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Paying to ‘Keep Our Doctors’ in state

Anne Knowles

One of the largest supporters of Keep Our Doctors in Nevada is part of a huge holding company that also owns one of the state’s largest medical malpractice insurers.

Keep Our Doctors in Nevada is the doctor-led group working to pass legislation that would cap medical malpractice awards and limit doctor and hospital liability.

The southern Nevada group, headed by Dr.

Rudy Manthei, a Hendersonbased ophthalmologist, is the force behind a statewide ballot initiative and Senate Bill 97, the tort reform bill that narrowly passed in the Senate last month.

The group’s efforts have been criticized by the Nevada Trial Lawyers Association, which says the insurance industry, not litigation costs, is to blame for rising medical malpractice insurance premiums, and by some legislators, including Sen.Terry Care (DClark County) who has questioned the real power driving the group.

“What insurance companies have contributed in any way to SB97? Or to the initiative?” asked Care during the Senate floor session last month when SB97 passed by a vote of 13-8.

Care said also that the insurance industry has been notably absent during the state’s entire debate over medical malpractice, although he suspected the industry has been hiding in the wings.

According to forms filed with the Secretary of State, Keep Our Doctors in Nevada last year raised more than $220,000, with $100,000 of that contributed by Sunrise Hospital and Medical Center in Las Vegas.

Sunrise is owned by HCA Inc., often identified as the country’s largest hospital chain with 173 hospitals and 74 surgery centers nationwide.

Its Nevada properties include Sunrise, MountainView Hospital and as well as the Flamingo, Las Vegas and Sahara Surgery Centers, all located in Las Vegas, and another planned hospital, Southern Hills Hospital and Medical Center.

HCA also owns Health Care Indemnity Inc., a medical malpractice insurance company which now may be the largest such carrier in Nevada.

In 2002, HCI ranked second only to St.

Paul Medical Liabilities Insurance Co., a carrier that dropped out of the medical malpractice insurance business in late 2001.

Last year, HCI wrote over $10 million in medical practice premiums in Nevada, giving it almost 13 percent market share, compared to St.

Paul, with 14 percent market share and $11.5 million in direct premiums written, according to the Division of Insurance.

That’s nearly triple the premium dollars it wrote six years ago.

According to the Colorado Division of Insurance, where HCI is incorporated, the company wrote $3.7 million in direct premiums in Nevada in 1996.

HCI insures only HCA hospitals and some of their doctors.

In West Virginia, for example, HCI was allowed by the state’s insurance division to begin insuring doctors as well as hospitals after St.

Paul’s departure left a serious gap in the market.

In Nevada, HCI has filed rates for physicians and surgeons with the Division of Insurance.

Sunrise spokeswoman Cheryl Smith in Las Vegas doesn’t know which carrier insures the hospital or its physicians, although she said the hospital does everything it can to support its doctors.

Calls to HCI’s parent HCA, in Nashville, were not returned by press time.

The insurance division, though, has been told by HCI that it insures some of its Nevada hospitals’ emergency room doctors, who are subject to high medical malpractice premiums.

HCI is the second largest medical malpractice insurer in the state, but HCA hospitals account for about one fifth of the state’s community hospitals, based on the number of beds.

HCA hospitals house 880 beds, or 21 percent, while the total community hospital beds in the state are 4,264, according to a Nevada Hospital Association listing of the state’s hospitals.

That doesn’t include the state’s rehabilitation, psychiatric or specialty hospitals, or its surgery centers, which include HCA’s three Las Vegas centers.

In southern Nevada, where the medical malpractice insurance issue is most acute,HCA hospital beds make up about a third of the beds in the area.

Sunrise says it backs Keep Our Doctors in Nevada in hopes of stemming the tide of doctors leaving practices in the state due to high medical malpractice premiums.

“We lost 100 physicians in 2002 and already lost 50 in the first quarter of this year,” said Sunrise’s Smith.

“That impacts surgery and ob/gyn.”

Sunrise, however, doesn’t know why doctors leave the hospital unless the physician volunteers the information.

“It could be any number of reasons,” said Smith.

“Tort reform is certainly one of them.”

The other contributors to Keep Our Doctors in Nevada include the Nevada Physicians Medical Liability Task Force, another physician-led group working to change medical malpractice law; the Nevada State Medical Association; and Med PAC, a medical political action committee.

Med PAC’s contributors are made up of Las Vegas doctors, 75 percent of whom are affiliated with HCA hospitals.

(Doctors often are affiliated with, or have privileges to work at, multiple hospitals.) Three other medical PACs, for ophthalmologists, anesthetists and obstetricians/gynecologists, also contributed to Keep Our Doctors in Nevada.

The latter two did not appear to be registered as PACs on the state’s Secretary of State web site, and Manthei was unable at press time to provide the PACs officials names.

The group has raised more money, including from other Las Vegas area hospitals, said Manthei.

But those contributions have not been required to be reported to the Secretary of State yet, and Manthei did not know the amount of money raised or the amount contributed by specific donors.

Keep Our Doctors in Nevada sprung up after the Nevada legislature held a special session last summer and passed AB1, a bill that places a $350,000 cap on noneconomic damages awarded to plaintiffs in medical malpractice cases.

At the time, both the doctors’ groups and attorney associations were onboard with AB1, but the doctors became disillusioned with it, said Manthei, after it passed.

The group’s petition for a ballot initiative, signed by more than 95,000 voters, and the nearly identical SB97 are designed to remedy what Manthei says are flaws in AB1.

SB97 is modeled on California’s so-called MICRA laws that placed a $250,000 cap on damages as a way to bring down medical malpractice insurance premiums.

One way the bill is stricter than California law, though, is in terms of joint and several liability.

Under California law, and Nevada’s AB1, all providers are severally liable for non-economic damages but jointly liable for economic damages.

Under SB97, all providers are severally liable for both kinds of damages.

That means a defendant, including a hospital, can only be responsible for that portion of the award for which the defendant is liable.

If defendants cannot come up with their shares, a plaintiff cannot make up the difference from another defendant.

“It limits a hospital’s liability,” said Bill Bradley, head of the Nevada Trial Lawyers Association.

“It’s a windfall for the hospitals.”

SB97 also puts a cap on attorney’s contingency fees, allows for periodic, rather than lump-sum, payments of awards, takes into account a plaintiff ‘s “collateral sources,” of income, such as disability insurance, and applies the cap per event rather than per defendant, per plaintiff.

SB97 was sent from the Senate to the Assembly Judiciary where it will be heard this Tuesday.

The deadline for bills to move out of committee is Friday.

If SB97 doesn’t survive the Assembly, then Keep Our Doctors in Nevada’s petition will go the voters as a ballot question in 2004.