Part 3: Texas agent sees future for third-party medical malpractice insurance companies
Editor’s note: Today’s blogpost is the third in a three-part series on how a successful medical malpractice insurance agent views the future of the market and the broker’s role within it. The article it originates from was initially published in the April 2012 issue of Medical Liability Monitor, the industry’s premier source for consistent, reliable coverage and fresh perspectives on medical professional liability insurance and risk management issues.
Looking forward, Couch believes the structure of healthcare reimbursement is going to dictate that physicians align themselves in an ACO fashion.
“Whether you are a physician or a hospital, if you are not participating in an integrated model, you simply will not have the patient flow needed to stay in business. The health insurance companies, Medicare, Medicaid are all going to contract with large integrated networks and bundle their payments for the defined population in your area. It will be a challenge for the independent, small hospital or independent practitioner not in some sort of direct ownership integration or quasi-collaborative-type of arrangement. There is going to have to be some contractual arrangement to be guaranteed a patient flow.”
However, Couch does not see the physician-hospital alignment as the end of physicians being responsible for their own medical liability insurance coverage.
“We will see some significant changes [medical liability system], however historically hospitals have never wanted to be the one assuming the risk of the physician practice. Hospitals will be responsible for employing and managing physicians, but I predict that certain hospital systems will not assume responsibility for their employed-physicians’ liability. Those physicians will continue to use third-party insurers like ProAssurance, Medical Protective and the state mutuals; those various companies will continue to have a place in the industry.
“I would recommend hospitals not put their doctors’ risk in their self-insurance trust or captive. Rather, they should carve that out, segregate that risk, yet still coordinate claims and risk management so there is unified claims handling as well as unified quality and safety programs among the doctors. From the perspective of financing the risk, I think a lot of hospitals will continue to look at the traditional third-party medical liability insurance companies favorably, but the smaller carriers will lose market share and will either go out of business or sell their book to larger companies. I don’t see the big players pulling in their horns. More importantly I see them having an appetite with capital to go out and buy more and more. The merger and acquisition activity with the large physician insurers is pretty robust right now if you are paying attention.