The Gazette examined medical malpractice records on file with
the state Board of Medicine. State law requires providers to report all
malpracticeclaims to the board and this information is
The number of malpracticeclaims dropped from 321 in 1995
to 301 in 1999. The average for the eight-year period remained steady at
about 300. These numbers include settlements, jury verdicts for the doctor
and patient, dismissed cases and cases that never made it to court.
In 1999, the Legislature amended the law, saying dismissed cases no
longer needed to be reported to the Board of Medicine. This law went into
effect in mid-1999, though more than 100 dismissals have been reported
Total amount of settlements and judgments also went down. In 1995,
$48.2 million was paid to plaintiffs, compared with $32.3 million in 2000.
The highest total amount paid between 1995 and 2000 was $50.7 million in
To justify a rate increase on doctors, insurance companies must show
the state insurance commission that they are losing money.
Hanley Clark was insurance commissioner when the agency approved the 35
percent overall rate hike for Medical Assurance. He says Medical Assurance
gave him a profitability report showing the company was losing money in
"My job is to make sure the state is adequately insured," said Clark,
who left his post Jan. 16, when Gov. Bob Wise appointed a new
"Part of that mission is helping insurance companies remain solvent."
Medical Assurance's statements show the amount spent on claims
is increasing, but they are also bringing in a greater amount from the
For the period between 1995 and 1999, West Virginia doctors paid the
company $71.8 million for malpractice insurance. For the same
period the company paid out $44.2 million in settlements and jury
verdicts. That amount includes defense costs, such as attorneys' fees and
the costs of expert witnesses.
"Even if cases don't go to trial, we still spend tens of thousands of
dollars," O'Neil said. "Defense lawyers are very costly."
According to the Insurance Commission, Medical Assurance spent $12.6
million in 1999 to resolve medical malpracticeclaims. Yet,
only $6.3 million was paid out in settlements and jury awards to
plaintiffs, according to Board of Medicine records. The other $6.3 million
went toward defense costs. "No administrative costs are included in those
loss figures, only our losses in terms of settlements, plaintiff's
verdicts and defense costs," O'Neil said.
Even more dramatic are numbers from 1995, the first year Medical
Assurance was in the state. A report filed with the insurance commission
Yet, claims data from the Board of Medicine showed the company paid
only $5,000 to plaintiffs.
The story is the same in 1996, when the company spent $8.6 million with
only $814,500 going to plaintiffs.
During 1997 and 1998 a greater percentage went to plaintiffs, with $2.7
million out of $5.8 million in 1997, and $5.7 million out of $8.4 in 1998,
paid in settlements and jury verdicts.
In the company's 1999 annual report, president and CEO A. Derrill Crowe
boasts that Medical Assurance leads the industry in the amount it spends
defending claims, and admits it may "seem extravagant."
O'Neil argues that a rate increase was necessary because
malpractice insurers must set aside extra money because
claims often take years to be resolved, and no one can predict how
much those claims will cost. As of Dec. 31, Medical Assurance had
$86 million in reserves to pay for future suits, he said.
According to Insurance Commission records showing the company's loss
record between 1995 and 1999, Medical Assurance has enough money in
reserves right now to cover claims for at least the next five years
- even if it doesn't take another penny from doctors.
Last week at a meeting with health care providers, new insurance
commissioner Jane Cline promised to review how her agency grants
permission for medical malpractice rate increases.
"The commission has been at fault in not reporting to the Legislature
on the health of the malpractice climate," she said. "We want
better review of rate filings and a better system to approve of rate
increases before they are enacted."
"The Price of Practice" continues Tuesday in The Charleston Gazette
with a look at some of the more damaging cases involving medical
malpractice, and what one state has done to deal with its own
To contact staff writer Martha Leonard, use e-mail or call 348-1254.