New York Acquisition Benefits Physicians, Hospitals, and Patients

Richard E. Anderson

Bill Fleming is chief operating officer of The Doctors Company, the nation’s largest physician-owned medical malpractice insurer. The following is an interview in which he discusses the recent acquisition of an admitted medical malpractice insurer and a risk management advisory company in New York.

 

 

  • What did The Doctors Company acquire?
  • On July 31, 2019, we completed the purchase of Hospitals Insurance Company (HIC), a New York admitted and licensed insurance company, and FOJP Service Corporation, a New York service organization that provides third-party comprehensive insurance and risk management advisory services to HIC-insured hospitals, including The Mount Sinai Hospital and Beth Israel Medical Center (Mount Sinai), Montefiore Health System (Montefiore), and Maimonides Medical Center (Maimonides). HIC and FOJP served these hospitals, and others, for more than 30 years.
  • What’s the reason for this acquisition?
  • Our mission is to advance, protect, and reward the practice of good medicine. This acquisition represents a major step forward in support of this mission by ensuring that hospitals, physicians, and other providers can deliver the best possible care to patients. It also signals significant progress in our New York market expansion strategy, which we launched in September 2017 following the New York Department of Financial Services’ approval of our manual rate and secondary filings.
  • What changes will this acquisition bring about?
  • This acquisition creates Healthcare Risk Advisors (HRA), a new business unit within the TDC Group. HRA is focused on managing self-insured programs of large healthcare organizations in New York and beyond. Based in New York, HRA is led by Rob Kauffman as president and Noeleen Doelger as chief operating and financial officer. Both were formerly with HIC and FOJP, so they know the self-insurance needs of large healthcare organizations well. This acquisition also increases the number of healthcare providers we now insure to more than 90,000, strengthening our position as the nation’s largest physician-owned medical malpractice insurer. What it does not change is the commitment of our New York employees to support Mount Sinai, Montefiore, and Maimonides and other long-term clients.
  • What does this acquisition say about the self-insurance market?
  • Due to the historically low costs of medical malpractice insurance in recent years, there has been less of an incentive for healthcare organizations to self-insure. However, we suspect that era is drawing to a close. We anticipate that, in the coming years, large healthcare organizations will take on more of their own liability risk and be less motivated to buy commercial medical malpractice insurance, at least down to the level they have in the past. One of the biggest drivers in purchasing HIC was to add to the TDC Group an already successful platform to serve healthcare organizations that choose to have some level of self-insurance.
  • How will this acquisition benefit NY patients?
  • The transaction will improve healthcare for millions of New Yorkers by strengthening the financial position of Mount Sinai, Montefiore, and Maimonides, where the infusion of more than $650 million from the transaction will be leveraged to enhance patient care and make capital improvements that allow these hospitals to better serve their communities. These hospitals remain deeply committed to serving patients in their communities regardless of their ability to pay for the quality care provided. The sale of HIC to The Doctors Company means that the capital trapped in HIC has been transferred to the hospitals and will allow them to focus on what they do best—provide quality healthcare to their communities.
  • How will this acquisition benefit NY physicians?
  • The sale allows us to bring our mission to advance, protect, and reward the practice of good medicine to an even greater number of healthcare providers in New York. It also strengthens New York’s marketplace for medical malpractice insurance, providing physicians with licensed, sustainable options in a most difficult litigation environment. The Doctors Company was already licensed to operate in New York, and our coverage is open to physicians from all specialties throughout the state. This is important as many physicians have moved to insurers that are not as financially strong and are not subject to the supervision of New York regulators.