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This is from the ACP website.
http://www.acponline.org/journals/news/apr02/malpractice.htm
Do you dare to 'go bare'?
It's not a strategy for the faint of heart, and it has troubling implications for patients who are legitimately injured. But going bare?not carrying malpractice insurance?is a tactic that Florida's highest-risk specialists have used for years. In the current premium crisis, even internists are being tempted.
In Florida's last liability crisis in the mid-80s, the legislature passed a statute allowing physicians with hospital privileges to forgo coverage as long as they could pay a $250,000 judgment within 60 days. (The level of responsibility for physicians who don't admit is $100,000.)
Florida is highly unusual in extending that exemption to physicians with hospital privileges. The state is even more unique in that hospitals and HMOs have quietly stopped requiring insurance coverage for neurosurgeons, orthopedists and obstetricians. In some parts of the state, virtually all neurosurgeons are not covered.
One of them is Amos W. Stoll, MD, a neurosurgeon in Ft. Lauderdale. He first went bare in 1987, when a $250,000 annual policy would have cost him $100,000. (That same policy today, he said, would cost between $140,000 and $200,000.)
"Since then, I've spent a fair amount out of pocket on defense costs and made two settlements," Dr. Stoll said. "But I've still saved a lot over what I would have paid in premiums."
The catch, if he gets hit with a sizeable judgment, is that "I'd have to go bankrupt," Dr. Stoll explained. "The strategy is simple and quite effective: The plaintiff doesn't seek more than you're willing to settle for because he knows he won't get it under the state's bankruptcy provisions."
With the nation's most liberal asset protection laws, Florida allows you to keep a house, a pension fund, life insurance policies and annuities?all with unlimited value?safe from creditors in bankruptcy proceedings.
The risky strategy is not right for everyone. Sandeep Jain, MD, a Ft. Lauderdale pulmonologist, for example, said he isn't ready to go without insurance. He can still afford his premiums, he said, although they doubled this year to $30,000. And "going bare doesn't help patients as much as being insured does," he explained.
Marc Singer, a financial planner with Singer Xenos Wealth Management in Coral Gables and one of the architects of the strategy, agreed with that assessment. "We have a lose-lose situation here," he said. In the event of a judgment against a physician who has no insurance or assets, he confirmed, an injured patient may collect nothing.
"Is that fair to a patient, especially if the doctor has truly been at fault? Absolutely not," he said. "But it's also not fair for a physician who may have saved thousands of lives to have no house or retirement because he couldn't pay exorbitant premiums."
The solution is not to stop going bare, Mr. Singer added, but to achieve meaningful tort reform. Such legislation would make adequate coverage affordable for physicians so that patients can be protected.
While physicians like Dr. Jain may balk at the idea of going bare, most physicians in Florida are underinsured as a defense against suits. (In Florida, physicians are required to carry only $250,000 in coverage. In Pennsylvania, by contrast, physicians must be insured for $1.2 million through the state's catastrophic fund.)
The thinking behind having smaller coverage is simple: "If you carry more insurance, you become a fatter target in a lawsuit," Dr. Jain explained. "If six doctors are sued and you have the biggest policy, you're the one they'll go after."
Hospitals and managed care companies in the state are being pressured to relax coverage requirements for other specialties. In the meantime, physicians who have gone bare are keeping an eye on the federal Bankruptcy Reform Act of 2001, which would reduce many of the asset protections Florida now extends.
While the bill hasn't had any success in the last two years, "it has us worried," admitted Dr. Stoll, the bare neurosurgeon. "If it passes, it might change our whole strategy."
http://www.acponline.org/journals/news/apr02/malpractice.htm
Do you dare to 'go bare'?
It's not a strategy for the faint of heart, and it has troubling implications for patients who are legitimately injured. But going bare?not carrying malpractice insurance?is a tactic that Florida's highest-risk specialists have used for years. In the current premium crisis, even internists are being tempted.
In Florida's last liability crisis in the mid-80s, the legislature passed a statute allowing physicians with hospital privileges to forgo coverage as long as they could pay a $250,000 judgment within 60 days. (The level of responsibility for physicians who don't admit is $100,000.)
Florida is highly unusual in extending that exemption to physicians with hospital privileges. The state is even more unique in that hospitals and HMOs have quietly stopped requiring insurance coverage for neurosurgeons, orthopedists and obstetricians. In some parts of the state, virtually all neurosurgeons are not covered.
One of them is Amos W. Stoll, MD, a neurosurgeon in Ft. Lauderdale. He first went bare in 1987, when a $250,000 annual policy would have cost him $100,000. (That same policy today, he said, would cost between $140,000 and $200,000.)
"Since then, I've spent a fair amount out of pocket on defense costs and made two settlements," Dr. Stoll said. "But I've still saved a lot over what I would have paid in premiums."
The catch, if he gets hit with a sizeable judgment, is that "I'd have to go bankrupt," Dr. Stoll explained. "The strategy is simple and quite effective: The plaintiff doesn't seek more than you're willing to settle for because he knows he won't get it under the state's bankruptcy provisions."
With the nation's most liberal asset protection laws, Florida allows you to keep a house, a pension fund, life insurance policies and annuities?all with unlimited value?safe from creditors in bankruptcy proceedings.
The risky strategy is not right for everyone. Sandeep Jain, MD, a Ft. Lauderdale pulmonologist, for example, said he isn't ready to go without insurance. He can still afford his premiums, he said, although they doubled this year to $30,000. And "going bare doesn't help patients as much as being insured does," he explained.
Marc Singer, a financial planner with Singer Xenos Wealth Management in Coral Gables and one of the architects of the strategy, agreed with that assessment. "We have a lose-lose situation here," he said. In the event of a judgment against a physician who has no insurance or assets, he confirmed, an injured patient may collect nothing.
"Is that fair to a patient, especially if the doctor has truly been at fault? Absolutely not," he said. "But it's also not fair for a physician who may have saved thousands of lives to have no house or retirement because he couldn't pay exorbitant premiums."
The solution is not to stop going bare, Mr. Singer added, but to achieve meaningful tort reform. Such legislation would make adequate coverage affordable for physicians so that patients can be protected.
While physicians like Dr. Jain may balk at the idea of going bare, most physicians in Florida are underinsured as a defense against suits. (In Florida, physicians are required to carry only $250,000 in coverage. In Pennsylvania, by contrast, physicians must be insured for $1.2 million through the state's catastrophic fund.)
The thinking behind having smaller coverage is simple: "If you carry more insurance, you become a fatter target in a lawsuit," Dr. Jain explained. "If six doctors are sued and you have the biggest policy, you're the one they'll go after."
Hospitals and managed care companies in the state are being pressured to relax coverage requirements for other specialties. In the meantime, physicians who have gone bare are keeping an eye on the federal Bankruptcy Reform Act of 2001, which would reduce many of the asset protections Florida now extends.
While the bill hasn't had any success in the last two years, "it has us worried," admitted Dr. Stoll, the bare neurosurgeon. "If it passes, it might change our whole strategy."
