Med-Mal in Washington – When Carriers and the Regulatory Body Cooperate

The medical malpractice market in Washington state has improved immensely in recent times, but the debate about tort reform is just getting started. Competing initiatives will be in front of voters this fall with the trial lawyers on one side and physician groups and hospitals on the other contending the issue vigorously. To add to the confusion additional options were deliberated this past legislative session but failed.

The past three years have been referred to as “the perfect storm” in relation to med-mal. Washington Casualty, a leading writer of physician’s med-mal in the state, elected to withdraw from physicians malpractice in 2002-leaving over 1,300 physicians looking to replace coverage in a market that was not interested in growing an unprofitable line of business.

Working with the cooperation of the top med-mal carriers in the state and the Washington Insurance Council, Insurance Commissioner Mike Kreidler established the Medical Malpractice Marketing Assistance Program (MAP) in 2002. The MAP was a voluntary marketing assistance program whereby the 10 participating carriers agreed to underwrite submissions from the top-down as opposed to bottom-up. Executives from the carriers and underwriting managers reviewed submissions in a concentrated effort to write acceptable business in a market that was difficult at best. Defensive underwriting was the prevailing norm and most of these physicians would have been denied coverage as new business in the private market by front line underwriters for minor underwriting deficiencies or unacceptable practice profiles.

The MAP was very successful and the carriers participating should be commended for their commitment and efforts they put forth in tempering what was a very difficult market place. The MAP has had 62 submissions and of these 52 would be considered eligible. The Doctors Company, G.E. Medpro, and Physicians Insurance wrote 32 of these submissions. If they had not, the alternative for many would have been to close their practice or move to another state. This voluntary collaboration not only provided relief for those physicians, but also saved many communities from a crisis of limited access to needed medical care.

The debate that has arisen from this crisis continues with the initiative process and legislators trying to find long-term solutions for market stabilization. While significant rate increases have healed many wounds and the market is much healthier, the debate continues as to how to keep these crises from happening in the future.

The debate has been contentious and is convoluted with the limited amount of consistently credible data. What data does exist is embraced or interpreted by both sides to support their position, adding to the confusion. Doctor-owned insurance companies write over 85 percent of the physician malpractice in Washington. This diffuses the “greedy insurance companies” mantra that often follows a hard market.

Regardless of the outcome, recognition has to be given to Commissioner Kreidler for his leadership in the establishment of the voluntary MAP, and the carriers for their commitment and efforts in making a success.

David Hargreaves is executive vice president of Argus Insurance Inc. in Yakima, Washington and is past president of the Independent Insurance Agents and Brokers of Washington.