The Worst Business in America

Suppose you couldn't raise prices, you couldn't control expenses, and you were morally obligated to meet the needs of customers who are eager to sue if anything goes wrong. Suppose you were a group of doctors trying to birth babies in the 21st century.
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In seven days their medical practice could be forced to shut down, and the sheer absurdity of the situation has put doctors Richard Levine and Michael Faust in a slightly silly mood. Seated in Faust's cramped office overlooking the hills of northwestern New Jersey, the two managing partners of Valley Center for Women's Health are still trying to sort out their feelings about an offer they just got on this sunny day in late July. A malpractice insurer has promised very attractive policies to their four partners in obstetrics-gynecology, but the insurer refuses to cover Faust and Levine, the two managing partners, at any price. Since their current insurer has already announced that it will not renew any policies written in New Jersey, Faust, 49, and Levine, 50, are only days away from being left "naked"--and legally barred from practicing medicine.

"So, we're going to start looking to open a pizzeria somewhere," jokes Levine, who has a sunny disposition to go with his toothy smile.

"I have some pretty decent typing skills," says Faust.

The two doctors are on intimate terms with life and death, with miracles and tragedies. They have been delivering babies for most of their adult lives, and thousands of those deliveries have been joyous events. But on rare occasions, Faust and Levine have brought newborns into the world who were distressed, deformed, dying, or dead. Some of those babies' parents have sued, and even though no jury has ever found Faust or Levine culpable in a malpractice case, they are marked men nonetheless, their livelihoods threatened by a suddenly cautious insurance market.

Earlier this year, when malpractice premiums were already eating up one of every seven dollars of the practice's gross receipts, Faust and Levine learned that, with their current insurer planning to leave the market, no established insurer was willing to write them a new policy. During a five-month stretch (in which the practice delivered more than 250 babies) Valley Center's six physicians had to face up to one grim possibility after another, including having to play risky games of "chicken" with the health care companies they rely on for patients and income, having to lend start-up capital to a fledgling insurer, and maybe even having to break up the partnership--all driven by a nationwide meltdown in the malpractice insurance market.

Doctors, particularly obstetricians, are in many ways well conditioned for the perils and uncertainties spawned by rapid change. Remaining calm amid adversity is the doctor's stock in trade. But for almost two decades, most of America's physicians have been treated like chum in a trillion-dollar health care ocean swarming with sharks. Every other player in the game--hospitals, government agencies, health care companies, and malpractice insurers--has put a squeeze on physician incomes. It's no coincidence that doctors, on the frontline of patient care, have the clearest ethical commitment to place healing above earning.

The practice of medicine has gotten so tricky and profit margins so slender (though doctors seldom speak, or think, in such terms) that the independent, self-assured instincts honed in the profession can actually land doctors in financial trouble. As one health care consultant likes to point out, physicians who fly their own planes tend to be more prone to crashes than other pilots because they are more apt to overrate their flying abilities. When you do godlike things on a day-to-day basis, the reasoning goes, why not take on a thunderstorm without radar?

For the doctors of Valley Center, the thunderstorm is here.

The news arrived at Michael Faust's house with the February 3 Bergen Record. Zurich North America, the only insurer that had even offered Faust and his partners a policy eight months earlier, would be pulling out of the New Jersey market. Valley Center would have until July 31 to find another insurer.

Coincidentally, that very morning marked day one of the first physicians' work stoppage in New Jersey history, a statewide protest by the medical profession against spiraling malpractice rates. A cold late-winter rain was falling that morning as Faust and his partners prepared to join 5,000 other medical professionals for a mass rally at the state capitol in Trenton.

The doctors found that no established insurer would write them a policy--at any price.

At the rally that day, doctors cried out for a bill that would impose caps on jury awards in malpractice cases, waving lawyer-bashing protest signs ("Need a doctor? Dial 1-800-LAWYER") and leading spirited chants of "Cut the crap! Pass the cap!" Faust, all six-foot-six of him in a damp white clinical coat, stood by quietly. He is a soft-spoken man who brims with midwestern civility, and he felt self-conscious, as a physician, protesting in the street. Near him, sticking out in the white-coated throng, was a group of sympathetic Teamsters, all in their distinctive union local jackets, joining in the chanting, cheering, and especially the jeering. Teamsters, unlike doctors, have a proud history of sticking up for themselves. And Faust had another thought: "Maybe we need to get some of those jackets."

At the end of that day, however, neither new laws nor a more militant political posture could guarantee Valley Center's six ob-gyns the insurance they need to stay in business. New Jersey is one of 19 states that the American Medical Association cites as "in crisis." These are states in which jury awards and insurance costs are climbing, and doctors are either leaving their practices or their states. Reasons why premiums have skyrocketed are numerous and complicated--the stock market decline and a lack of capacity in the reinsurance market brought on by the September 11 terror attacks being just two. Some say insurers had underpriced their policies to build market share and then, in 2002, raised rates in hopes of recouping their losses. But doctors and insurance companies blame multimillion-dollar jury verdicts, and nine states, along with Congress, have responded with proposed legal caps on damage claims.

Weeks after the demonstration, at one of their regular Thursday-morning partner meetings, Faust and Levine report that their chances of finding an affordable new insurer for fiscal year 2004 aren't good. The malpractice segment of the industry appears to be abandoning New Jersey. One insurer, nearing bankruptcy, has stopped writing new policies. Another, Princeton Insurance, is rumored to be taking only those obstetricians who have never been sued--and only one Valley Center ob-gyn, Monica Meyer, at 38 the youngest one, can make such a claim.

A new company, calling itself NJ Pure, had seemed a hopeful prospect at first, because it is a so-called "bedpan mutual" insurance company, meaning it was formed by doctors for doctors. But NJ Pure told Valley Center's agent that it already has enough obstetricians. Like neurologists, obstetricians get sued a lot more than do other specialists, and at $2.05 million per case (according to a trade group), the median obstetrics malpractice award runs higher than that of any other specialty. NJ Pure is seeking more "low-risk" physicians, internists for instance, to balance its portfolio.

The final prospect is Conventus, another bedpan mutual start-up that has already made Valley Center an offer. The annual policy price of about $100,000 per ob-gyn would match Zurich's current rate, but the offer comes with a condition that Levine is reluctant to swallow: Conventus requires its policyholders to put up an additional one-year's worth of premiums--about $600,000 in Valley Center's case--to capitalize the start-up.

Though there's a potential upside to the investment, the Valley Center doctors have learned to expect the worst. "We'll never see that money again," Levine says with dismay. "It feels like extortion." They decide to have their insurance agent keep looking.

The six ob-gyns at Valley Center share two office sites, one near Ridgewood, N.J., not far from Manhattan in the moneyed Bergen County suburbs, and the other in Ramsey, just 17 miles away, at the fast-growing western edge of northern New Jersey's suburban sprawl. It is an ideal spot for a growing business, and they've done a lot of things right, hiring salaried internists, psychologists, even massage therapists to increase cash flow. The very name, Valley Center for Women's Health, is an attempt to rebrand the practice as something more than a traditional ob-gyn office.

At $4.7 million last year, revenue at Valley Center has never been higher, but that's mainly because each partner's workload has never been heavier. Meanwhile, their individual incomes drawn from the practice have been flat at about $200,000 each over the past three years--largely due to escalating malpractice insurance rates. Zurich, which had wooed them with low rates in 2001, nearly doubled the tab the following year, raising premiums for the practice from $370,000 to $710,000. The $340,000 difference came right off the bottom line. Having held longer office hours and seen more patients per hour, the partners might have been able to give themselves a raise, but the rate hike consumed all of the prospective profits--almost $60,000 per partner.

Meanwhile, the doctors' earnings per hour worked actually dropped last year, which sent the partners on an internal hunt for pennies to pinch. They closed the smallest of their three offices, laying off two employees who had been with Levine for 15 years. They stopped taking credit card payments at the front desk to save on service charges and fees. At the urging of one partner, Dr. Roger Coven, they canceled their spring-water deliveries. "Some of the medical assistants still haven't forgiven Roger for that," says Levine.

At one point last year, Levine briefly considered the drastic move of leaving obstetrics, hoping to save the practice $40,000 or more in insurance costs by taking only gynecology appointments. "I didn't think that at this point in my life that that's what I'd want to do," he says. "I still get a rush when I deliver a baby. But it's starting to creep into my mind: Is it worth working from January to July just to pay my malpractice insurance?" Ultimately, he concluded that dropping deliveries and prenatal exams would shift too much of his workload onto the other partners.

Similar scenes are playing out in doctor's offices across the country, with soaring rates and stiffened underwriting standards throwing balance sheets so far out of whack that many medical partnerships have split up, relocated, shut down, or sold out to nearby hospitals. A Johns Hopkins study shows that over the past decade, the percentage of doctors who are self-employed has dropped from 85% to barely 55%--and that was before the current crisis. Once emblematic of self-reliant, small-town America, the M.D. shingle is in danger of going the way of the buggy whip. For some specialties, obstetrics in particular, medicine may be among the worst small-business sectors in America.

Levine's father-in-law is a businessman who has a hard time understanding many of Valley Center's problems. "He wants to know why we can't just pass our insurance costs along to the patients," Levine says. "I try to explain we have no control over what the health care companies pay us." A minority of established physicians in specialties that serve an older, well-heeled clientele (urology and gerontology for instance) may set fees as they see fit, as do dermatologists in the lucrative cosmetic-surgery field. But the client base for obstetrics is younger and far more likely to be dependent on workplace medical coverage from companies such as Blue Cross and any number of HMOs that "reimburse" doctors for their treatments on a discounted pay schedule in exchange for supplying them with patients. "We're one of the highest-risk specialties in terms of getting sued," Levine points out, "but we get reimbursed by health care insurers as if we're in a low-risk field."

Faust says he remembers billing $5,000 per delivery 15 years ago, back when health care insurers would routinely cover the entire tab. Today, Valley Center nominally charges $4,000 per pregnancy, including prenatal care and the delivery itself, but if a patient has Blue Cross coverage, Valley Center agrees to accept only $2,100. Those reimbursement rates help explain why Valley Center's doctors need to see more and more patients just to maintain their incomes. And that's if they get reimbursed. Health care companies are notoriously slow with payments. Several, including Cigna and Horizon, have been fined by state regulators for deliberately delaying or skipping reimbursements owed to doctors.

Faust remembers billing $5,000 for a delivery 15 years ago. Now, he accepts $2,100.

There are framed displays in the waiting rooms at Valley Center, the likes of which you don't often see in the offices of other medical specialists--pictures of happy patients. In one snapshot after another, women with mile-wide smiles are propped up in hospital beds, looking flushed and exhausted, posing with their newborn infants and with one or another of Valley Center's partners. But along with the rewards, the burdens of obstetrics are also unique within the medical profession. Valley Center averages almost two deliveries per day, so one partner is always required to be on call, ready to run off to the Valley Hospital in Ridgewood to attend to a woman in labor. A second Valley Center doctor needs to be on call at all times too, as a backup should a pregnancy require some emergency surgical procedure. It's a difficult lifestyle in which burnout is common--and doctors-in-training have noticed. One study puts obstetrics at the bottom of specialty preferences among medical school residents.

The need to get to the hospital fast even puts constraints on where Valley Center's partners can buy a home--none of them live more than 15 minutes from Valley Hospital. "We looked at a place near Tuxedo, N.Y., 10 acres on a 200-acre lake," Levine says. "It was spectacular, but it's a 45-minute drive to the hospital. I said to my wife, I can't do this. I can't get a call at 2 in the morning and be 45 minutes away." "Dermatologists live there," says Faust.

It is an overcast Thursday morning in April, and the Valley Center partners are reviewing financial printouts with Karl Johnson from their billing service. Revenue has remained strong since October 2002, their all-time record month. Faust ponders their insurance predicament and mutters, "We've never been healthier, and now we may go out of business."

Years ago, when Valley Center was formed in a merger between the two smaller practices of Faust and Levine, the doctors got rid of their in-house billing department and farmed out the function to Johnson's firm, Millennium Practice Management Associates. Since then, Johnson has also done a good bit of handholding for Valley Center's doctors. "Karl," says Levine, "was the bad guy who told us that most of what we're going to do to preserve our income is work harder." At Johnson's prompting, the doctors now schedule six patients per hour instead of five, and may plan for as many as 25 hours per week dedicated to their "hours"--the actual time they set aside to see patients, distinct from time in the office spent making calls, doing paperwork, or working on call at the hospital.

The partners usually meet on Thursday mornings around a wood veneer table in a small, windowless conference room with bare walls except for the pale butterscotch wallpaper pattern. Though the meetings are scheduled for 8 a.m., there are rarely more than three or four partners present before 9, and all six are almost never in the same room, since at least one is on call at the hospital at any given hour of the day. The meetings themselves tend to be free form, agendaless, and sometimes chaotic. The room can suddenly fill with terse and emotionally charged crosstalk, sounding much like a hospital emergency room.

Johnson is a big man with a gentle demeanor. As he reviews the accounts receivable, he notes the number of unpaid bills for $10. When patients show up without any cash--as they do all too frequently--their copays or visitation fees can go uncollected for months. The front-desk receptionists have now been told not to let anyone see a doctor without paying first--no exceptions--but there are all these uncollected copays still outstanding. Johnson suggests Valley Center consider writing them off, especially if chasing such small sums might alienate a few good patients.

Faust is in a dour mood today. "They're good patients," he huffs. "And they won't pay us $10."

After Johnson packs up and leaves, it turns out Levine has been saving some rare good news: One of their member HMOs may be willing to boost its per-pregnancy payments. Back in February, Levine had heard through Bergen County's obstetrics grapevine that some obstetrical practices had stopped taking patients covered by the HMO (confidentiality agreements prevent Levine from disclosing the name) because its reimbursements were among the lowest in the area. Seeing an opening--hoping the HMO was running low on obstetricians with privileges at Valley Hospital--Levine wrote the HMO a letter, explaining that increased malpractice exposure had caused the practice to re-evaluate its relationship with some of its payers. He indicated that Valley Center would consider quitting without a raise.

Now, after one face-to-face meeting (the first time HMO representatives have ever deigned to sit down with the doctors) the company has come back with an offer--$3,200 per delivery--a $1,000 raise that would give a $50,000 lift to Valley Center's bottom line. The only catch, Levine explains, is that the HMO wants Valley Center to commit to that rate for two years.

The impact around the table is seismic--never before has Valley Center squeezed a raise from a health care insurer. For years the doctors had been helpless victims of a downward drift in reimbursement rates. Now, amid some animated crosstalk, the doctors note with gallows humor that this increase is so large that, as Faust points out, "It's almost what we were making 10 years ago!"

"Can I just be a pain in the neck?" asks Dr. Michele Rooney. She is the contrarian among the partners, a reliable source of uncomfortable questions. "This is a two-year commitment, while other [practices] are dropping out." Why tie themselves to a company, she wonders, that no one else wants to do business with?

"It's a found $50,000," shoots back Roger Coven, the pragmatist who deep-sixed the water coolers. "The others dropped out because they didn't negotiate with them. We negotiated."

By some estimates, one of four Bergen County ob-gyn practices have either quit doing deliveries or closed since the malpractice crisis hit two years ago. Though it's not a popular notion among doctors, there are indications that the crisis is shaking out weaker practices that had been glutting the region with obstetricians and keeping reimbursements low. Assuming Valley Center can find affordable insurance and survive, the crisis may end up lending them new bargaining leverage with their payers.

"We're just lucky we weren't one of the first out the door," says Rooney. "Or they wouldn't have sat down with us."

Levine agrees, and notes that the HMO still pays them poorly for most other medical procedures. "We're still getting killed on hysterectomies," he notes. "They're bad, but they're not terrible."

"Did you hear what you just said?" Rooney demands. "Where else in this practice would we accept that kind of thinking?" Rooney is right, of course, but the room falls silent. No one seriously proposes rejecting the HMO's offer.

Though he has little to report, Levine also broaches the subject of their malpractice situation. There's a rumor, says office manager Diane Roberts, that GE MedPro is under pressure from the state insurance commissioner to take more high-risk specialists.

"Can anyone at the insurance company tell us what is wrong with this practice?" Levine cries out in frustration. "Can't they say, well, there's one person, if he'd stop doing OB, we'd insure you." No, Roberts assures him, the whole group's profile is under consideration. She is a meticulous maternal figure in the office, a woman who has worked for Levine for 11 years and still addresses him as Dr. Levine. "They'll take all or none," she says.

With just more than 90 days to go, no insurer other than Conventus--the carrier that wants the doctors to kick in start-up capital--has made an offer. While other insurance companies won't even take doctors' phone calls, a Conventus representative is willing to come and sit down with Valley Center's partners. And yet, the Conventus policy is particularly distasteful to Monica Meyer, the youngest Valley Center partner and the only one who has never been sued. Conventus demands a five-year commitment from the doctors, and any doctor who tries to leave sooner will be hit with a fee called a "tail," ranging from $190,000 to $300,000. The tail covers any future insurance claims that may crop up in the years to follow (the statute of limitations on obstetrical procedures is 21 years--another reason obstetric rates are so high). The other doctors consider it an academic question, since all are confident they'll be delivering babies in five years. But Meyer, who is expecting her fourth child in November, can envision wanting to leave obstetrics in a few years. To her, the exit fee demanded by Conventus is too high to stomach.

At 38, Monica Meyer is the practice's youngest partner-- and the only one who has never been sued.

In addition, Meyer has discovered that because she's never been sued she can get her own policy from Princeton Insurance, a company that won't touch her colleagues. But like most insurers, Conventus prefers to cover an entire practice and might be reluctant to lose the practice's one doctor who has never been sued. Meyer is a small, intense woman and as she explains her worries about Conventus, there are tears in her eyes. She concludes that if Conventus insists on insuring all the doctors in the practice, she would have to leave the partnership--either sever her ties with Valley Center entirely or become an independent contractor. For her, she says, "Conventus is not an option."

A number of New Jersey medical practices have fractured under such strains. With the stakes so high, it's inevitable that medical concerns overlap with legal concerns. Earlier this year, the Valley Center doctors had to deal with a request from a high-strung expectant mother who had been bedridden in Valley Hospital for a month to prevent premature birth. The woman wanted to go home for a few days during Passover and some of the Valley Center doctors considered letting her go, provided she signed a release acknowledging the risks. But the woman was Meyer's patient, and Meyer prefers to treat difficult patients as if they are legal time bombs. "Some patients, you have to put the fear of God into them," Meyer told her colleagues at one Thursday-morning meeting. Let her go home, Meyer warned, and "if she has a bad baby, God forbid, she's the kind that will sue."

The woman spent Passover in the hospital.

By May, with less than 75 days left on their old policy, Faust and Levine have grown convinced that there is no white knight on the horizon, and that it could be risky not to lock in with Conventus. The company's demand for start-up capital may seem extortionate--but at least it will keep the practice open.

During a meeting the previous week with Conventus CEO Richard Augustyn, Faust and Levine had learned that Conventus was willing to go along with Meyer's desire to be insured separately by another carrier. Augustyn also seemed amenable to spreading Valley Center's $600,000 capitalization payments over five years rather than three. And, it turned out, there was a wrinkle that none of the doctors had understood--the $600,000 in funds would be at risk should the insurance company ever fail, but if Valley Center later chose to switch carriers, the money would not be lost, as the doctors had long assumed. Under New Jersey law, it would return to the practice. Roger Coven is at Valley Hospital, listening in on a speakerphone when this is explained. "Oh," comes his disembodied voice. "That's huge. That's so big I can't believe it."

Levine shrugs in agreement: "I was ready to tell them to take the company and shove it. We were offered this horrible deal, and now the deal is less horrible."

But Faust and Levine both point out that nothing is in writing, and there are risks in waiting. Conventus has a formula for its client base that allows room for only so many obstetricians and similarly high-risk specialists. Other obstetrics practices may want to sign up with Conventus, and if it fills those slots, Valley Center could be left uninsured. "He can't guarantee us a spot," says Faust, of Augustyn. "It's sort of used-car-dealer sales pressure."

Levine proposes that once they receive their official rejection by GE MedPro, as they suspect they will, they sign on with Conventus. "Are we all in agreement?" he asks.

"We don't have a choice," says Rooney.

"I know we don't," says Levine, again with that toothy grin. "But I thought we'd feel better if we took a vote."

To Mike Faust, a self-described optimist, there's one upside. "At least it's not like the other years," he notes brightly, "when it went down to the last days to see who would insure us."

He is speaking, it turns out, too soon.

One day in early July, everything changes. Levine takes a call from Conventus and discovers some new twists in their offer. Previously, the doctors had turned down an option to buy corporate malpractice insurance from Conventus, deeming it redundant. Now Conventus wants to require it at an additional cost of $15,000 per year plus another $60,000 in capitalization. Meanwhile, the total capitalization, now $560,000, can't be spread over four years as promised--Conventus wants the payments in just two years.

Furious, Levine tells Conventus to take a hike. The move is part pique, part strategy. Just that week, Levine had been intrigued to hear how a colleague had managed to pry an offer from another insurer after two prior rejections. The third application included a letter from the state insurance commissioner's office urging the insurer to reconsider. The same insurer, known as MIIX Advantage, has already rejected Valley Center, but now Levine is thinking of trying again.

Levine calls the firm's insurance broker, and asks her to resubmit Valley Center's application to MIIX Advantage. And within five days, MIIX responds with an offer. Though the MIIX premiums are somewhat higher, the capitalization costs are half what Conventus wants. But there's a catch: MIIX has extended the offer to only four of the Valley Center doctors. Levine and Faust, arguably the practice's most accomplished doctors, aren't included. This is when Levine starts talking about the pizza business.

Later that day, a MIIX underwriter tells Levine on the phone that he's a bad risk because he's been named in eight lawsuits over the past 20 years: "You don't fit the model." But of those eight suits, Levine's name was dropped from six during the discovery phase. His only insurance payout over those 20 years was a small settlement, just $60,000, to a patient who had a rough postsurgical recovery. "There are plenty of examples of people worse than me out there who got coverage," Levine complains. "I don't want to call [the commissioner] and say 'Hey, how come they took George and not me?' because the next thing you know, George is out." Levine doesn't even have to look outside Valley Center for such an example. Michele Rooney has at least two settlements that were larger than Levine's single payout, and she's also currently a defendant in one of the suits from which Levine has been dropped. "If you go by the numbers, it doesn't make sense!" says Rooney through gritted teeth. "They shouldn't have taken me!"

In Faust's case, he's been sued less frequently, but MIIX sees one large black mark on his record. Fourteen years ago he delivered a severely disabled hydrocephalic baby. The mother sued for not being warned about the defect in the course of prenatal testing, and Faust was persuaded by his insurer at the time to settle--for $2 million. A suit of this kind, considered a case of "wrongful birth," assumes that the obstetrician's negligence denied the parents the option of aborting a defective fetus. What still galls Faust was that the mother in this instance had declined an amniocentesis test, asserting that the test was useless since her religion forbade abortion. Though the test would not have revealed the fetus's hydrocephalic disorder, Faust is sure that once the mother's view of abortion had been exposed, a jury would have found her claim of "wrongful birth" to be a sham. "It was stupid to settle," says Faust. "But at the time you're so happy someone says, Sign here and you're done. You don't know that down the road somewhere, some underwriter is going to say, Here's a $2 million payout. You know, he must be dangerous to patients."

Eight days before their insurance expires, the doctors gather at their Thursday-morning meeting to sort things out. MIIX would probably insure Faust and Levine as gynecologists only, but Levine says flatly, "I don't want to give up OB."

"And I won't let you, not like this," says Kathlyn Kim angrily. "Not this way, under the gun with one week to go." Other concerns about such a plan go unspoken. The grueling on-call schedule at the hospital would have to be split four ways instead of six, for instance. And Faust and Levine could have trouble filling their schedules in gynecology. Most of Valley Center's new clients request one of the three female doctors--reflecting a national trend that prompted one trade magazine to put a woolly mammoth on its cover and suggest that male gynecologists face a similar fate.

Diane Roberts chimes in that while Conventus remains an option, "they're getting upset with us. The deposit was due yesterday."

"They don't know how desperate we are," says Levine.

"Oh, no?" says Rooney, adding sarcastically, "It's only July 24!"

Levine brings up the colleague who got in with MIIX on the third try, but admits that the state regulators were pessimistic. "I told the insurance commissioner's people the name of my underwriter," Levine says. "They said, 'Uh-oh, you got Darth Vader."

"Did you tell them this office will close next Friday?" asks Kim.

No matter which insurer the doctors pick, if all the paperwork isn't in order when their current policy expires at midnight on Thursday, the doctors will be unable to practice until the following week. Appointments would be canceled, and they would have to find colleagues to do deliveries for them over the weekend. Nonetheless, no one is ready to surrender to Conventus. They decide to wait and see if Levine and Faust can summon the muscle of the state regulators and get their MIIX application approved.

But by the following Tuesday, with just 72 hours of insurance left, Levine gets his second rejection from MIIX. Later that evening, all six partners convene--an extreme rarity--in a conference room. A week before, the four younger partners had toyed with the notion of accepting the MIIX offer and letting Levine and Faust take vacations for the first few weeks of August while their broker tried to find them coverage. But now, at crunch time, they face up to the nightmare of four people doing the work of six, shouldering an every-fourth-night-on-call schedule for what may be months, and then losing Meyer to maternity leave.

Within 15 minutes, they agree life will be hell for the foreseeable future if they don't settle for the Conventus policy--with Meyer taking her coverage from MIIX and the other five partners compelled to pony up $500,000 in capital payments over two years. There is an emotional moment when the six acknowledge the importance of keeping together, all doing obstetrics and not allowing the insurance companies to decide for them. But as they break up in the parking lot minutes later, a few wan suggestions of going out for drinks are met with an exhausted indifference. No one has the energy to celebrate the end of the annual malpractice insurance drama.

As the Valley Center doctors enter the new fiscal year, one in which another 700 infants will draw first breaths in their care, the doctors will try once again to focus on the practice of medicine.

This is Noel Weyrich's first article for Inc.

Last updated: Dec 1, 2003




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