Though capping "pain-and-suffering" liability may only partly solve rising malpractice insurance rates, it would be a giant step in the right direction, says the president of a company that insures Wyoming doctors.

"You have a situation in Wyoming where the state is asking doctors to be infinitely, personally liable for health-care outcomes, with no limit whatsoever," said Dr. Richard Anderson, president and CEO of The Doctors Company of Napa, Calif.

He said the proposed cap of $250,000 on noneconomic damages - with no exceptions - is by far the most important reform, but a comprehensive package of reforms works best.

The Doctors Company will be one of only two medical malpractice insurers left in Wyoming when the Ohio Health Insurance Co. (OHIC) withdraws from the state later this year.

At present, The Doctors Company insures about 300 Wyoming doctors, but when OHIC leaves the state, Anderson's firm will insure 500 to 600 of the state's approximately 800 doctors. The others will be insured through UMIA, a Utah insurer.

"The reason that other companies are leaving the state and that no else wants to come into the state is that insurance companies have lost a good deal of money in Wyoming, not over a year or two, but over a decade or two," Anderson said. "The medical malpractice environment in Wyoming is not conducive to companies even breaking even, let alone making a profit."

Anderson says The Doctors Company paid out $1.12 in claims for every premium dollar it received in Wyoming from 1992 to 2002. He attributed the lack of profitability to Wyoming's small pool of doctors and a number of high settlements reached on malpractice claims.

"We're committed to staying as long as we believe that we can charge a rate that is adequate to cover the exposure," said Anderson.

Anderson concedes that doctors who do get sued win eight out of 10 lawsuits. But the lawsuits they lose are costly, because there is no limit on what the plaintiff can be awarded.

Contrary to The Doctors Company viewpoint, OHIC spokesmen told legislators last year that damage caps would not encourage their company to lower rates. They said their decision to cease operations in the state was unrelated to the medical malpractice insurance and tort reform issue.

If Wyoming hopes to draw more companies and acquire better rates, Anderson says it must enact tort legislation similar to California's reforms. These include a $250,000 cap on noneconomic damages in medical malpractice lawsuits, limits on the contingency fees lawyers can charge, and provisions that prevent double recoveries for medical bills.