What You Can Do About Malpractice Insurance

By David E. Marcinko, MBA, CFP
Additionally, liability data from the several closed panel capitated reimbursement systems suggests support for the stability trend. As interesting as this may be, staff model HMOs, which are a shrinking type of delivery option, are not necessarily reflective of other vertically integrated and at-risk delivery systems more prevalent in the emerging healthcare marketplace. Final Thoughts In conclusion, one can emphasize the following points to support reduced professional liability costs in an ever-evolving reimbursement system. • Understand the local medical malpractice market environment and your position in that environment. • Ensure clarity on how the medical service payment is being provided and who is providing it. Also stay on top of the payment mix, percentages and trends. • Don’t accept quoted liability rates as the only possible option since further comparisons, evaluations and alternatives may be available. • Implement a data tracking system with risk management and risk education. This should feature specific data for each medical speciality. • Be familiar with the concept of clash coverage or multiple coverage for a given exposure incident. A single policy covering all entities is always less expensive than multiple policies covering multiple entities. • Note the dissemination of risk and the transfer of professional liability to corporate medicine (i.e., PPMCs, IPAs) enterprise systems and managed care structures, thereby layering risk and coverage. Indeed, doing nothing to reduce professional liability costs in an increasingly integrated delivery system environment with capitated reimbursement is a guaranteed financial drain on your net income. Dr. Marcinko is a board-certified financial planner who has written a dozen management and finance textbooks for physicians. He is the CEO of www.MedicalBusinessAdvisors.com, a practice management resource center. Dr. Marcinko can be reached at (770) 448-0769 or via e-mail at marcinkoadvisors@msn.com. Editor’s Note: This article was adapted with permission from the third edition of Dr. Marcinko’s book, Financial Planning For Physicians And Healthcare Professionals. The second part of this article will appear in the February 2004 issue of Podiatry Today.

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