Here’s a story that’s sure to give medical professionals pause:
A decade ago, a mid-sized group of physicians in a high-risk specialty was paying the price of a really bad run with losses that caused its medical malpractice premiums to skyrocket up to $2 million. Through stringent risk management, and thorough review of its loss history, we got the policy written for nearly 75% less and in the intervening years, the practice continued to improve its loss experience. But more recently, two tragic outcomes caused by a single, older practitioner led to two potential million dollar claims. The physician in question elected to retire, the practice is again able to obtain Medical Professional at market rates, and has gained some stability in a challenging market.
No hospital or medical practice wants doctors on staff who present risks to their quality of care and reputations. Nor do they want to shoulder avoidably high costs of medical malpractice insurance policies and claims. But how does a healthcare organization protect itself and choose candidates wisely that present the lowest risk to their patients and bottom line?
Medical malpractice was the third leading cause of death in the U.S. in 2017, after cancer and heart disease . While a ten-year benchmarking shows case frequency has declined by 27% (particularly among high-risk obstetricians/gynecologists), expenses and indemnity payments continue to rise. And it’s worth noting that 1% of all physicians accounted for 32% of paid claims.
Due diligence essentials topped by loss history review
For the last 15 years or so, the medical malpractice market had been so soft that underwriting standards have been more lenient on loss experience of insureds. This is becoming less the case as the market has firmed. In a trend that started in the northeast and has spread nationwide, medical professionals with adverse loss experiences may pay a higher price for malpractice coverage – or be declined at the get-go.
Improved due diligence during the recruiting process is the first line of defense in managing medical malpractice risks. It’s hugely important but may get sidelined to some extent as the competition for physicians intensifies. The U.S. projects a shortfall of as many as 122,000 doctors. The fact is, though, that only a small percentage of medical professionals are the cause of the majority of malpractice problems.
Whether your organization’s vetting is done by an outside agency, a medical director, a practice leader or non-physician CEO, looking at three areas will help ensure that quality professionals with acceptable risk profiles for their specialties are added to your staff:
- Credentialing is critical. Credentialing is the process of verifying that the education claimed and from which institutions is true, but there’s more to it than that. It’s verifying everything in the physician’s records, and that includes his or her loss history. While you’d expect a surgeon to have more of one than a general practitioner, a two-page loss run in either instance signals a bad doctor.
- Be aware of referral circumstances. Referrals can be good…or less so. Like the university whose board members or professors periodically proposed their physician golf buddies to be professors at the medical school. The political ramifications were uncomfortable when candidates had too many medical malpractice claims for comfort.
- Look for red flags. These can be obvious on a resume, like frequent moves from one hospital or practice to another over the course of the years. Additionally, physicians have substance abuse and psychiatric issues like everyone else; certain specialties are more prone to substance abuse, and circumstances may trigger medical malpractice cases. License suspensions by the medical board related to such issues are public record and important to check out.
Evaluating whether prospective physicians will be a bonus or a burden to your organization in the long run can be a difficult proposition. But in an environment that remains both litigious and competitive for talent, a rigorous screening process has never been more important.
HUB International’s team of healthcare specialists is ready to help your organization assess its risks and ensure that your medical malpractice coverage is sufficient for today’s conditions.
* Original article published on the HUB International Blog