Corrections or additions?
This article by Barbara Fox was prepared for the November 20, 2002 edition of U.S. 1 Newspaper. All rights reserved.
The Medical Inter-Insurance Exchange (MIIX) was founded
in 1977 as a cooperative exchange providing medical malpractice insurance
for doctors in New Jersey and Pennsylvania. At that time major insurance
companies were leaving the market. The Medical Society of New Jersey
worked with the state to create an insurance company to underwrite
professional liability insurance. It was physician supported.
In 1997 it made plans to reorganize as a stock company instead of
reciprocal insurance exchange, and it trades on the New York Stock
Exchange. It made the largest distribution of stock to policyholders
of any medical professional liability insurer, with the average physician
receiving $15,000 in stock. (That year the stock was trading at $18,
but it is about $1.50 now.)
Pundits date MIIX’s difficulties from the date that its former president
was arrested for growing marijuana plants in his attic, but what really
caused the trouble was its attempts at expansion to other states,
including Pennsylvania. At its peak MIIX had 36 percent of the market
share in New Jersey, but 50 percent of its business was written outside
of the state.
Nationally, the median jury award more than doubled from 1996 to 2000,
when it was $1 million. In Philadelphia, juries have been provocatively
generous. And even in cases where the plaintiff gets no money, it
costs an average of $66,000 to defend the case.
"Jury verdicts would be normally $150,000 but are coming back
at $100 million," says Emmalee Morrison, spokesperson for MIIX/Advantage.
Runaway jury verdicts like that are called "the lottery mentality,"
she says. "They are usually appealed but the final numbers never
go out to the public to make the headlines. But it still costs dollars
to go to court. At the end of the day, the company has to look at
the risk level."
Some companies lost so much money they simply closed down. Phico,
a Pennsylvania-based company, closed and had no money left to pay
claims. Phico was said to have underpriced its competition and it
had about a six percent share of the New Jersey business. But apparently
it was using its reserve funds (set aside for future claims) for its
day to day expenses and has been closed down.
MIIX, in contrast, had to take a huge amount from its reserves in
the fourth quarter of 2001 to pay claims, but it is not bankrupt.
It is classified as a "solvent runoff" because it is able
to pay all its existing claims. It just isn’t selling any new policies.
"MIIX had $1.2 billion in reserves set aside for those existing
policy holders," says Morrison, "but we knew we couldn’t continue
to write in an expansion state, i.e. not New Jersey." MIIX is
still trading on the New York Stock Exchange. "The actuaries are
hoping that with less expenses the value of the shares should increase,"
The New Jersey business was significantly more profitable than the
out-of-state business, Morrison says. "For one thing we have history
here. We know the players, we know the market. And the flagship company
So a new company, MIIX/Advantage, was formed just for New Jersey doctors.
CEO Patricia Costante, 45, went to the department of banking insurance
and requested permission to start another company. An alumna of Douglass
College, she has an MBA from New York University and joined MIIX in
1996. "The new company wouldn’t be here if it weren’t for her
ability to be a communicator," says Morrison. "She is a physician
advocate above anything else. After all the things that happened this
year, many professionals would have walked away and let it die. She
wanted to create an option. The landscape was very bleak in terms
of physician options and carriers in the state. and I think she has
a very good rapport across the state. She was tramping north to south,
raising capital to start the new company."
In a 90-day campaign to raise $30 million, MIIX raised $28.5 million
and started issuing policies on September 1. Doctors pay a contribution
to start the company plus they pay premiums that average $11,000 each.
Each founder gets one vote, and in the first offering more than 2,500
physicians were enrolled.
"If you are currently insured with MIIX, you can pay a capital
contribution and be accepted. If you are a new physician you would
have to go through regular underwriting requirements."
MIIX/Advantage differs from the original MIIX, which had a board that
consisted only of doctors. The new board is smaller and has diverse
08648-2382. Patricia Costante, CEO. 609-896-2404; fax, 609-896-2910.
Last year Princeton Insurance Company wrote $146.2 million
worth of premiums in malpractice insurance for individual practices
and institutions, including more than 8,000 physicians in New Jersey.
It also covers medical malpractice in Maryland, Delaware, and Virginia
but has cut off its malpractice coverage in Pennsylvania. "The
legal situation has not been good for us," says Karen Meyers,
spokesperson, "and we have decided to reallocate our surplus elsewhere."
Meyers defends the decision to pull out of Pennsylvania by emphasizing
how the company picked up the slack for New Jersey doctors. "We
tried to be responsible. This year we took on 3,100 additional physicians
from New Jersey as a result of difficulties that our competitors were
facing — mostly from MIIX but not all. We tried to be responsible.
We did what we could."
It also does small business and workers comp insurance for small business
in 16 states and offers malpractice insurance to other health care
practices, such as dentists, podiatrists, optometrists, mental health
workers, and allied health care providers like EMTs and physical therapists.
It sells directly to doctors and small businesses or through the agents
Princeton 08543-6305. Donald E. Smith, president. 609-452-9404; fax,
609-734-8461. Home page: www.princetoneasyaccess.com
888-452-2200; fax, 609-497-1274. Home page: www.BollingerPrinceton.com
Box 6710, Lawrenceville 08648-6710. Cara Giquinto. 609-896-3434; fax,
609-895-1468. Home page: www.bordenperlman.com
New Brunswick 08903-0732. Mike McCormick. 732-247-9800; fax, 732-828-0061.
Home page: www.pavesemccormick.com
Princeton 08540-1567. Gabrielle Griffith, agent. 609-924-9222; fax,
Hamilton 08619-0006. Robert Cottone, manager, healthcare practice.
609-586-7474; fax, 609-586-3991. Home page: www.rueinsurance.com
Doctors often complain about non-doctors making decisions
on reimbursement. Who are the people pushing the paper to make those
decisions? They work in an occupation labeled "health information
coding," and if you are looking to change careers, the future
for coders is bright.
Go to the county colleges — Mercer, Middlesex, and Raritan Valley
— for courses in coding and other areas that will help you get
and keep jobs in doctors’ and dentists’ offices and in medical insurance
for instance, includes six required courses, 39 three-hour sessions
that cost about $10 an hour. Call 732-906-2556. Start with anatomy
and physiology and progress to terminology and the nitty-gritty of
coding for everything from emergency room charts to endoscopy reports.
A medical billing course is optional.
you to take the doctors’ dictated audiotapes and transcribe them.
If it seems daunting, it is, because such dictation is only slightly
more clear than the doctors’ legendarily illegible handwriting. But
insurance companies urge more doctors to use this method of making
notes because stymies malpractice suits. Be forewarned: "This
program requires a significant amount of work outside the classroom,"
warns the brochure, and it promises that at the end of the course
students will have gained only a "basic" knowledge of transcription.
To even take the course you must have a minimum typing speed of 45
words per minute plus other significant secretarial skills. One of
the five required courses is on the legal aspects of health information,
but you start out with 78 hours of anatomy and terminology at about
$10 per hour. Call 732-906-2556.
twice-weekly sessions starting Wednesday, January 15, at 6:30 p.m.
Six three-hour sessions cost $130. Call 609-586-9446. Described as
a "jump-start" course, it does not require a medical or scientific
background and appeals to those with test-phobia — it gives self-evaluation
quizzes. Follow that with an advanced records course, one on medical
billing, one on anatomy, two on coding, and one on insurance, law,
and ethics. Electives might be medical transcription, business communications,
and management courses.
January 7, from 4 to 7:30 p.m. at Mercer Vo-Tech, 1070 Klockner Road,
though the course is sponsored by MCCC. Call 609-586-9446. Taught
by Charlene Fenster, the 14-session course prepares the student for
the state license examination and costs $532 including lab fees and
A dental radiology course at Raritan Valley College is done in collaboration
with UMDNJ and starts Wednesday, March 12. Cost for 90 credit hours
is $475. Call 908-218-8871.
starting Tuesday, January 14, at 6 p.m., on the topic of Pharmacology
Review. Taught by Lawrence Goldman, these courses can be used to get
an entry-level position or to take the national exam. The five-course
certificate program costs $1,150. Call 609-586-9446.
starts at Mercer Thursday, January 23, at 6:30 p.m., with an eight-session
foundation course taught by Lauren Murphy and Michael Toscani. Cost:
$675. Those signing up should have a BS in life science, nursing,
pharmacy, medical technology, or statistics (609-586-9446).
A clinical research certificate is also offered by Raritan Valley
in collaboration with Barnett International/PAREXEL. (908-218-8871).
The courses cost about $40 per hour. In the spring semester they include
career opportunities in clinical research and developing clinical
data management skills.
RVCC also has courses for physical therapy aides, patient care assistants,
and pharmacy technicians. Its medical terminology course begins Monday,
January 27, seven sessions for $274. It has an ophthalmic assistant
course starting Tuesday, April 22, at 6:30 to 9 p.m. The 20-sessions
cost $849 including materials. (Call 908-218-8871.)
Institute of New Jersey, the workforce in pharmaceutical industry
and in medical technology is expected to grow from 66,000 jobs to
more than 80,000 in the next eight years. Such predictions may encourage
those making career decisions now.
Corrections or additions?
This page is published by PrincetonInfo.com
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