The Minnesota Legislature created a medical malpractice Joint Underwriting Association in 1976 as a temporary solution for hospitals to get insurance in a tight market.
Today, malpractice insurance is easy to obtain and carries some of the lowest rates in the country, thanks to the state's relatively small number of malpractice suits, low settlement amounts and reputation for having good physicians, said Mike Matray, editor of the Medical Liability Monitor, which tracks insurance rates.
Unlike other states, where the malpractice litigation is more common, "no one pays attention to Minnesota because the rates are so affordable," Matray said.
Joint underwriting associations are typically set up by states that have an availability or pricing problems with malpractice coverage, said Eric Nordman, the regulatory services director for the National Association of Insurance Commissioners.
When the market opens up and insurers compete for physicians, Nordman said the joint underwriting associations end up covering "the worst of the worst." "One solution is to take them out of practice," he said. "Which may be the right answer, but you get a lot of political pressure. The AMA and local physician associations may be hesitant to take away income from one of their brethren."
The executive director of the Minnesota Medical Association, Dr. Robert Meiches, said he didn't know whether there was a need for the MJUA now, but in the past, it filled a gap for some specialty doctors who couldn't get coverage in the state. The largest malpractice insurer in the state, Minneapolis-based MMIC, rejects "considerably less than 5 percent" of applicants, said Jeff Pearson, the company's vice president of underwriting. Those rejections are typically based on past claims and disciplinary action, Pearson said.
"This is an indication of something that would be problematic in the future," he said. "It could be an indication of something systematically problematic in a practice."