Internal Medicine rates:

Expect Internist Rates to lower again.  Medical malpractice insurance rates have been decreasing since 2005; and, in spite of an increase in risk, expected frequency of claims increasing connected to a larger demand, hospitals employing physicians as the gatekeepers, the costs will continue to decrease. Internists, working as hospitalists referring to other hospital specialists will increase their involvement in claims;  there will be a boost in reimbursements by Centers for Medicare and Medicaid Services during 2013 and 2014. 

If the Affordable Care Act is sustained, 32 Million o more insureds could be dumped into the U.S. Healthcare system, most of whom will need primary care. There are 158,000 Internists, with a diminishing number of physicians available for the independent market, tough competition from medical malpractice insurance companies will unrealistically hold premiums down.  The fact is: hospitals and large, closed panel health care organizations are working hard to control the flow of patient,  With 32 Million patients connected to some form of reimbursement on the table, there is something to fight for.

Competition will take the form of commodity battles, lowering prices to attract and retain business.  The battleground will shift away from the recent trend of adding electronic data liability, administrative medicine defense and employment practices liability insurance.  Those areas are bringing on real losses, expenses that will have to be calculated and contemplated by the med mal carriers.  For now, finding a foothold is important to these insurance companies.  Internists received a 10 percent payment increase for new and established office visits and many other services,  These higher payments will last through 2016 as long as the Affordable Care Act continues moving toward implementation.

Deeper discounts in states with non economic damage caps (such as California and Texas) are on the horizon,  Since the 2003 enactment of the Texas law, rates in the state have fallen on a reduction in the number of payout of claims.  Physicians purchase lower limits, which cut the revenue of local, mono state insurers such as Texas Mutual Liability Trust.  In California, Cooperative of American Physicians looks to be in a puzzling market situation to say the least.

These mono line, mono state insurers are feeling this pinch of price competitiveness, and loss of potential customers due to the consolidation of providers and control shifting to large health care organizations.

As hospital systems pick up primary care groups, look for the prices to remain flat (perhaps, unrealistically flat, but premiums will have to come in from other sources in order to continue to underwrite these low, discounted premiums.

The American College of Physicians loss trends show internal medicine is experiencing an increase in the average payout per claim but a decreasing total number of claims filed against these specialists.  The American College of Physicians’ Internal Medicine Malpractice Insurance Program is sponsored by The Doctors’ Company, the nations’ largest physician owned medical malpractice insurance company.  The Company reports that 58 % of claims from 2000-2007 were due to diagnosis related negligence. Failure to diagnose claims accounted for 79 % of the negligence, of which 29 % involved cardiovascular disorders.  A delay in diagnosis accounted for just under 25 % of negligence In spite of processing a lot of claims, just 2.7 percent of the claims filed went to a verdict.  The Physician Insurers Association of America data shows that the average indemnity payout for a single internal medicine claim was nearly $ 300,000 from 1985 – 2009.

The reduction in available internists to insure, will push more of these single focused, physician owned medical malpractice companies to expand their trading to more than one state,  they are going to work hard to find new business and retain business of insureds practicing across state lines.  These carriers will also find ways to partner with hospital, offering to insure facilities, and specialty specific in order to broaden the methods of collecting premium. 

Physician owned insurance companies are looking to get into the hospital insurance business mainly because ‘that is where the money is’.  As the government works out its system of reimbursement, medical groups and large scale facilities will continue to bolster against the change ahead.  The hospitals have injections of capital, community reserves and public support to succeed,  which community does not want a successful, specialty rich, well supported and staffed hospital in its city center;  The more control of the patient flow a hospital can maintain, the more revenue directed toward it.  The cross border expansion of hospital and medical group systems is forcing mono state medical malpractice insurance companies to reach, to grow and to engage in the lengthy political battles of interstate commerce, licensing and tort reform.

As an example, leading the way for the industry, The Doctors’ Company is a national sponsor of many national programs.  In addition to cyber guard and medi guard regulatory risk coverage, the physicians in the program will receive a 5 % discount as well as the deep 15 – 25 % claims free discounts applied to those insured for three claims free years.

 

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