Competition gives Illinois doctors malpractice insurance options
December 10, 2006 SPRINGFIELD, Ill. - In Illinois' intense debate over the cost of medical malpractice, insurance companies and trial lawyers are often bitter enemies. Kim Presbrey is determined to change that.
A former president of the Illinois Trial Lawyers Association, Presbrey has started an insurance company promising doctors more choice and better deals on expensive malpractice coverage.
He's pumping a lot of money and hard work into challenging the state's major medical insurance company, a doctor-owned business that has more than 65 percent of the malpractice market.
Presbrey predicts his new Doctors Direct Inc. will make money for him and cut costs for doctors feeling the pinch of rising insurance costs.
"We expect to make money," Presbrey said. "To the extent that we are able to decrease their premiums at some level, I think we'll save everybody money."
It may even pay off for the Illinois patients who need care that's growing more expensive and inaccessible.
That was the goal last year when state officials approved changes in the law meant to encourage more competition for malpractice insurance.
Some doctors were fleeing the state or retiring because of steeply rising insurance premiums -- some of which had more than tripled, topping $100,000 a year in some cases. Doctors and insurers blamed the rate increases on out-of-control lawsuit awards, while trial lawyers and victim advocates condemned insurance mismanagement.
In response, legislators approved some limits on lawsuit awards but also strengthened state oversight of doctors and insurers. The major insurer, ISMIE Mutual Insurance Co., was forced to promote competition by opening its ratemaking formulas to other companies.
State regulators says the result is just what they hoped for.
"The marketplace is increasingly competitive, and that competition is going to benefit the physicians and surgeons," said Michael McRaith, director of the state Division of Insurance. "It's going to benefit all of us who pay for health care." (keep reading)