Medical Malpractice Market in W. Va. Improves

Medical malpractice insurance in West Virginia, once a money-losing business, has become a profit machine for insurers as the number of lawsuits filed against doctors has declined, a report by the state Insurance Commission shows.

Medical malpractice insurers made twice as much money as they spent in West Virginia last year. Insurers’ profit margins were higher than the national average for medical malpractice insurers, the report said.

Doctors have benefited as well. West Virginia Mutual, the state’s largest medical malpractice insurer, cut its rates by an average of 5 percent and plans another 15 percent cut in January, said Bill Kenny, deputy director of the Insurance Commission and the report’s author.

“We’re finally seeing some stability and profitability in the market,” said Kenny, who presented his report to a legislative committee on Monday.

But Kenny cautioned that insurers should not rush to cut rates. Insurers reported big losses in West Virginia between 2000 and 2002 and that could happen again, he said.

The Legislature approved a number of changes to state law, starting in 2001, that made it harder for patients to sue doctors for malpractice. The changes included caps on damages and a requirement that lawyers receive a judge’s certification before filing a lawsuit.

After the Legislature revised the laws, the number of medical malpractice lawsuits filed against doctors in state courts plunged from 379 in 2001 to 193 in 2005.

West Virginia Mutual, which was established as part of the legislative changes, now insures almost two-thirds of the doctors in the state, Chief Executive Officer David Rader told lawmakers.

Rader said the mutual has $50 million in reserves.

Delegate Cindy Frish, R-Monongalia, asked Rader about his salary, which he said is about $300,000 a year, plus a bonus based on the mutual’s performance. He also told Frish that the mutual’s board of directors are each paid about $20,000 a year.

Dr. Richard Lindsay, a physician and lawyer, said the Legislature’s revisions went too far.

“People aren’t filing claims. A lot of attorneys aren’t taking med mal cases anymore, because they can’t afford to,” Lindsay said. “That doesn’t mean there is less malpractice in the state.”

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Information from: The Charleston Gazette,
http://www.wvgazette.com