Nev. Doctors Get Helping Hand

Nevada will offer less expensive medical malpractice insurance to help doctors maintain their practices, Gov. Kenny Guinn announced here Wednesday.

The formation of the Nevada Essential Insurance Assn.--launched with a $250,000 contribution by the state--is only a stopgap measure to address a crisis that ultimately needs to be resolved by state legislators, Guinn said.

The program will provide medical malpractice coverage to physicians who are being denied coverage among the state-authorized carriers, and who are being charged premiums by out-of-state carriers that cost upward of four times what the doctors have previously paid.

“This is the first really positive news that Nevada physicians have had in months,” said Larry Matheis, executive director of the Nevada State Medical Assn. “We haven’t yet seen the crisis abate, but this offers a temporary respite and hopefully we’re on the road to recovery. We’re pleased the state has acted swiftly.”

The governor acted after state Insurance Commissioner Alice A. Molasky-Arman concluded March 4 that malpractice insurance is no longer readily available in the state.

Under Guinn’s program, a board of directors appointed by Molasky-Arman will set premium rates sufficient to absorb losses paid out in malpractice lawsuits.

The insurance coverage, which is allowed by state law under emergency situations, will begin April 15.

“This is a short-term solution that addresses the immediate issue,” Guinn said. “I’m prepared to work with the Nevada Legislature on reforms that will provide stable and reliable medical malpractice insurance well into the future.”

The state-sponsored insurance pool may allow the city’s only trauma center to remain open, after its closure was threatened because two trauma surgeons could not afford insurance. “This is a step in the right direction, an interim solution to get us through to the legislative session next year,” said Dr. Dale Carrison, director of the University Medical Center emergency department.

The crisis surfaced in December, when the St. Paul Cos. of Minnesota, which had insured about 60% of the state’s doctors, abandoned its medical malpractice business because of huge financial losses nationwide. Las Vegas, with about two-thirds of the state’s population, was especially hard hit.

The company said it was experiencing some of its worst losses in Nevada, where it was paying about $1.80 in malpractice judgments and settlements for each $1 it received in doctor premiums.

Other companies sharply increased their premiums, and have denied coverage to many doctors in high-risk practices. Some doctors are being charged premiums in excess of $200,000.

As a result, dozens of Las Vegas physicians--particularly those in obstetrics, emergency medicine and specialized surgery--have closed their practices in recent weeks, and officials feared that more than 10% of the doctors would be forced to quit by summer, unable to pay premiums that outstrip their take-home pay, and jeopardizing the delivery of health care in Las Vegas, which already is underserved by doctors.

Sharply increased premium costs also are confronting doctors in other states that, like Nevada, do not limit the amount of pain-and-suffering damages paid in malpractice cases.

Malpractice premiums are escalating less in California, where 1975 tort reform limits pain-and-suffering damages to $250,000.

Dr. Ikram Khan, who advised Guinn on behalf of the Nevada Medical Liability Physician Task Force, called the governor’s decision “relatively good news” because most doctors will find the new premiums more affordable. But he warned that the premiums may still be too expensive for many doctors, and that physicians still must secure, through private companies, so-called tail coverage--insurance that protects them from lawsuits for malpractice that occurred before their new policies take effect.