ANNAPOLIS – The newest trend in medical malpractice insurance may be coming to Maryland, as doctors consider dropping insurance altogether to keep their practices afloat amid crippling increases in insurance premiums.
The move, called “going bare,” is a drastic option available to a select few — most hospitals and health insurance agencies force contracted doctors to keep coverage.
Still, the issue has gotten enough attention in the doctors’ community to prompt MedChi, the state physicians’ society, to begin counseling members about the risks and benefits of dropping insurance.
Going bare is one of a few options doctors are considering to deal with increased rate hikes expected this summer. Other solutions include passing surcharges onto patients or using contracts that force patients to go through arbitration rather than suing. But dropping coverage is probably the most controversial.
Medical Mutual, the state’s largest insurer of doctors, could raise rates as much as 40 percent, and GE Medical Protective, another malpractice insurer, has filed with the Maryland Insurance Administration for an increase of 68 percent.
That’s on top of premiums that for obstetrician/gynecologists, whose malpractice insurance rates are among the highest of all doctors, already amount to 19.5 percent of their gross compensation.
“It’s going to get to the point for a number of practices that it is uneconomical to stay in business and pay for insurance. That’s when that option presents itself,” said T. Michael Preston, executive director of MedChi. While the society is educating doctors, it isn’t advocating the move, he added.
Going bare is not just about saving money, but keeping doctors from being a target for lawsuits, said Dr. David Hexter, director of emergency medicine at Union Hospital in Cecil County.
“What the trial lawyers do is look for deep pockets,” said Hexter. “In the case of medical malpractice, if a doctor didn’t have insurance and those deep pockets, they (lawyers) would go elsewhere.”
Union Hospital doctors have requested the hospital’s credentialing committee eliminate insurance requirements, or lower the minimum, now at $1 million of coverage. The board discussed the request, but doesn’t plan to change hospital policy.
If doctors decide to go bare — which is unlikely — patients who sue independent doctors may have a hard time recovering awards, especially if the doctors have incorporated to insulate their assets, said Kevin McCarthy, spokesman for the Maryland Trial Lawyers Association. This could lead to increased taxpayer costs through uncompensated health care expenses, he said.
“The problem is, you cannot escape the consequences of these (malpractice) actions,” said McCarthy. “Someone will have to take care of that injured person, because often they are incapable of taking care of themselves.”
Only nine states in the country have a law mandating doctors to have malpractice insurance. Going bare is legal in Maryland, which also does not require that doctors report information about insurance.
The trend has already caught on in Florida: 3,028 doctors there have foregone insurance, according to the Florida Department of Health.
Going bare involves taking a lot of personal risk in exchange for cost savings. If faced with a judgment they can’t afford, doctors could lose personal assets and be forced to declare bankruptcy, said Preston.
Because of the way the malpractice insurance system works, doctors may also lose what’s called “tail coverage,” a long-term investment toward future lawsuits, said Preston.
If they are sued, doctors who drop insurance are left without the legal expertise provided by insurers.
Since January, practitioners have placed their hope on a legislative solution, which was dashed in the last days of the session this year. But the state’s doctors stand firm with Gov. Robert Ehrlich’s opposition to the medical malpractice reform bill proposed by the House of Delegates, said Preston.
Ehrlich prefers a comprehensive plan with a cap on non-economic damages, while the House opposes the cap, characterizing it as symbolic.
“By the time we got to the end, what we were looking at wasn’t going to do much. Essentially, no bill was better than a bad bill,” said Preston. “We didn’t want to create the impression that the problem was solved, when there was not enough to make a consequential difference.”