Why It’s Vital to Choose a Doctor-Owned Medical Malpractice Insurer
Choosing a medical malpractice insurer involves more than just reviewing the cost of premiums—physicians must consider which insurer has their best interests at heart. Consolidation in the industry has led to shareholder-owned companies acquiring doctor-owned companies and vice-versa. When an acquisition brings a doctor-owned company into the hands of shareholders, physicians have a prime opportunity to ask: Is this the type of insurer I want protecting my reputation?
A doctor-owned company offers benefits—intangible and tangible—that shareholder-owned companies can’t match.
- Doctor-owned companies have an affinity of interests with those they insure. This simply doesn't exist when the insurer is a shareholder-owned company. A doctor-owned company can fight for doctors through legislative advocacy and when a physician is sued without interference from outside influences. On average, physicians will spend more than 10 percent of their careers facing an open, unresolved medical malpractice claim.1 Those protecting physicians at a doctor-owned company know that a claim payment reported to the National Practitioners Data Bank will follow the doctor around for the rest of their life.
- Doctor-owned insurers have only one person to account to: The doctor who holds the policy. On the other hand, investor-owned companies must produce every quarter the predicted earnings per share. Shareholder-owned companies remind their leaders and employees every quarter what the target is, and if they don’t hit that number, their stock price will be adversely affected. While individual employees in shareholder-owned companies may do their best to support insured physicians, overall, the company’s claims resolution process is determined by their ownership structure and their primary obligation to produce earnings for investors.
- Doctor-owned insurers give their members a financial stake in the company. Loyalty programs like The Doctors Company’s Tribute® Plan, which offers a substantial financial award upon retirement, are tangible manifestations of what it means to be an owner. Programs offering annual dividends are another financial benefit that only doctor-owned companies can offer, because shareholder-owned companies are obligated to direct profits to one place and one place only: their shareholders.
- Doctor-owned insurers offer depth of expertise and service. Physicians can see and feel the positive impacts to their practice when they receive best imaginable service. It’s solo and small practices, especially, where the physicians personally interact with the insurer and take advantage of patient safety and risk management programs, but these differences impact practices, regardless of size. Doctor-owned insurers are governed by people who are from the practice of medicine, and when a company is by doctors, for doctors, this impacts not just the handling of claims, but all the ways an insurer caters to the needs of its member doctor.
- Shareholder-owned companies will settle a case when it makes financial sense for them. Attorneys file many malpractice suits with no basis in law—80 percent of claims against our members, for instance, result in no indemnity paid to the plaintiff. Yet for fear of a negative verdict, a publicly traded company may decide to settle, versus defend, even if the doctor wants to defend themselves in court. This is especially true in states with low policy limits and bad-faith laws that work against an insurance company; insurers are worried that if they risk trying a case, they’ll get hit above policy limit, and they may settle rather than risk taking a big verdict. Sadly, it’s the doctor who has to carry those consequences. A doctor-owned company, on the other hand, could take that same case all the way through trial to protect member doctor.
The majority of physicians will face at least one medical malpractice claim in their career, which makes choosing a malpractice insurer one of the most important decisions they will make. Choosing an insurer that is dedicated to defending and protecting their reputation can bring physicians peace of mind and allow them to focus on what they do best—practicing medicine.
- Seabury S, Chandra A, Lakdawalla DN, and Jena AB. On average, physicians spend nearly 11 percent of their 40-year careers with an open, unresolved malpractice claim. Health Affairs 2013;32(1):1-9. doi:10.1377/hlthaff.2012.0967
The guidelines suggested here are not rules, do not constitute legal advice, and do not ensure a successful outcome. The ultimate decision regarding the appropriateness of any treatment must be made by each healthcare provider considering the circumstances of the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.