Framing Livelihood Insurance as a Risk Management Product [One Healthcare-Executive’s Experiential Opinion]

DEAN: Dr. David Edward Marcinko; MBA, CMP™

PROVOST: Hope R. Hetico; RN, MHA, CMP™

HOME:  www.CertifiedMedicalPlanner.org

Some might say that this is not a good time to be practicing medicine?  

Why? The reasons are TNTC.

But, increased tuition; decreased income, social and political standing; more paperwork and related scrutiny, and other  associated risks of all types make medicine a less attractive career choice than it was just a generation ago.  Most importantly perhaps – is the fact that for many – Abraham Maslow’s concept of self-actualization is just not happing for us.

What a pity? What a shame? What a loss? 

Of course, doctors like most people, tend to experience loss and risk more intensely than gains, and evaluate associated risks in isolation rather than conglomeration.  While unfortunate, it comes as no surprise for example that goaded physicians might prefer insurance vehicles like the “guaranteed” minimum death benefit of variable annuities – or the “assurance” that comes with disability or long term care insurance – or a traditional and “safe” cash value life insurance policy despite their decidedly higher operating costs and sales commissions, etc.

All human beings tend to seek the “peace-of-mind and safety” of guarantees, assurances, promises and the like. Most of us docs are no different.

The Insurance Mindset 

As an example of this insurance mindset, the economist Christian Gollier PhD revisited the very raison detra’ of the insurance sector by asking the simply question:  “Should one buy any insurance at all since the industry itself is so very skilled at exploiting human fears and foibles on many levels?”

Although this emerging work is descriptive and it is not yet time tested – since some of it aspires to be normative – developing modern economic models of savings and consumption hint that insurance may deserve a smaller role in our personal risk management profile than previously believed.

As a former Certified Financial Planner™ – this is anathema – or is it?  Of course, it may be especially true for medical professionals; or not!

Doctors in Personal Risk-Denial Mode

Amazingly, some physicians – unafraid of the patient death experience they encounter almost daily in their professional lives – enter into a personal risk-denial mode of sorts, when it comes to potential liability impact of professional and political machinations like HIPAA, the US PATRIOT Act, Sarbanes-Oxley and the Balanced Budget Act; etc.

Similarly, they might eschew the new Stark I, II and III self-referral risks, OSHA, DEA, EPA, OCR and the myriad managed care contract and capitation risks that are incumbent to medical practice in 2008.

Moreover, some doctors may disregard new-wave employee, expert witness, peer-review and on-call risks, or even their educational debt load risks. 

There are many liability risks assumed while practicing medicine today; aren’t there?  Of course, we have not mentioned medical malpractice liability risks at all – far too boring and de-rigueur.

The Insurance Industry Visionary Boom

As a former insurance agent, on the other hand, this is an exciting time to be practicing medical risk management and insurance planning.

Why? There is much research and creative enlightenment occurring for the academic and practitioner communities in the insurance industry.

But – and here is the rub – one must be willing to abandon ancient thoughts and remain open to new ideas that identify and provide solutions to the contemporaneous problems of physicians, and enlightened others. 

Allow us to repeat again – as in some areas of medicine today – one must be willing to abandon ancient thoughts and remain open to new ideas that identify and provide solutions to the contemporaneous problems of physicians, and the entire healthcare industrial complex, today.  

Nevertheless, with the acceleration of private, state and federal healthcare reform care initiatives, physicians may face the ultimate personal contingent liability crisis of all – by selecting the wrong profession [or medical specialty].

Thought-Leaders and Fast Followers

First suggested by Yale University economist Robert J Shiller PhD in his new book, The New Financial Order: Risk in the 21st Century, he opines that a new risk-sharing paradigm to protect ourselves from “gratuitous random and painful inequality” may be required.

His solution for laymen – and our own solution for medical professionals – Why, let’s all purchase “livelihood insurance” and frame it as a risk management contract! 

Assessment

Reassuringly, the risks and perils identified on this blog and/or in our related textbooks, dictionaries and online educational courses are not quite as philosophically thought-provoking and new-wave as Shiller’s ideas.

Although, we believe they are equally compelling, more effective, and most applicable to solo practices, small group medical practices, clinics and related healthcare entities.  They are also more pragmatic than this personal diatribe, and we are certain that our products and services will help you recognize and reduce personal and medical practice risks; but only if appreciated, integrated and executed with a trusted and knowledgeable professional.

Conclusion

So, what are your thoughts on this new insurance product to mitigate professional risk; please comment? Are you a visionary thought leader – a fast follower – a slow adopter – or a plodder; please opine?

Invite Dr. Marcinko

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

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