The often dismaying subject of medical malpractice insurance costs have become less and less avoidable for medical practitioners each and every year across America. With nearly all fifty States making it mandatory law to acquire such insurance, if those applicable haven’t by now, it is vital for them to get educated on the entire matter immediately. Therefore, the intent of this commentary is to dispense with the pleasantries and dive straight into the wealth of information available to us. We shall first briefly examine (in chart format) the actual median costs of professional liability insurance for the various medical professions across the country. The insurance costs vary from State-to-State, region-to-region and whether or not your practice is in a rural or urban area. Have a pen and paper handy because you’re going to be jotting down a note or two before we are finished.
MEDICAL PROFESSION/AVERAGE ANNUAL COSTS FOR MALPRACTICE INSURANCE
- Cardiologist ——————————— $24,000
- Dentists ————————————— $1,600
- Dermatologist ——————————- $10,200
- Emergency/Acute Care practitioners- $20,000
- Gastroenterologists ———————– $13, 000
- General Practitioners ——————— $12,000
- Hospitalists ———————————- $13,800
- Internists ————————————–$13,000
- Neurologists/Neurosurgeons ———– $20,000
- OB/GYN —————————————- $46,000
- Ophthalmologists —————————$12,900
- Pediatricians ———————————$12,000
- Plastic Surgeons —————————– $30,000
- Psychiatrists ———————————- $7,700
- Urologists ————————————- $23,000
Questions and Answers
Now, to spare you from wasting valuable time searching for the answers to some of the most basic questions about legal malpractice insurance, below is a list of common inquiries with straight to the point answers that we hope you can appreciate. You should already know at this point that obtaining this insurance can rescue you from losing your entire livelihood in case of a lawsuit and it is required by law in most States now as well.
- Question: How can malpractice insurance be purchased? Answer: Malpractice/Profession Liability/Legal Malpractice insurance can be commonly procured through one of these three different sources: an insurance broker (who will receive a commission from the premium) representing an insurance company, an independent insurance provider or a physician-owned mutual company.
- Question: How do I choose the malpractice insurance policy that is right for me? Answer: You should do what is necessary to find out all the information you can about the coverage limits and the different kinds of policies available to you. For example: a $1,000,000/$5,000,000 limit will cover up to $1 million on any one single insurance claim and coverage totaling $5 million dollars in any one given year. Also, you should seek the prevailing limits that are based on the geographical area you are in as well as the specific insurance that covers the special medical practice you are in.
- Question: How much malpractice insurance do I even need? Answer: You will need to analyze what your insurance needs are based on your medical specialty, your income, your willingness to take risks, the personal assets that you have and the cost of the premiums you will pay. If you are in the lower-risk group then you should purchase the minimum amount of insurance that is required in your State. If you have an abundant income then you might consider buying as much insurance you can possibly afford. It’s far better to have it and not need it than to need it and not have it.
- Question: What are the obligations I must adhere to under my insurance policy? Answer: Insurance policies have listed conditions that must be strictly followed by the insured party. Any failures to meet these specific conditions will be considered an automatic breach of your agreement and can result in the termination of your insurance contract by the carrier you have chosen. A few of the conditions that are commonly included in a malpractice agreement are:
- The insured party must pay the premium
- The insured party must notify the insurance company of any practice changes
- The insured party must notify the insurance company of any claims that are defined in the policy
- The insured party must assist in the defense of a claim and cooperate with the insurance carrier
- Question: How do I know if I can trust my insurance company and what else should I know about them? Answer: The easiest answer is research. Find out all the information you can about an insurance carrier. If you already have an insurance company in mind, then you might try going to check “AM Best” or other resources that will give you statistics about the company you are interested in. Check for company viability and any complaints filed against the company. Is the company willing to fight on your behalf on a claim with the most precarious attention, or will they just look to put a quick and cheap resolve to it? In addition, if you have decided to go with a company, then find out what other benefits you might be able to get from them besides insurance. Accept a company that walks straight down the line and gets the job done right. You may also be able to find discounts by combining insurance products with your malpractice policy.
HOW MEDICAL MALPRACTICE RATES ARE CALCULATED
When mandatory spending rates are mentioned, a natural reaction is to put in mind the ones who are responsible for deciding and settling them. The cost of malpractice insurance rates is approved by the insurance commissioner in each State. Continuing from there, other factors will come into play such as the geographic location and the physician’s field specialty. It can be readily assumed that a physician who practices in an urban area will be expected to pay a higher insurance rate than one in a rural community. The insurance carriers will always take careful notice of any personal claims history that you may have in order to get closer to finalizing their decision on your rate.
As well, a medical field that has higher risks of having claims filed against them (such as plastic surgery) will pay an increased rate rather than those of a field at a lower risk (such as dentistry). Obviously, it’s easier and less of a risk to fix a damaged tooth than an injured face.
Some other factors that have a negative influence on the hopes of declining rates is the fewer insurance carriers on the market. In turn, this lessens the competition between insurance companies on their premiums. A lack of income from the investments on medical insurance providers’ reserves will then bring damaging effects. Ideally as well, when the growth in the size of insurance carrier payouts to patients begins to increase, rates will also fall in line and rise as well.
FURTHER DISCUSSION ON MALPRACTICE AND MEDICAL COSTS
OB/GYN practitioners are becoming fewer and fewer in high-rate states such as Nevada and Florida where malpractice insurance can quickly climb as high as $150,000 – $200,000 annually. A huge factor behind this is the state laws which allow parents of the children born to mothers who were once OB/BYN patients to file malpractice lawsuits all the way up until the age of 18. The common result of such crushing insurance rates is for OB/GYN physicians to leave or avoid setting up practices within these States.
Dental malpractice insurance rates are now in jeopardy as well. Cases filed against dentists are certainly on the rise as unsatisfied patients of dental implants are the primary cause. One only needs to understand insurance rates to envision where this will all eventually lead.
On the subject of medical costs, what many do not realize is that there are more than a few ways that physicians can attain premium discounts on their malpractice insurance policies. Most often than not, physicians combine policies to achieve significant discounts. Without this knowledge, one would automatically assume that increased insurance rates would drive up the price of a doctor’s visit. As this may more often be the case than not, further research findings have concluded that several circumstances exist where medical physicians pay a lot less in malpractice insurance premiums than they claim.
So, what can we conclude from all of this? Greed is around us in abundance and as much as society would like to believe that all physicians are honest and trusting individuals, it’s simply a false assumption. Word of mouth is the best form of marketing and the absolute best way to find good, quality, healthcare providers. Who do the people you know actually trust? Is there any way to research a doctor’s practice history without crossing the line? If so, then tread lightly and do all things respectfully for those in the medical field. So many times, high malpractice insurance drive higher prices at the Doctor’s office. If you’re a doctor, or thinking about becoming one, be sure to shop around for your insurance.
Competition and insurance companies want to earn your business and will offer you the very best prices. If you maintain a clean practice, you should be able to achieve lower rates over time.