So the other day, Ann Marie, my lovely wife of 25 years next month, calls me from work and is clearly upset over something. Being the caring and considerate husband that I am, I immediately asked in a soft and comforting tone of voice, "Honey, what's wrong?" Ann Marie then begins to explain to me how her most favorite doctor of many years, Dr. Vinnie Boombots (the doctor's name was changed to protect the guilty), is no longer going to participate in our health insurance plan network, so therefore Ann Marie (and me, too, I guess) need to search for another doctor or we will be subject to paying "rack rates" (as I like to call them) for "medical services rendered". Once again, being the kind, loving, thoughtful (and obviously not too bright when it comes to thinking before I speak) husband that I am, I immediately responded to her with what I believed to be words of wisdom in an effort to console and something to the effect of, "So what? Go find another doctor."  
 
Well, once the yelling stopped from the other end of the phone, I came to the realization and understanding that obviously the patient/doctor relationship between a woman and a doctor that she feels comfortable with and has developed a trust in, is much more important than a man's (or at least my) feelings on the same matter. So now, trying to make amends, I "cautiously and sheepishly" suggested that she review the doctors on the list, call a friend of ours who is a nurse practitioner in a local hospital, and ask her what doctors she would recommend. Adhering to my suggestion, Ann Marie took the list to our nurse friend, wrote down her suggestions, crossed referenced this list with a list of doctors names she collected from other ladies in her office who are also on the same insurance plan, once again crossed referenced this new list to those doctors whose office is within a reasonable driving distance from our home, and "voila!"...a list of the perfect doctors to choose from! Although this seemed to me like a great deal of work just to find a doctor as I would probably just have called the doctor whose name begins with the letter "A" as they would be first on the list, it was now apparent to me that this was a woman on a mission and she was not going to quit until she accomplished what she set out to do.    

Well guess what? The first doctor she called, which was the most highly recommended doctor from all of her lists combined, speaking through a quite unapologetic receptionist, stated that they were not accepting any new patients and to "Have a nice Day". Although Ann Marie was slightly saddened that her first choice was eliminated, she was not to be discouraged and went on to number two doctor on the list, with the optimistic thinking that maybe being #2 they would try harder. Unfortunately for my darling spouse, this doctor also was not accepting any new patients. So, she pressed on•and soon learned that three times wasn't going to be a charm. Neither were numbers four, five, or even six.   
 
Being the intelligent, persistent, and determined (she's also Sicilian) woman that she is, Ann Marie refused to surrender as she pressed on and continued forward, or actually downward, on her inventory list of doctors that were a fit to her predetermined criteria, until she finally discovered a doctor that gladly accepted her, and our insurance, and granted her an appointment. "Finalmente!" ("Finally") as we say in Italian. "Ora possiamo mangiare!" ("Now we can eat!")    

So that night at the dinner table, Ann Marie is explaining to the kids and me about her quest to find a doctor, and of course the Type A personality that I am, immediately begins to associate her "sfortuna" ("misfortune") to something that must be related to insurance. I wasn't quite sure how yet, but I knew that "this thing of ours" somehow had a hand in it and if I searched long and hard enough I would ultimately be sure. So after diner I began to dig and investigate, calling people I know in the insurance business and medical field. I even called a few doctor's offices that had evening hours, and when the receptionist told me they weren't taking any new patients I asked "Why not?" which was something that Ann Marie was too polite to ask.    

Well, after all of my prying, probing, questioning, telephone calling, and even "Googling"; all the while thinking I was an investigator for the television show "Hardcopy" (I love the ones when they set up those homes in order to catch pedophiles), I arrived at the result that I was hoping for.    

Although some of the answers that I received from receptionists were how "...they had a full book of patients" and they "...could not accommodate any additional patients", I somehow found that to be somewhat difficult to believe that in this economy, with so many people unemployed, or uninsured, is it possible that this many doctors are completely sold out? Don't they lose any through "attrition"? "Some of their patients must relocate out of town, or change doctors, or even die", I thought to myself. However, after some additional investigating, sure enough guess what was ultimately behind it? Give up? Insurance premiums. Malpractice insurance premiums, to be precise.   
 
According to a report from The United States General Accounting Office, there are multiple reasons why malpractice insurance rates have increased so dramatically over the past few years. Of course, in these economic times, poor investment returns and higher reinsurance premiums largely contribute to the exorbitant premiums that those in the medical profession must pay in order to conduct business. In addition, state laws restrict medical malpractice insurers to conservative investments, primarily bonds, limiting their potential rate of return on investments. Furthermore, increasing losses and higher award amounts by juries and courts also play a huge part in determining rates paid by doctors. Although we all are well aware that the greater the exposure, the greater the risk of a potential loss, what other factors are calculated in by a carrier in order to correctly price a specific malpractice insurance risk? Location was a factor that causes rates to fluctuate dramatically. For instance, doctors in south Florida pay some of the highest malpractice insurance rates in the country. From 1999 to 2002, medical malpractice premiums increased in Florida 75%, while in Minnesota premiums increased only 2% during that same time period (which begs the question about the competency levels of south Florida doctors so remember to not get sick on your next visit to "SoBe". Just teasing, doc, I'm sure the courts are also much more generous in Florida than in other areas of the country...or are they?).   
 
State insurance department regulations also require medical malpractice carriers to calculate premiums based on expected investment income. In other words, carriers must lower their premium rates when the income they expect to earn on their investments is higher, and conversely they may raise premiums when expected results are lower on investments. Therefore, as in most cases of carriers operating at a higher loss ratio, it is possible for insurers to lose money on the underwriting portion of their business but still have a positive bottom line at the end of the day, depending upon the rate of return on their investments. In many instances losses from medical malpractice claims and their related expenses surpass premiums collected, although income from investments ensures the insurer with a profitable P&L. However, and this is rather interesting, malpractice insurers are not permitted to increase premiums to balance out for lower-thanexpected returns on past investments, but must take into consideration only potential income from future investments.    
So how does this associate to what Ann Marie (and I am sure many others) faced when trying to find a new doctor? Well, one other factor that I discovered in my quest to determine why it was so difficult to obtain a doctor was that some medical malpractice carriers exponentially increase rates based on "buckets" of patients. For instance, the rate may be 1 times "X" for 0 to 50 patients; 3 times "X" for 50 to 100 patients. However when the number reaches a certain level, the multiple for the rates is dramatically increased...a direct correlation to exposure equals risk; and therefore determining when a medical practice reaches a point of diminishing returns and the doctor ultimately says, "Finalmente!"  
 
With everything that has been going on in our business lately, I had not had a chance to mention a couple of events that took place, and deserve recognition. First, The New York Young Insurance Professionals climbed Hunter Mountain to participate in an annual NY-YIP event. So many agents, carrier folks, and their families enjoyed this year's festivities which included continuing education, networking events, and so much more. Thank you to Dan Maher and Eugene Nunziata of Excess Line Association of New York for dedicating their time and efforts in conducting this year's continuing education class titled: Rapidly Evolving Changes to the E&S Marketplace in 2009. Also, a special "Thank you" to my dear friend Harvey Leff of Brooks Insurance Group in Manalapan, NJ, along with the entire Committee, for putting together such a successful event and raising record-breaking sponsorships.
   
Another wonderful event that was extremely well attended was the 43rd annual Westchester E-Day, held at the Tarrytown, NY Marriott. Honored there was JoAnne Murray, CIC of The Allan M. Block Agency, Inc. as this year's Frederick H. Dayton Award winner. Top Partner Awards were presented to Travelers Insurance Company for Personal and Commercial Lines; Adirondack Insurance Company for Regional Personal Lines; and Harleysville Insurance Company for Regional Commercial Lines. Congratulations to all of our winners! It was great to see so many fantastic people that I have known for so many years and congratulations to Mary Cincotta of DeForest Group, I hope you liked the tea basket that you won! A special "Thank you" to Margaret Black and Roseann Rizzo for a great job in organizing this event...and as always we're all looking forward to next year!    

Speaking of congratulations, the very best wishes to my friend Darryl Terranova of Terranova Insurance Services, in Orchard Park, NY, who was recently married! We wish you and your bride a wonderful, happy, healthy, and long life together! Oh, and Darryl, the other day when I was giving you some "marital advice", add to it what I said at the beginning of this column about "think before you speak". Believe me, it's good a piece of advice you will always remember! You think I would have learned after being married a couple of months shy of 25 years!   
 
One more "thing": Fiserv FSC Insurance Solutions Inc. has recently changed its name to "StoneRiver-FSC". "The name StoneRiver was selected because it symbolizes strength and transformation," said Mark Damico, President and CEO of StoneRiver. "We are a company with strong values, integrity, and thought leadership with a track-record of commitment to long-term successful partnerships and to industry-leading innovation. This is an exciting time for our employees, business partners and our loyal customers. We thank them for supporting the new company and together we look forward to a bright future at StoneRiver." Congratulations StoneRiver-FSC. For more information, you may visit www.stoneriver.com .   
 
Well, that's all for now folks, and thanks for taking another walk around the neighborhood with me! We'll see each other soon, I'm sure!