Are Health Systems Paying too much for Physicians Medical Malpractice?

October 30, 2015

The Health Care System Model of Acquisition and Mergers

Seems that in this time of consolidation, mergers and acquisitions of medical groups, medical facilities, individual physicians, health systems, hospitals and foundations have an endless supply of capital. The model seems to be that the acquiring entity pays incentives which include signing bonuses, training, cost of moving, integrating physicians into the new system; and then to add insult to injury they are covering the cost of the present malpractice insurance (the past retroactive risk as well as the costs of the future tail).

Defense of the Practice of Good Medicine – The Doctors’ Company investing in Good Medicine

The Physician Insurance Association of America has been successful in specifically managing the cost of defense as well as investing in the resources necessary to avoid a lawsuit altogether. The Doctors Company formed the National Patient Safety Foundation based on the principle that the defense of the practice of good medicine was a realistic and worthwhile goal. One that is the overarching goal of investing in physician knowledge so that patients are safer. Of course the intended consequence of the Patient Safety Foundation would be fewer lawsuits because are fewer injuries.

University Systems working with PIAA Medical Malpractice Insurance Companies.

There are many financially sound, strong, experienced and focused medical malpractice insurance companies across the country. With the proliferation of the hospitalist model, primary care and specialty care services provided through Telemedicine technology combined with the ease of travel, allow for many medical groups that spans across many states. This means that the physician malpractice carriers are learning how to underwrite and insure many different types of groups. A few of the university-model medical groups are learning that it is less expensive to manage the claims themselves and are beginning to contract with individual physician malpractice companies to either provide a secondary layer of insurance or to handle the risk management insurance and defense altogether.

The Doctors Insurance Agency is working with a medical group in California as well as Colorado to help credential the physicians whom they are contracting, as well as handle the cost of risk management and malpractice defense. By working with The Doctors Company we have been able to reduce the cost of recruitment as well as the cost of tail when physicians must leave the group or cancel their policies. This is accomplished by providing a condition on the malpractice policy which allows for easy additions and cancellations of physicians and mid-level providers. We are saving thousands in the cost of retroactive insurance as well as the prohibitive cost of tail.

We are ready to work with your group to discuss the cost of interstate and tele-health malpractice insurance, departed tail rosters and RVU generated hospitalist malpractice policies. Our team of professional liability insurance underwriters can help reduce your malpractice insurance expenses.