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Winston-Salem Novant Health announced today that it has formed a new physician malpractice insurance company to help the health system's doctors better control their medical malpractice premium costs. The company's name is New Star, Inc. and its operational offices will be based in Winston-Salem. New Star is licensed by the South Carolina Department of Insurance and also approved by the North Carolina Department of Insurance.

New Star is a physician-owned risk retention group, which means, as owners of the company, physicians will have the opportunity to more positively impact their medical malpractice premium costs into the future. Initial members will be joining through the Novant Medical Group, which consist of 691 physicians. The company will offer its products only to physician practices where doctors have medical staff privileges at Novant Health facilities, such as Forsyth Medical Center in Winston-Salem, Presbyterian Hospital in Charlotte and Brunswick Community Hospital in Supply, NC.

Officials at Novant Health say that the idea to form a malpractice insurance company initially came from surveys and interviews with doctors who expressed tremendous concerns about the dramatically rising costs of medical malpractice premiums. Some specialists reported paying more than $50,000 a year in insurance premiums alone.

"We see the formation of New Star as an opportunity for our physicians to take control of rising malpractice insurance costs," says Elms Allen, MD, executive vice president of medical staff services at Forsyth Medical Center. "Assembling physicians with similar philosophies of quality patient care and safety under one insured umbrella is an idea whose time has come," Allen says.

Paul Wiles, president of Novant Health, agrees. "Since we have the infrastructure in place to help manage malpractice risks with our practicing physicians, it was a logical step for us and part of our continuous emphasis on quality improvement throughout the Novant Health system," says Wiles.

On average, malpractice insurance premiums for all physicians nationwide have been rising about 15 percent a year nearly twice as fast as total health care spending per person. The increases are more dramatic for certain specialties such as obstetricians/gynecologists and general surgeons.

"We hope to curb rising malpractice costs, and ultimately provide a better medical practice environment for our physicians," says Allen.