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Do You Deserve the Best Protection When it Comes to Your Reputation and Livelihood?
By Terrance J. Sheehan, MD
President & CEO
Do you deserve the best protection? Admittedly,
“deserved” is a loaded word. But think
about it. If you’ve never been sued for malpractice,
maybe you can rationalize a “No, I don’t
need the best protection,” answer. But do so at
your peril. Because if you’re a physician who
has paid your dues in medical school, in residency
and finally in either private practice, as an employee or
both, wouldn’t you want the best protection?
Assuming you would, indeed, want the best protection if you
were sued, then you can’t afford to make a decision on professional
liability insurance without looking at what you give up if
you choose a carrier solely on price.
Best vs. The Rest
So what exactly does it mean to have the best protection?
First, consider who will represent you in the case of a claim.
Would you rather have a carrier and a law firm “from away” as we
say here in Maine, or an insurance company and specialty law
firm that operate and practice in your state in front of local
screening panels and courts? With 31 years of experience in the
Maine market, 17 years in New Hampshire and 14 years in Vermont,
Medical Mutual knows the value of cases in the local legal
environment, a fact that can’t be overstated when it comes to
evaluating all aspects of a claim. From my vantage point as a
physician, I’ll take 14, 17 and 31 years of local legal experience
over 100 years of experience from anywhere else.
Aside from experience, the manner in which other companies
approach your case can differ — dramatically. Will decisions on
whether to settle or defend — which have a direct and lasting
impact on your career — be made by business people or by a
Claims Committee, like Medical Mutual’s, comprised of practicing
physicians who know both the care environment and the
standards of care?
Leave the fight or settle question to business people and you’re
likely to get an answer based on a cost-benefit analysis as it pertains
to the company’s bottom line. It may make the quarterly financials
look better, but you could end up living with a successful claim
against you for the rest of your career. Explain that to your next
prospective employer. On the other hand, when you are covered by
a company like Medical Mutual, you have the commitment from
the physicians on the Claims Committee that if the care was appropriate,
we’ll fight your case to uphold your reputation.
Dispelling The Commodity Myth
How can some medical professional liability insurers charge rates
that are in some instances 20–25 percent below others in the
market? The answer is one that, for anyone who takes the time to
actually examine policies, clearly dispels the myth that medical
professional liability insurance is a commodity. The essential definition
of a commodity is that competitive products are the same.
But the reality in medical professional liability insurance is that
policies and coverages are anything but the same. They all differ
— often in very significant ways.
For example, some competitors’ policies make doctors in a
group or at a hospital share coverage limits, while with Medical
Mutual, each physician has his or her own limit. With shared limits, one significant claim could put your whole group or hospital
in serious jeopardy.
Consider, too, that many of these insurers in essence charge
you for your defense by applying defense costs — not just damages,
but also lawyer and expert witness fees and the like — to
your coverage limits. So your true coverage limits are reduced.
Not so with Medical Mutual. Medical Mutual policies are specifically
written with defense costs outside the limits of liability. So
unlike others, if your per-occurrence liability limit is $1 million,
you get the full million dollars of coverage.
And these are but two of the many differences in policies that
can lead to differences in premium prices — and substantial gaps
in coverage.
The Underwriting-Dividend Connection
Some would have you think that dividends are a gimmick. But in
reality, they are a benefit of sound underwriting. The payment of dividends
is in large part a function of a company like Medical Mutual
having charged actuarially-indicated rates, then experiencing lower
than expected losses over a finite time period. In such cases, Medical
Mutual, as it has in recent years, declares a dividend and shares its
success with its policyholders. But don’t expect other companies
to share such success with you after a good year. Because the fact is,
no other medical professional liability insurer in Maine, New Hampshire
or Vermont has ever paid a dividend in Northern New England.
That’s in good times. So what if you experience a claim?
According to the Duke University Journal of Health, Politics and
Law, almost 1 in 5 physicians will be sued in any given year. And
Young Physician magazine states if you perform any type of surgery,
the probability that you will be sued at some point in your
career is almost 100 percent. Then what? There’s a good chance
you will lose your protection altogether, as many carriers have
shown a propensity to drop individuals, practice locations or even
entire specialties when a claim or claims threaten profitability.
Does that sound like good protection?
When the Market Shifts, Who Will Your Carrier Protect?
Finally, market shifts — dramatic turning points that are common
in the volatile medical professional liability insurance business —
are another important factor when it comes to your protection. It’s
common for regulations to change, claims in general to rise sharply
or financial markets to suffer in a way that hurts the economics of
writing insurance coverage. In such cases, there are many examples
of companies simply closing shop and leaving a state. That’s the
ultimate protection — of corporate profits. In the meantime,
you’re left without protection of any kind and must try to secure
coverage under difficult market conditions.
In short, for some carriers, serving a market is a question of
opportunity and protecting profitability. For a company like Medical
Mutual, on the other hand, it’s about protecting the care environment,
as well as your assets and reputation, year in, year out.
Getting The Protection You Deserve
So, do you deserve the best protection? If you believe you do, say
so — to your partners, to your practice or business manager, or to
your administrators. The policy may or may not belong to you.
But in the event of a claim, it’s your reputation and your livelihood
that are put at risk. And that’s not when you want to answer
the question of what kind of protection you deserve.