RISK MANAGEMENT & LIABILITY PROTECTION FOR PHYSICIANS

And … Their Insurance Agents and Financial Advisors

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By DR. DAVID EDWARD MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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BOOK REVIEW

It is not uncommon for practicing physicians to have more than a dozen separate insurance policies to protect their medical practice and personal assets. Yet, most doctors understand very little about their policies.BOOK REVIR

Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™explains to physicians and insurance professionals the background, theory, and practicalities of medical risk management, asset protection methods, and insurance planning.

The book presents information in a manner that is convenient and highly useful for busy medical practitioners. It discusses the medical records revolution and addresses concerns regarding cloud computing, data security, and technological threats.

The book covers modern health law and policy, including fraud and abuse, workplace-violence, Medicare compliance, HIPAA regulations, AR protection strategies with internal controls, P4P and value based care, insurance and reputation management, and how the ARA legislation is impacting physician practices. It also includes case models and examples that provide you with a real-world understanding of how to recognize and reduce personal and medical practice risks.

With time at a premium for all, and so much information packed into one well-organized resource, this book is a must-read for every physician and financial advisor that serves the health care sector. The book will help physicians make better decisions about the risks they face and will help financial advisors improve the value they provide to their clients who are doctors.

MORE = ORDER HERE: https://www.routledge.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989

THANK YOU

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Hospitals and Health Care Organizations

MANAGEMENT STRATEGIES, OPERATIONAL TECHNIQUES, TOOLS, TEMPLATES AND CASE STUDIES

TEXTBOOK REVIEWS:

Hospitals and Health Care Organizations is a must-read for any physician and other health care provider to understand the multiple, and increasingly complex, interlocking components of the U.S. health care delivery system, whether they are employed by a hospital system, or manage their own private practices.

The operational principles, methods, and examples in this book provide a framework applicable on both the large organizational and smaller private practice levels and will result in better patient care. Physicians today know they need to better understand business principles and this book by Dr. David E. Marcinko and Professor Hope Rachel Hetico provides an excellent framework and foundation to learn important principles all doctors need to know.
―Richard Berning, MD, Pediatric Cardiology

… Dr. David Edward Marcinko and Professor Hope Rachel Hetico bring their vast health care experience along with additional national experts to provide a health care model-based framework to allow health care professionals to utilize the checklists and templates to evaluate their own systems, recognize where the weak links in the system are, and, by applying the well-illustrated principles, improve the efficiency of the system without sacrificing quality patient care. … The health care delivery system is not an assembly line, but with persistence and time following the guidelines offered in this book, quality patient care can be delivered efficiently and affordably while maintaining the financial viability of institutions and practices.
―James Winston Phillips, MD, MBA, JD, LLM

Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors : Best Practices from Leading Consultants and Certified Medical Planners™ book cover

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ASSESSMENT: Your comments and thoughts are appreciated.

INVITATIONS: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

CONTACT: Ann Miller RN MHA

MarcinkoAdvisors@msn.com

Ph: 770-448-0769

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THANK YOU

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MARCINKO’s Upcoming WEBINARS from MentorHealth

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MentorHealth, the sponsor of these ME-P webinars, is a comprehensive training source for healthcare professionals that is high on value, but not on cost. MentorHealth is the right training solution for physicians and healthcare professionals. With MentorHealth webinars, doctors can make the best use of time, talent and treasure to benefit their continuing professional education needs.

So, it is no wonder why they partnered up with the ME-P to produce these three exciting and timely Webinars, delivered by our own Publisher-in-Chief and Distinguished Professor David Edward Marcinko.

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A Medical Malpractice Trial From The Doctor’s POV

Even among the sciences, medicine occupies a special position. Its practitioners come into direct and intimate contact with people in their daily lives they are present at the critical transitional moments of existence.

For many people, they are the only contact with a world that otherwise stands at a forbidding distance. Often in pain, fearful of death, the sick have a special thirst for reassurance and vulnerability to belief. When this trust is violated, whether rooted in factual substance or merely a conclusion lacking in reality, American jurisprudence offers several remedies with the core being civil litigation.

We have personally witnessed a spectrum of reasons that prompts a patient to seek the counsel of an attorney.

Monday, February 6, 2017

10:00 AM PST | 01:00 PM EST

60 Minutes

$139.00

Medical Workplace Violence Issues

Violence in hospitals usually results from patients, and occasionally family members, who feel frustrated, vulnerable, and out of control.

Transporting patients,long waits for service,inadequate security, poor environmental design, and unrestricted movement of the public are associated with increased risk of assault in hospitals and may be significant factors in social services workplaces as well. A lack of staff training and the absence of violence prevention programming are also associated with the elevated risk of assault in hospitals.

Although anyone working in a hospital may become a victim of violence, nurses and aides who have the most direct contact with patients are at higher risk.

 Wednesday, February 22, 2017

10:00 AM PST | 01:00 PM EST

60 Minutes

$139.00

Romantic Patient Advances

Within the medical practice, clinic, hospital or university setting, faculty and supervisors exercise significant power and authority over others. Therefore, primary responsibility for maintaining high standards of conduct resides especially with those in faculty and supervisor positions. Members of the medical faculty and staff, including graduate assistants, are prohibited from having “Amorous Relationships”with students over whom they have “Supervisory Responsibilities.”

“Supervisory Responsibilities”are defined as teaching, evaluating, tutoring, advocating, counseling and/or advising duties performed currently and directly, whether within or outside the office, clinic or hospital setting by a faculty, staff member or graduate assistant, with respect to a medical, nursing or healthcare professional student.

Such responsibilities include the administration, provision or supervision of all academic, co-curricular or extra- curricular services and activities, opportunities, awards or benefits offered by or through the health entity or its personnel in their official capacity.

Monday, March 13, 2017

10:00 AM PST | 01:00 PM EST

60 Minutes

$139.00

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WEBINAR NOTE: These are online interactive training courses using which, professionals from any part of the world have the opportunity to listen to and converse with some of the best-known experts in the HR Industry. These are offered in live & recorded format for single & multiple users (corporate plans). Under recorded format each user gets unlimited access for six months. Corporate plans give you the best return on your investment as we do not have upper limit on the number of participants who can take part in webinar.

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The Ever Changing “Standard of Medical Care”

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Lard and Nicotine

Via Hend:

According to Wikipedia, a standard of care is a medical or psychological treatment guideline, and can be general or specific. It specifies appropriate treatment based on scientific evidence and collaboration between medical and/or psychological professionals involved in the treatment of a given condition.

Some common examples:

1. Diagnostic and treatment process that a clinician should follow for a certain type of patient, illness, or clinical circumstance. Adjuvant chemotherapy for lung cancer is “a new standard of care, but not necessarily the only standard of care”. (New England Journal of Medicine, 2004)

2. In legal terms, the level at which an ordinary, prudent professional with the same training and experience in good standing in a same or similar community would practice under the same or similar circumstances. An “average” standard would not apply because in that case at least half of any group of practitioners would not qualify. The medical malpractice plaintiff must establish the appropriate standard of care and demonstrate that the standard of care has been breached, with expert testimony.

3. A physician also has a “duty to inform” a patient of any material risks or fiduciary interests of the physician that might cause the patient to reconsider a procedure, and may be liable if injury occurs due to the undisclosed risk, and the patient can prove that if he had been informed he would not have gone through with the procedure, without benefit of hindsight. (Informed Consent Rule.) Full disclosure of all material risks incident to treatment must be fully disclosed, unless doing so would impair urgent treatment. As it relates to mental health professionals standard of care, the California Supreme Court, held that these professionals have “duty to protect” individuals who are specifically threatened by a patient. [Tarasoff v. Regents of the University of California, 17 Cal. 3d 425, 551 P.2d 334, 131 Cal. Rptr. 14 (Cal. 1976)].

4. A recipient of pro bono (free) services (either legal or medical) is entitled to expect the same standard of care as a person who pays for the same services, to prevent an indigent person from being entitled to only substandard care.

Source: https://en.wikipedia.org/wiki/Standard_of_care

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Assessment

We may not recommend this today, but back in the day…..?

More:

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

WHAT EVERY DOCTOR MUST APPRECIATE … Liability?

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About our litigation system for 2019-2020

[By Dr. David Edward Marcinko MBA]

LINK: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

Dr. Marcinko MBADoctors depend on their trusted advisors to be a source of information on a wide variety of complex topics.

As we have seen, one of the areas in which physicians are increasingly seeking guidance from their attorney, accountant, consultant or financial advisor is in the area of risk management, insurance planning and asset protection.

Risk management

The best experts and consultants seek to create safe steady growth and avoid losses and exposures to things like malpractice judgments integrated with asset protection. A natural extension of this stewardship is making sure that the growth and balance of assets are safe from exposure to an increasingly predatory and hostile litigation system. Most doctors have obvious daily risks like malpractice exposures.

Other sources of exposure are more insidious, such as merely being affluent and visible, owning income property, or something as simple as owning and driving a car every day. The numbers are staggering; we are at a point in our litigation system where we have 70,000 lawsuits filed per day in the United States alone, many without any real merit.

Unfortunately being “right” is not enough to keep physicians safe.

Why doctors are concerned?

As illustrated by the numbers above and below, awards continue to spiral out of control, fueled by litigation attorneys who have become partners in lawsuits and who are economically incentivized to create and magnify adversarial relations between parties who might otherwise reach some reasonable, if not amicable, settlement.

So, here are additional facts about our litigation system to consider, for 2015-16:

  • The average medical malpractice award is now $3.9 MM, and some authorities put this number substantially higher;
  • The average legal costs of settling a frivolous lawsuit is $91,000 – plus the actual settlement amount itself.

The average sexual harassment suit against a small medical practice produces a verdict of $530,000. Employees are suing more often, winning more often and winning proportionally larger judgments. They win 75% of the time. Moreover, only the top 5% of Americans has a net worth of over $1MM. Using this baseline, it’s pretty easy to see where even a doctor who is worth only a few million dollars fits in on the food chain.

Here is more proof why doctors and allied medical providers are sued:

  • MDs are high net-worth, high liability, or they will be soon (i.e. new practitioners)
  • DOs have assets that would be difficult to replace if lost or reduced
  • DPMs have professional surgical liability
  • DDSs have employees and own their own practice
  • CRNs are highly visible, traceable, and or collectible
  • ODs own liability generating assets, i.e. rental property
  • NPs and ANPs have a spouse and/or children.

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Assessment

What doctors and all medical professionals must take to heart is that litigation attorneys are in business. Just like any business, including a medical practice, they have weekly meetings in which they examine growth, cash flow, revenue goals and new leads or opportunities. This economic motivation is a key and explains in part why we see awards rising and why plaintiffs’ attorneys regularly seek and obtain awards above the limits of applicable liability insurance policies.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners(TM) 

About Medical Malpractice Depositions

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Understanding the Legal Process

[By Dr. Jay S. Grife JD MA]

[By Dr. David E.Marcinko MBA]

Depositions are a legal discovery method that deserves specific discussion because the deposition, or oral statement under oath, is such a vital piece of the puzzle.

In general, either party may depose any other person but in general, a deponent has some relevance to the case, whether it be as a fact witness, an expert witness, or a before and after witness (a person who can testify as to the state of affairs of a person before and after the incident in question).  

Gaining Insight 

Depositions are taken to gain an insight into what information will be necessary in order to prosecute or defend a case. Even more important is that the oral deposition provides the respective lawyer with a chance to evaluate that person’s reactions to stress, to personally see for the temperament of the witness, to view the witness’ demeanor, and to analyze how that person responds to spontaneous events. 

Deposition Format 

The format is typically oral and in person question and answer dialogue although recent technology has permitted depositions via telephone conference, video-conference, and various internet medium exchanges. Depositions can be taken via written question format but often this type has limited value because the deponent will not be asked any follow-up questions and a statement cannot be investigated further.  

Do’s and Don’ts for Doctors 

There are many lists of do’s and don’ts that lawyers often provide their clients, but the fundamental character of the deposition is for the deponent to tell the truth. While it is rare that a trial sees the Perry Mason moment, these do in fact happen and when it does, the result is often exactly what viewers of that classical television series see.  

law

Skeletons in the Closet 

As a rule, in light of the attorney client privilege, I insist upon knowing whatever skeletons are in my client’s closet, past or present. It is of ultimate importance that a client confides the truth to their lawyer so that the any adverse issue can be addressed through cognizant decision, rather than surprise.

In a recent case, my client was being deposed and admitted to me that she was a lesbian. Her sexual preferences did not matter but the fact that she disclosed a misdemeanor arrest for marijuana did. I advised her to tell the truth about both issues and explained why this was important.  During her deposition, when the homophobic defense counsel abrasively probed her sexuality, she readily admitted her own sexual preference. That was fine but the defense lawyer continued to “push her buttons’ until she finally screamed at him to “shut the f… up”.  

The die was cast because the next line of questioning involved her arrest record as to the marijuana. When my client denied any other arrests but for the drugs, it was simple for the defense counsel to show her documentation of four earlier felony arrests including one for fraud, which ultimately cost her the case.   

The important fact to remember is that we all have a past and that being truthful as to its content can often dictate a successful outcome of a case. 

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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The Medical Malpractice Discovery Process

Understanding the Legal System

 By Dr. Jay S. Grife; JD, MAinsurance-book

Since most medical negligence cases are fact driven, the topic of discovery demands a specific and integral role in the trial process.  Discovery simply is the methodology used in American jurisprudence for each side to discover all of the evidence that is available in the case and to have that documentation analyzed. While specific states have rules that may limit discovery, the purpose is to prevent trial by ambush.  

Federal Rules of Civil Procedure 

According to the Federal Rules of Civil Procedure [FRCP], discovery can include written interrogatories or questions, requests for production, deposition, either oral or through written statements, request for examination, request for inspection of evidence, requests for admission, and finally independent, or as Plaintiffs’ lawyers commonly label them, compulsory medical examinations. 

Definition and Scope 

The scope discovery methods are generally a book onto itself. So, suffice it to say, discovery is the process where each party exchanges information so the merit of their respective cases can be evaluated.  Lawyers will use this evidence in developing the theory of their case and the order in which that evidence will be presented to the trier of fact.

Conclusion 

While discovery is often viewed as a mundane part of the litigation process, in reality it is the very topic that often proves dispositive in the ultimate outcome of a medical malpractice case; whether it is tried, settled, or rejected.

And so, your comments are appreciated? 

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Malpractice Trial Types for Doctors

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Understanding Different Trial Types

[By Dr. Jay S. Grife; JD, MA]insurance-book2

There are two types of malpractice trials available to doctors involved in litigation; by jury or a bench trial exclusively by the judge. 

Jury Trial

In a trial by jury, the judge determines the law and the jury determines the facts.

Bench Trial 

In a bench trial, the judge wears both the hats of being the trier of law, and the trier of fact.  The U.S. Constitution guarantees a trial by jury.  If a party does not request a jury trial that right may be deemed forfeit and by the same token, both sides must agree to waive a jury trial. 

Which Trial Type is Best? 

So, which trial type is best, and why would anyone choose to have a case heard by a judge as opposed to a jury, or vice versa? The reasons are mainly based on preconceived notions about judge and juror biases.

Generally, most litigants favor a jury over a judge because the decision is put into the hands of many rather than in the hands of one. Plaintiff patients usually like juries because lay individuals are believed to be more sympathetic, and a Plaintiff can appeal to the emotions of a jury.

Conversely, Defendant doctors usually prefer bench trials because a judge is thought to be more objective in deciding a case. Requesting a bench trial can also result in a much quicker trial date. Since court dockets in most large cities are becoming increasingly congested, the time difference between a jury trial date and a bench trial date can be literally years.

Assessment 

None of the perceptions about the benefits of a jury trial or a bench trial apply to all situations—every case is different.  And, there is at least some empirical evidence that some of the commonly held conceptions about bench and jury trials are actually misconceptions. 

For example, while it is almost universally believed that juries tend to favor Plaintiffs and award much higher monetary amounts, a recent study by the Department of Justice suggests that judges favor Plaintiffs and return higher verdicts.

Still, jury trials outnumber bench trials by about two to one. 

Conclusion 

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Medical Malpractice Claim Causation Study

Physician Errors Do Play a Role — A.I.M.

 By  Staff Writers

 According to a two-year old report in the Annals of Internal Medicine, physician errors are a factor in about 60% of medical malpractice claims that involved patients allegedly injured because of missed or delayed diagnoses. 

The B&WH Study 

For the study, researchers at Brigham and Women’s Hospital in Boston reviewed 307 claims from four large malpractice insurers that were closed between 1984 and 2004. 

181 of the claims involved diagnostic errors that allegedly injured patients; and ignored the outcomes of the claims.

Although most of the claims involved several factors, the major ones involved physician errors. 

The Results 

According to the study:

  • 100 claims involved failure to order appropriate diagnostic tests; 
  • 81 claims involved failure to establish a plan for appropriate follow-up care;  
  • 76 claims involved failure to obtain an adequate H&P or PE; 
  • 67 claims involved improper interpretation of diagnostic tests.  

 

Contributing Factors 

The main factors that contributed to the physician errors included failures in judgment (79%), memory problems (59%), lack of knowledge (48%), patient-related issues (46%) and patient handoffs from other physicians (20%).

Conclusion 

And so, how does this impact your thoughts on the topic; please comment? 

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Revisiting Medical Malpractice Insurance

Further Liability Considerations for Physicians

By Staff Writers 

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As a physician or other medical professional, you are no doubt suffering under the spiraling premium payments for malpractice insurance. So, always take the time to review your policy often and consider the following evolving issues.

New Considerations for 2008 … and Beyond

·Perhaps your practice has specialized as your reputation has grown?

 · Has your insurance agent designed a policy around the needs of your office? 

Do not pay for coverage you would not use, and certainly do not leave gaps in your coverage so as to bear the risk of losses yourself.  A series of riders and endorsements from an insurance company will create a more specialized policy that addresses your insurance needs. 

Staying within Policy Scope

With respect to the scope of malpractice coverage, many liability insurance policies will deny coverage if an intentional tort is alleged.

One example of an intentional tort is intentional infliction of emotional distress, which doctors may need to defend against if they misdiagnose a patient while having a financial interest in the treatment of the diagnosis.  

Battery is another intentional tort with which doctors are often charged. 

Battery can be defined as any injurious contact without consent. The necessity of obtaining informed consent from each patient is becoming increasingly important as a defense against such claims.

Intentional torts are to be distinguished from torts of negligence, which are usually covered under most liability insurance policies.  Negligence claims arise out of mistakes usually attributable to carelessness. 

Make sure your insurance policy extends to intentional torts to prevent these kinds of cases from being denied coverage by your insurance company.

Policy Limit Considerations

In addition, carefully consider the policy limits of your insurance.  Do not accept the customary limits proposed by the insurance company. 

Instead, research the minimum amounts of coverage required in the location in which you practice, and adjust that upward to reflect the factors that cause malpractice judgments to increase.

Such factors include the clientele that you serve, the speed with which you must make medical decisions, the hospitals and surgical centers with which you are affiliated, and the relative cost of repairing damage made by an erroneous decision.

Conclusion 

And so, have you ever been sued for a cause other than strict medical negligence; an intentional tort, for example? 

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Trends Suggest Specialty Liability Insurers Growing

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Physician Owned Malpractice Risk Retention Groups [RRGs]

By Dr. David Edward Marcinko; FACFAS, MBA, CMP™

[Editor-in-Chief]

dr-david-marcinko1 One new(er) method used to keep medical malpractice liability premiums low(er) may be specialty specific carriers, using Risk Retention Groups [RRGs].

In this business model, member physicians perform underwriting tasks, rate setting, and strategic operations. They also provide additional services, such as providing attorneys, medical risk and practice management experts; and are less likely to settle lawsuits, too.

History of RRGs

First prominent in the 1970’s, controlling more than 60% of medical malpractice market share and $ 6.1 billion in net premiums, RRG muscle dwindled in the 1990’s. RRGs however, seem to be making a comeback in 2008; according to proprietary iMBA Inc research studies www.MedicalBusinessAdvisors.com 

But there is a downside to physician owned liability insurers like RRGs. These include limited experience, reserve requirements, financial backing and a sparse but improving track record.

Current State of the Industry

Nevertheless, there are more than 51 specific sub-markets, and 40 so-called “bed-pan” mutuals, now serve orthopedic surgeons in Pennsylvania (Positive Mutual Risk Retention Group, Inc.), ophthalmologists in San Francisco (Ophthalmic Mutual Insurance Company), podiatrists in Tennessee (Podiatry Insurance Company of America), general practitioners in Illinois (Illinois State Medical Inter-Insurance Exchange), internists in New Jersey (MIIX Advantage Insurance Corporation), optometrists (Optometric Insurance of America) and chiropractors (Nationwide Chiropractors) across the country.

The Physician Insurers Association America, in Rockville MD, represents many of these RRGs and reports a membership combined-ratio which is a measurement of company viability of 141 – compared to an industry average of 154.

Actuaries suggest the figure should be closer to 125.*

The top five physician-owned medical malpractice mutual companies include: MLMIC Group, Doctors Company Insurance Group, Pro Assurance Group, Healthcare Indemnity, Inc., and the NORCAL Group. Laggards included neurosurgeons and OB/GYNs.

Assessment

A related new innovation for RRGs may be in the form of a tracking company, or system of medical providers to monitor and follow unhappy patients who are considered the most likely to sue.

Remember, liability underwriters and actuaries are risk-adverse by education and training. They react slowly, cautiously and incrementally to shifting risk factors; especially toward positive trends that might suggest reduced underwriter income and liability premiums.

Conclusion

Physicians, healthcare executives and medical group administrators must therefore develop their own strategies for evaluating liability risk factors, and lead the trend to reduced operational expenses through managed liability costs.

Perhaps this may be accomplished by RRGs in some cases?

And so, what experience do you have with this hybrid medical liability insurance machination?

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

*Source: AM Best  

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Malpractice Crisis – What Crisis?

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State Tort Reform Improves Liability Climates

[By Staff Writers]

The American Medical Association (AMA) recently reduced the number of states in liability “crisis” to 17 by the end of 2007, down from 21 in 2006, while upgrading Arkansas, Georgia, Mississippi and West Virginia to a more “moderate” liability environment.  

Before passing various tort reforms of the past few years, those states had been listed as being in “crisis” because unaffordable insurance premiums were forcing physicians to retire early, give up high-risk procedures or leave the state. 

Still, pundits caution that some legislative changes have yet to take hold, and other states face legal threats, preventing significant decreases in premiums. 

What do you think – is the malpractice liability crisis over?

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Risk Retention Groups

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RRGs and Medical Malpractice Insurance Companies

[By Dr. David Edward Marcinko; FACFAS, MBA, CMP™]

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Definition

Risk Retention Groups are owner-controlled insurance companies authorized by the Federal Risk Retention Act of 1986.  An RRG provides liability Insurance to members who engage in similar or related business or activities for all or any portion of the exposures of group members, excluding first party coverage’s, such as property, workers’ compensation and personal lines.  Authorization under the federal statute allows a group to be chartered in one state, but able to engage in the business of insurance in all states, subject to certain specific and limited restrictions.  The Federal Act preempts state law in many significant ways.

RRG Advantages:

Medical RRGs

  • Avoidance of multiple state filing and licensing requirements;
  • Member control over risk and litigation management issues;
  • Establishment of stable market for coverage and rates;
  • Elimination of market residuals;
  • Exemption from countersignature laws for agents and brokers;
  • No expense for fronting fees;
  • Unbundling of services.

Of 130 new medical malpractice liability insurance companies that entered the market between 2002 and 2006, 65 percent were risk-retention groups, according to a study conducted for the National Risk Retention Association by the actuarial consulting company Milliman Inc.

Statistics from the Risk Retention Reporter, a journal that tracks the industry, showed that through September, 43 percent of the 23 risk-retention groups formed this year across various sectors are doctor-owned, while in 2001, no new physician risk-retention groups joined the market.

RRG Disadvantages

Some doctors and industry experts warn about drawbacks of risk-retention groups and question whether the physician-run companies – most of them relatively young – can survive future claims payouts and tough market cycles, while doctors do not have access to state guaranty funds to back up their coverage if a risk-retention group struggles financially or goes out of business. The Risk Retention Reporter noted that, anecdotally, physician self-insurance companies have failed at no greater rate than traditional carriers in recent years. 

Conclusion

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The Medical Malpractice Insurance Crisis 

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief, FA and Health Insurance Agent]

DEM @ WhartonHas the Corner Been Turned?

In the fall of 2003, the American Medical Association announced that six more states had reached a medical malpractice crisis, with patients losing access to care due to physician attrition. The AMA’s list of crisis states then totaled 18.

The new states were: Arkansas, Connecticut, Illinois, Kentucky, Missouri and North Carolina. The 12 states previously identified are: Florida, Georgia, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Washington and West Virginia.

More recently, the Medical Group Management Association (MGMA) reported that medical malpractice premiums for its members increased by more than 53% between 2003 and 2004. Today, about 25% of those physicians planned to retire, relocate or restrict their services over the next few years. Massachusetts was especially hard hit in 2003-06, as the practice environment worsened for the twelfth consecutive year, driven primarily by rising premiums for medical malpractice coverage. 

Yet, in 2007, the rate of medical malpractice claims fell for the fourth straight year in Pennsylvania, with half the payout of 2003. That suggests that claims are getting smaller, as observer’s credit a 2002 law which banned attorneys from moving cases to counties they felt would have more favorable juries. Now, the state’s physicians would like to see the state enact caps on non-economic damages. 

So, how is this crisis affecting you; if at all?

Spring 2011 - NIH

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