MSDC Testifies in Support of NCRIC/ProAssurance Merger

Proposed Merger is "Good Medicine"

WASHINGTON DC--At a hearing today before the Department of Insurance, Securities and Banking (DISB) on the merger of NCRIC and ProAssurance, K. Edward Shanbacker, execuritve vice president of the Medical Society of the District of Columbia, urged DISB to approve the proposed merger--that it is "good medicine."

Following is the Medical Society's testimony:

Good morning and thank you Commissioner Mirel for providing the Medical Society the opportunity to be a part of today's proceedings.  The outcome of this hearing is critical to the anticipated merger of NCRIC and ProAssurance and is being watched by every NCRIC insured physician in the city.  We are facing a medical meltdown in this city as a result of runaway jury verdicts in medical liability cases - a fact recognized by Mayor Anthony Williams when he introduced the Health Care Reform Act of 2005.  All of us have a role to play in ensuring that the District of Columbia remains a safe and viable home for the thousands of physicians who treat patients in all eight wards.  If we fail to assume our respective responsibilities, we will only see the continued exodus of physicians and patients to suburban areas.

Coming here today is a bittersweet moment for me and the Medical Society.  As you may know, The Medical Society was instrumental in the founding of NCRIC some twenty five years ago, and for most of its life, we played the critical role of attorney-in-fact during NCRIC's days as a reciprocal insurance company.  But times change…we realize that.  Several years ago, it became apparent that NCRIC needed access to capital and to expand its reach if it were to continue to thrive - to do that, a series of steps were put in place eventually leading to the establishment of NCRIC as a publicly held company.  It expanded its markets and continued to thrive - all the while with strong Medical Society support and participation.  While rates continued to escalate threatening physician practices in the District, we believed and continue to believe, that it is a result of the fact the District of Columbia remains one of two jurisdictions in the Country with absolutely no tort reform of any kind.

NCRIC has done an admirable job for a quarter of century notwithstanding the fact that there exists an aggressive trial bar that exploits local juries to make awards based on emotion and not law or reason.  Over the past 25 years, NCRIC has been here when others have come and gone.  In fact, NCRIC was born when no company was willing to write medical liability insurance in the District at any cost.

So today we come to another chapter in the evolution of NCRIC.  While the physician community would have hoped for a different turn of events - one where NCRIC was able to grow and expand and become of a size sufficient to compete in today's marketplace, we understand that is not to be.  Change is not easy, and the anxiety in the physician community about being able to obtain medical liability insurance in this market is palpable.  Physicians have trusted in NCRIC for good reason, and now we need to place that trust in somewhat different hands.

The Medical Society's leadership has met with NCRIC and ProAssurance since February when word of the pending merger was first announced.  I am pleased to tell you today that we believe this merger is in the best interests of physicians and patients.  We believe the philosophy of ProAssurance is compatible with what physicians have come to expect from NCRIC over the years.  We have been told that with ProAssurance's entry into this market, that physicians will see business as usual with the added benefit of ProAssurance's lower administrative costs.  We're told that management of claims and underwriting will not change, and that all contract terms will remain in force.  To the extent your order can codify these representations, so much the better, although we recognize that the environment is dynamic and so too must certain aspects of the company be as well.

And if the merger is not approved…what then?  Will NCRIC continue to be able to go it alone?  It's really not a risk worth taking, for if we lose the gamble, then we're right back where we were in the late 70's with no medical liability insurance availability.  If any broader good can come out of this, it must be that this is but one more wake up call to address the fundamental problems in the medical liability system in the Nation's Capital. Mayor Williams has shown courage and leadership in both understanding the problems and the ramifications for patients.  It's past time for others to as well.

So in concluding, The Medical Society urges your approval of the proposed merger - it's good medicine.  Thank you.