Rural hospitals in Wyoming, Idaho and Montana create insurance company

CHEYENNE – Four small hospitals in Wyoming have formed their own insurance group with facilities in Idaho and Montana as part of a growing movement to fight rising malpractice costs.

Associated Press

Formed in October, the Yellowstone Insurance Exchange hopes to keep its risks and premiums low by targeting small, rural hospitals.

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West Park Hospital in Cody, Wyoming Behavioral Institute in Casper, Hot Springs County Memorial Hospital in Thermopolis and Star Valley Medical Center in Afton have all joined.

The venture could include up to 30 hospitals by the end of 2004.

Participating hospitals can have no more than 80 to 90 beds. Each had to submit 10 years of insurance claims history and make initial capital contributions to get the company started.

The hospitals also own the company, which they say gives them more input and assurance in a time when insurance providers, such as Farmers Insurance, are dropping malpractice coverage.

"The big draw is we’re assuming control of our own destiny. … Every hospital CEO is concerned about increases in premiums and carriers pulling out from the market," West Park Hospital CEO Doug McMillan said.

Wyoming hospitals have been trying to form such a group since the 1980s, but could never get enough facilities to participate.

By including hospitals in Idaho and Montana, consultants said the company could create a large enough risk pool to keep costs down. Hospitals in North Dakota may participate in the future, too.

The company, however, must still pay insurance claims – high or low – and is not covered by the Wyoming Insurance Guarantee Association.

"There’s no safety net if the insurance company goes bankrupt," Wyoming Department of Insurance Commissioner Ken Vines said.

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