Hospitalists are coming; how to rate them for malpractice insurance?

April 08, 2014

Hospitalists are coming; how to rate them for malpractice insurance:

According to Online News: When it comes to caring for hospitalized patients, it takes a true team to collaborate around the clock with physicians and support services to treat each patient’s health needs. This is the essence of hospitalist medicine; from Primary Care to Ob/Gyn, to Surgical Specialties, good hospital medicine can result in better care for every patient, better medicine for all physicians.

This is one of the reasons why The Doctors’ Company has become a leader in hospital medicine insurance and risk management.

The Doctors’ Company has been working with the Society of Hospital Medicine for years to develop custom patient safety and insurance premium programs to help hospital medicine groups grow and staff without the costly tail as an impediment to recruitment.

Hospital medicine defined:

Hospitalist partner with a patient’s primary care physician to provide treatment to that patient during their hospital stay. Both internal medicine and family medicine physicians generally make up the majority of ‘hospitalist physicians’.

The outcomes and quality of life for the practicing physicians has resulted in more and more hospitals contracting with medical groups for this kind of care. These programs ‘Hospitalist programs’ are a growing trend in hospitals nationwide as they offer a number of benefits to both patients and physicians.

You may be a part of a hospitalist group, trying to figure out that balance between an affordable malpractice policy and one that is conservatively financed, and, you might be trying to find an insurance company which can help you with the proper rating so that each cancellation does not trigger an expensive tail bill.

Rate the medical malpractice for the hospitalists, affordably by the physician’s work, not by the working physicians.

The Doctors’ Company, working with The Doctors’ Insurance Agency has a policy that is purely rated by counting the Relative Value Units, not the physicians, the premium is a function of the work that your group does, not by the number of providers staffing the work.

A word about these mysterious RVU’s (mysterious to some)…and, how the RVU Malpractice Premium Pricing model works:

These are the purest way of evaluating a risk for purposes of rating a malpractice insurance policy. These medical groups have too much to do, there are constant scheduling demands on the group; staffing an 84 hour week is hard enough…24/7 requires a bunch of doctors and mid-levels; and, each may bring with them their own tail encumbrance for professional liability insurance.

Our objective in placing a hospitalist medical group is to find a policy to level off the high cost of tail.

if you can find a policy to level that spike in malpractice premiums, than you will have an easier time recruiting physicians. Recruiting physicians is easier when you can offer them active medical malpractice coverage without the high cost of tail.

OB Hospitalist/Laborist pricing:

We have provided this similar rating flexibility for some OB Groups with responsibilities of providing an OB on staff in the Delivery Department of hospitals. One of our clients has a contractual requirement to provide at least 1 OB and 1 CNM in the hospital ’24 – 7 ‘ In order to help them build this program we provided part time pricing for the Ob/Gyn’s working just in the hospital.

This pricing is unique and allows for premium savings up to the amount stated above per doctor for those physicians without a clinical practice.

To calculate how much the group has saved in premium due to the Laborists Medical Malpractice Insurance Program, I’ve compared premiums applied to the Laborists to what they would have paid if in the capacity of a 1.00 FTE (full time) OB/GYN:

  • Case 1 (savings of $ 14,000 per year since 2011 (change effective 11/1/2011) (approximately $ 30,000 – 35,000 to date)
  • Case 2 (savings of $ 14,000 for 2011-2012 policy year (cancel January 2013) ($ 14,000)
  • Case 3. (savings of $ 11,000 over two years (policy years (2012 and 2013): $ 11,000


Because of the Laborist Program, and the program developed to reduce the premium, the group saved approximately: $ 55,000

Lower premiums overall for the full time clinical OB/GYN’s

It could be argued that there is nothing really ‘saved’ due to this program for the Clinical Ob/Gyns’ . this is because the other OB’s in the group share in the Laborist program and they pay nothing more for this extra exposure. The Laborist work provided at the hospital is priced into the annual premium; and, ..however. Perhaps, the entire group benefits because of the higher quality of care: and, the policies are all significantly discounted as a result.

Since 2011, the Laborists program and the positive patient care provided by your group has been a part of the formal notes and discussion and documentation of your group for the last three policy renewals.

Contracting with a group of physicians to provide care in any specialty in the hospital is supposed to improve outcomes, provide better continuity and fewer mistakes in the hospital. Recently, however, it was reported in the Infectious Disease News that Increased workload among hospitalists is linked to clinically significant increases in patient length of stay and cost.

Do Hospitalists improve outcomes, length of stay and overall patient care?

A study by Daniel J. Elliot, MD, MSCE, of Christiana Care Health System in Newark, Del; concluded after studying tens of thousands of inpatients between 2008 and 2011; studying 24 hour care provided by one of three hospitalist groups.

One of the definitions for workload to determine whether the physician group was over scheduled was the total number of generated relative value units (RVUs) ; and, as is often the case when analyzing data for hospitalist and emergency medical groups, the number of patients for whom the doctor submitted a billable appointment was also considered in the study.

The researchers allocated the workload value for each hospitalist for every patient for whom they submitted a reimbursement. Trying to determine if the length of stay was shortened or affected: .

The researchers found that the LOS increased in proportion to the workload, especially in cases of lower hospital occupancy. In cases where hospital occupancy was less than 75%, LOS increased from 5.5 to 7.5 days as workload increased. LOS increased exponentially above a daily RVU of roughly 25. “For now, this study illustrates that, although 15 patients per hospitalist might not be a magic number in every setting, programs that generally run censuses of more than 15 may want to find ways to lower this workload, perhaps by employing more physicians or by using nonphysician providers,” Robert M. Wachter, MD, of the University of California, San Francisco, wrote in an accompanying editorial. “ The right census number will be the one in a given setting that maximizes patient outcomes, efficiency, and the satisfaction of both patients and clinicians.”