If you ever find yourself envying the status and income of your medical counterparts, seeing what they're going through with their malpractice insurance should banish the feeling instantly.

Take the case of doctors at the University Medical Center Trauma Unit in Las Vegas., featured in an ABC news report in March. They got hit so hard last year with premium increases that two surgeons, who saw their premiums go from $40,000 to $200,000, got out of the profession altogether.

Others have been slapped with increases of anywhere from 30% to 100% or more. That is, if they can even get insurance.

A USA Today article told of a six-member OB-GYN practice in North Carolina where the premiums more than doubled, going to $277,000 a year -- after their old policy was canceled.

So far, chiropractors haven't had to worry about five- to six-digit premiums, but they have witnessed premiums shoot up substantially and may be facing additional increases.

While doctors often aim their anger at their malpractice insurance provider, most experts say the insurers are hurting as much, if not more than the insurees.

The "medical malpractice crisis," as it's been dubbed by some segments of the insurance industry, has become so severe that several companies have collapsed or -- as preventive medicine -- left the malpractice insurance market.

In December, 2001, St. Paul Companies, the second largest underwriter of malpractice insurance, announced that it was exiting the medical malpractice business. On February 1, 2002, the Commonwealth Court of Pennsylvania ordered PHICO Insurance Company, which covered hundreds of doctors and hospitals, into liquidation.

Other insurance companies are merging with, or being bought up by larger companies as the industry goes through this shake down. Both Princeton Insurance Co., and HUM for example, were acquired by Medical Liability Mutual Insurance Co., a doctor- and hospital-owned medical malpractice carrier.

"The message is that med-mal liability cannot be priced profitably on a national basis," stated Alice Schroeder, an equity analyst with Morgan Stanley, in an A.M. Best report on April 1.

That isn't a totally accurate message, some say.

"It's possible to set premiums at a level that will be affordable to doctors, and create a stable financial situation for the insurance company as well," argues Timothy Feuling, vice-president of Chiropractic Benefit Services (CBS), which serves only doctors of chiropractic in the U.S. "The problem is when programs offer unrealistically low premiums or when doctors make price their only criteria when choosing their carrier."

Mark Crane in a Medical Economics article agreed. "The insurance companies themselves share culpability because they kept premiums artificially low for years. They either miscalculated how much money they'd need to pay future claims, or engaged in low-ball price competition to win market share, or used investment income to offset losses in the courtroom."

When the Wall Street bull turned into a bear, those companies found themselves having to rely on premiums for their income -- premiums which had been set too low.

PHICO, for instance, had rates "that were probably lower than anybody else in the state," said John Loudon, vice president at Dulaney, Johnston & Priest, a commercial insurance brokerage in a Wichita Business Journal article. That strategy led to its downfall.

Taking in too little money, however, is only one half of the insurance crisis equation. The other half is paying out too much money for claims, lawsuits and legal defense. The increase in awards for malpractice cases has been staggering.

The Jury Verdict Research company of Horsham, Pa., provides the figures. In 1993, the average malpractice award was $1.95 million. By 1999, that figure had soared to $3.49 million (the median award was $800,000 in 1999, up from $750,000 the previous year). About 45% of all jury awards in 1998-99 were $1 million or more, compared with 39% in 1997-98.

Even cases that never get to court are costly.

Jury Verdict Research statistics show that it cost 30% more to settle a medical malpractice lawsuit in 1999 than it did in 1998. The median settlement in 1999 was $650,000.

This one-two punch of reduced income and increased outlay has insurance companies reeling and doctors scurrying to find coverage they can afford.

Where will it all end? No one knows for sure, although the crisis has given impetus to tort reform legislation and increased emphasis on risk management education. CBS, for instance, issues a free bi-weekly electronic newsletter that discusses ways to prevent malpractice lawsuits and minimize the chances for successful litigation.

"By teaching our insureds how to avoid lawsuits in the first place, we not only spare them the emotional and financial trauma of going to court, but are able to ensure our own financial stability," explains CBS' Feuling.

Feuling offers other advice to help doctors weather the malpractice crisis:

*** Don't bargain shop. Consider all factors, not just premiums. In many cases, insurance companies try to maintain artificially low premiums by offering less protection, more loopholes or gaps in the coverage, and even imposing deductibles.

In addition, insurance companies may choose to settle a case rather than fight it simply because it's less costly. To avoid this situation, pick a policy with a "consent to settle" clause, which gives you the power to make the decision whether to settle or not. One expert (writing in Medical Economics) warned, "... stable premiums are no bargain if rising legal costs mean you could end up with a weaker defense or be pushed into a settlement you don't want."

*** Don't pay for M.D.s' mistakes. Most malpractice lawsuits, particularly the ones with huge awards, are filed against medical doctors. Yet, when the insurance company is forced to increase premiums, it passes on the increase to all policy holders.

Doctors of chiropractic are hit just as hard as the medical doctors covered by the same company. The best way to circumvent this problem is to choose a malpractice program that covers chiropractors only. "There is no reason D.C.s should subsidize medical doctors or other practitioners," Feuling notes.

He adds that having a chiropractic-only company has another advantage for D.C.s. -- a greater understanding of the role of chiropractic in health care. Insurance carriers whose business is dominated by medical doctors and hospitals tend to view chiropractic either as borderline "quackery" or as a medical modality useful solely as a treatment for neuromusculoskeletal complaints in adults. They find it cheaper to settle cases against D.C.s than to stand up for chiropractors in court.

*** Bullet-proof your practice. Learn as much as possible about sound risk-management techniques. Be scrupulous when it comes to record keeping.

Read risk management articles such as the "CBS Malpractice Report" (www.cbsmalpractice.com/report) to learn about terms of acceptance, record keeping, sexual misconduct, and other topics specifically geared to minimizing risk.

In addition, download a free copy of the "Malpractice Prevention Program" (www.cbsmalpractice.com/prevention.htm) that includes risk management advice and office procedure forms.

"Crushing Cost of Insurance," by Dean Reynolds, ABC News, March 5, 2002.

"Malpractice insurance rates climb by double-digits as lawsuits rise," by Jerry Siebenmark, Wichita Business Journal, Sept. 28, 2001.

"Soaring Malpractice Premiums Stun Many Doctors," by Rita Rubin, USA Today, December 4, 2001.

"Why premiums are soaring again" by Mark Crane, Medical Economics, July 9, 2001.

"Quality of Defense," by Timothy Feuling, CBS Report, Nov. 28, 2001.

"Should you Settle?" by Timothy Feuling, CBS Report, July 25, 2001.

"Claims and Pricing Severity Maul Med-Mal Market," by A.M. Best, April 1, 2002.