr. Robert Gatlin, a Henderson obstetrician, said the county is losing roughly two obstetricians a month, which is making it increasingly difficult for pregnant women to obtain proper care. This latest rate increase proposal is foreboding, he said.

"If one company increases its rates, they're all going to increase their rates," said Gatlin, who said his medical malpractice premium rose from $37,700 in 2001 to $86,000 last October.

"Half of the obstetricians in Clark County haven't received their increases yet," he said.

Those increases will kick in when the doctors' insurance is up for renewal, which usually occurs annually.

The proposed new rates would take effect March 1 for new policies and April 1 for renewals if approved by the Nevada Insurance Division.

In Clark County, the sharpest base rate hike -- 24.7 percent -- would be borne by dermatologists who perform liposuction, according to documents filed with the Insurance Division. Instead of the $66,041 that each of those doctors would have to pay annually for the standard policy, the rate would be $82,363.

The highest base rates for standard policies would be paid by neurosurgeons. Their current rate of $174,676 would jump up to $199,855. Obstetricians and gynecologists' rates would see their rates go from the current $139,364 to $159,453 and general surgeons' rates would rise from $116,137 to $132,878.

Those rates can be adjusted by surcharges or discounts, depending in part on the nature of a doctor's practice and whether he has even been sued.

Later this week, the Insurance Division is expected to announce its decision in a pending rate case filed by insurer American Physicians Assurance of East Lansing, Mich.