A Pennsylvania insurance company has announced that it will no longer offer malpractice insurance to more than 1,300 doctors in the Washington area, saying it has become too costly to insure physicians who have solo practices.
Phico Insurance Co. of Pennsylvania said that of the area doctors whose policies it will not renew, about 1,000 are in Virginia, mostly in the Washington suburbs, more than 200 are in Maryland and the remainder are in the District. The action will be effective Nov. 1.
Phico spokeswoman Pat Hogan said yesterday that the company, based in Mechanicsville, Pa., will send letters to doctors in seven states next week notifying them of the change. Hogan said the policies are being dropped because the company has lost more than $37 million since 1979, when it began covering doctors in solo practices. She said the losses have been largely due to huge awards in malpractice cases.
"We will continue to insure physician groups of 10 or more," Hogan said. Several area doctors said yesterday that few practice in groups that large.
"We're not abandoning the physician market. We're shifting our focus to institutionally based physicians," Hogan said. Hospitals usually have better procedures for risk management than solo practitioners, she said.
In Virginia, obstetricians will be the hardest hit because none of the three other insurance companies offering medical malpractice insurance in the state is writing new policies.
Obstetricians are being dropped by many insurers because they are among the specialists most often sued. For the same reason, their premiums tend to be higher than others, prompting 12 to 19 percent of the nation's obstetricians to stop delivering babies, according to the American College of Obstetrics and Gynecology.
"I've given up my OB practice as of this Wednesday," said Dr. Darrel Barnes of Alexandria. Barnes, who has been in practice since 1975 and was covered by Phico, said he could no longer pass the soaring insurance costs along to his patients.
Barnes said that two years ago he paid $8,000 a year for malpractice insurance, and that his rates jumped to $25,000 in 1985. He raised his fees and lost several patients, he said.
When his annual premium shot up to $46,456 this month, he said, "I could no longer in good conscience pass that on to my pregnant patients."
"The insurance companies are making a fortune, no matter what their books say, and now they're pulling out," said Dr. Michael Roff, an obstetrician in McLean who also is covered by Phico.
Walter Andes, the assistant executive vice president for the Virginia Medical Society, said the insurance problem is so critical for doctors in the state that the society is supporting a move by the state Bureau of Insurance to create a quasi-public underwriting association to insure the doctors who are being dropped.
The deputy state insurance commissioner, Peter Synnott, said Phico will continue to cover 1,700 hospital-based doctors in Virginia. He also said a meeting to discuss the formation of the association has been set for October.
Three days ago, Barnes, the Alexandria physician who decided to drop his obstetrics practice, arranged for another doctor to look after those patients. He sees only women with gynecological problems, he said, and has applied for a new malpractice policy with another company.
His premium will cost $14,800 for the year, he said.