Byline: Jeff DeMoss
Sep. 25--A Wednesday decision by Farmers Insurance Group to stop selling medical malpractice insurance won't directly impact the Top of Utah, but local health professionals say it's another indicator of a local and national health care crisis.
Farmers spokeswoman Mary Flynn said the decision was spurred by the company's medical malpractice division loss of more than $100 million in 2002, its biggest yearly loss on record.
'Medical malpractice represents less than 1 percent of our business, but has become an increasing drain on the company for three years in a row now,' she said. 'Now we can focus more on our main business.'
The company primarily writes home, auto and life insurance.
Farmers, which operates in 18 states, has two malpractice policyholders in Utah -- Allen Memorial Hospital in Moab and Gunnison Valley Hospital in Gunnison, both of which will have to find a new provider at the beginning of next year amid an ever-narrowing list of choices.
'It's getting tougher to find, and more expensive to keep,' Martin J. Oslowski, president and chief executive of the Utah Medical Insurance Association said. 'The trend in Utah is exactly the same as that of the whole country -- toward a disaster.'
Malpractice insurers have seen their profits devoured as claims have soared in recent years, followed by skyrocketing premium costs for doctors. UMIA, which insures more than two-thirds of Utah's doctors, last year hiked its premium rates 35 percent to offset mounting underwriting losses.
Intermountain Health Care, which operates 20 hospitals and three of six in the Top of Utah, indemnifies its physicians using its own resources, while the University of Utah Hospital has a malpractice trust fund in place.
Calls to Davis Hospital and Medical Center and Ogden Regional Medical Center were not immediately returned Wednesday.
A group of about 200 Utah doctors and medical students converged on the Capitol earlier this year with the message that the state needs 'tort' reform laws -- rules that limit the amount the plaintiff in a malpractice suit can receive in damages.
California recently implemented tort reform laws, and its situation has stabilized considerably relative to the rest of the nation, Oslowski said.
Farmers isn't the first to abandon medical malpractice insurance.
St. Paul Cos., the nation's second-largest provider, gave it up in 2001.
Farmers is working with state regulators in determining how it will phase out its existing Utah malpractice policies.
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(c) 2003, Standard-Examiner, Ogden, Utah. Distributed by Knight Ridder/Tribune Business News.
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