The Worst Business in America

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.

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