It isn't likely to solve the so-called malpractice insurance crisis, but a new company created by the Ohio Hospital Association began providing a welcome alternative last week to hard-pressed physicians and hospitals scrambling to find someone-anyone-to provide coverage for lawsuits.
The Ohio Hospital Association has invested $10 million in OHA Insurance Solutions, which won approval last month from state regulators to provide coverage to physicians beginning on Jan. 1. A number of hospitals have invested in or announced plans to join the venture, which is expected to offer insurance to hospitals in March.
Ohio is one of several states where a limited market in commercial carriers has triggered intervention by hospitals and hospital associations. Seven months ago, the Kentucky Hospital Association launched a malpractice insurer owned by 21 rural hospitals. Earlier last year in Alabama, four hospitals formed a company to sell malpractice coverage.
"Our goal initially is to help in terms of the availability of coverage for doctors," said Susan Stanfield, chief executive officer of OHA Insurance Solutions. "On a long-term basis, the goal is to help provide both stability and predictability in pricing."
Ohio is one of 19 states the American Medical Association has designated as in a "crisis" mode because of skyrocketing insurance costs.
Malpractice insurance rates have jumped an average of about 35% during the last year or so in Ohio, said Bill Byers, a spokesman for the Ohio State Medical Association. Meanwhile, the number of firms offering malpractice insurance to doctors has fallen in recent years from about 20 to just five-and three of those are facing financial difficulties, he said.
Ohio doctors' insurance woes have not been eased thus far by the passage of a $350,000 cap on noneconomic damages, which took effect in April. It could take several years before the impact of that new law takes hold, officials said.
Stanfield said physicians and hospitals should not expect cut-rate premiums. The rates will be "actuarially based," which means the company does not expect to undercut prices from existing insurers, she said. Stanfield said she expects the company to provide coverage to about two dozen doctors this month, growing to perhaps a "few hundred physicians and three to five hospitals."