Between the Rock and the Hard Place

Lewis Sharps, MD, CEO, Positive Physicians Insurance Company

I wrote the below article in 2016 as a warning that the Medical Malpractice Marketplace was shifting from a soft competitive market to a harder market for physicians with rate increases in the future. Unfortunately I was right.

As a physician driven company, we are very sensitive to physician rate increases in an environment where reimbursement is constantly decreasing.

Since I wrote this article almost 4 years ago, the market place continues to deteriorate with national payouts and severity steadily increasing since 2012 and up over 15%. The consolidation and aggregation of physicians, as well as the implementation of EMRs, has resulted in a breakdown of the patient/physician relationship. In addition, juries suffer from amnesia and have forgotten the days when their wives had to go to other states to deliver their babies because OBs had fled high risk states to areas with friendlier venues.

Positive Physicians Insurance Company was a life raft for hundreds of physicians in2002 and will be positioned to be a Physician Life Raft for the future.

Storm Clouds on the Horizon

Lewis Sharps, MD, CEO, Positive Physicians Insurance Company

Is the next malpractice crisis just over the horizon? Independent data released by Diederich Healthcare compares Total National Payouts for Medical Malpractice Settlements year over year. From 2003 to 2012, payouts decreased each year.

Since 2012, Total National Medical Malpractice Payouts have increased for 6 (six) consecutive years. Total increases have been > 15% over the last three years despite the fact that insurance premiums have remained flat or decreased.

Historically, the insurance industry is the last to acknowledge a change in market direction. The reasoning is a fear that raising premiums will result in a loss of insured. During the last crisis from 2001 until 2008, PPIX was a life raft for hundreds of physicians who could not get coverage despite excellent claim histories.

Our company raised rates at a fraction of what other companies did. How do We Prepare for the Next Crisis and what are the Solutions?

1. First be aware that the market may be changing. Remember that during the last crisis, almost every major malpractice carrier fled both P.A., and surrounding states, leaving physicians scrambling for coverage. Remember that Positive Physicians Insurance Exchange was the life raft that insured hundreds of physicians allowing them to stay in their home state. Since 2002, Positive has had 95% retention and continues to provide the best risk management and personal service in the industry.

2. Don’t jump on the latest bandwagon. As your insurer, it is not our goal or responsibility to mandate the type of procedures that you do. But if you are interested in lowering your premium and risk profile we recommend waiting until new procedures pass the test of time. We all remember ceramic hips that blew apart, treatments that resulted in mass tort cases and technologies that did not pan out.

3. Oversee your physician extenders. Review your contracts and reporting processes. Though your practice may run perfectly, these contracts and reporting processes will be used against you in a claim.

4. The power of words. Remember that everything that you write down, or enter ina n EMR can and will be used against you during a claim. Think about what you say! Think about how the same innocuous word can be misinterpreted by a trial lawyer. Think about “What Ifs”. Consider documenting in your office record that you told your patients to call if they have any concerns between visits. Think twice about what you say about other physicians. Comments can and often will be taken out of context resulting in one of your peers getting sued.

5. Remember that as a physician you are between the Rock and the Hard Place. As physicians it is our goal and obligation to deliver the best healthcare possible. At the same time we are inundated with requests to keep costs down.

A recent study documented that physicians who practice defensive medicine get sued less often. It is hard to believe that someone paid for a study that proved the obvious.

We do not condone ordering unnecessary tests, but also realize that the health benefit company will not come to the trial on your behalf when the plaintiff attorney states that if you ordered that test you could have found the problem earlier.

Positive Physicians

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