North Shore system launches doctor retention plan
By Alison Snyder
The North Shore-Long Island Jewish Health System has created a risk retention group to insure private physicians, giving them much-needed relief from rising medical malpractice insurance costs.
By offering insurance to private physicians affiliated with the health system, North Shore-LIJ says it can offer enrolled doctors premiums that are, on average, 17 percent less than rates charged by traditional insurers.
The health system hopes to stem the tide of doctors leaving Long Island, retiring early or scaling back their practices in response to rising rates, said Donn Haber, vice president for risk management at North Shore-LIJ.
The health systemâ€™s risk retention group is a not-for-profit, member-owned insurance provider. Because costs have been reduced, RRGs can offer lower malpractice insurance rates â€œas well as long-term stability in terms of coverage,â€? according to an internal newsletter.
North Shore-LIJ has been looking at alternatives for the past two years, Haber said, because of concerns that the choices physicians are making in response to high rates will cause access-to-care problems for patients.
â€œA good day, for me, is when I would only get one phone call from a physician saying, â€˜I canâ€™t afford [insurance], I have to retire, or I have to leave the state,â€™â€? he said.
Haber said he gets three of those calls per day.
RRGs arenâ€™t regulated in New York, however, causing concern about the ventureâ€™s stability. Edward Amsler, vice president of Medical Liability Mutual Insurance Co., which insures 60 percent of New York physicians, said doctors could be left without insurance if the RRG goes bankrupt.
Participating physicians, he said, wonâ€™t qualify for the state â€œguaranteeâ€? fund that pays for claims should one of the traditional insurers become insolvent. Amsler questioned the RRGâ€™s ability to avoid bankruptcy, comparing the $2.5 million the health system has invested to his company, which has a $250 million surplus.
â€œWhen you go outside of New York State and create a risk retention group in Vermont with limited capital, then youâ€™re just avoiding a system designed for the protection of people inside this state,â€? he said, adding he thinks the costs will ultimately be the same and the health system â€œwould be better off spending that kind of energy helping to solve this problem inside of New York State, as opposed to trying to avoid it.â€?
To Haber, the advantages outweigh the risks. Enrolled doctors will not be affected by the malpractice insurance rate increase expected in July. He also said if the RRG runs into financial trouble, the health system would step in with additional capital.
Steve Goldberg, an internist and cardiologist on the advisory committee for the RRG, said doctors will be able to work with the health system on quality initiatives to improve patient care, and in turn, reduce malpractice insurance rates.
He said doctors are optimistic yet cautious because the RRG differs from standard insurance and isnâ€™t backed by the stateâ€™s guarantee fund.
Thomas Mauri, a system-affiliated orthopedic spine surgeon and president of the 3,000 strong North Shore Physician Organization, said the RRG â€œmight become a viable alternative for me if I canâ€™t afford to stay in practice otherwise.â€?
Doctors who operate on the slimmest margins â€“ including ob/gyns, neurosurgeons and even pediatricians â€“ will be the most likely to opt for RRG coverage, he said.
North Shore-LIJâ€™s move has caught other Long Island hospitalsâ€™ attentions, said Nassau-Suffolk Hospital Council President and chief executive Kevin Dahill. Some are exploring whether this is a system worth considering, he said.
â€œThis is all in the evolutionary stage,â€? Dahill said. â€œBut I think all eyes will be on this.â€?