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Other states can learn from Pennsylvania’s physician-driven malpractice insurance

September 30, 2007
By Lewis S. Sharps, M.D., President, Positive Physicians Insurance Exchange

New York’s health care industry is at a crossroads. The 14 percent increase in medical malpractice insurance rates, the largest rate increase in a decade, means Gov. Spitzer is facing the early stages of a medical malpractice market failure similar to that which Pennsylvania Gov. Edward Rendell faced in 2003.

Physicians and the New York Department of insurance may not fully understand the potential shockwaves that this increase may presage and perhaps should look to the Pennsylvania experience for a solution to its looming crisis. Rising costs stemming from the increase of malpractice claims created a dangerous ripple effect across Pennsylvania: Several major medical liability insurers went out of business, limiting the options for doctors. Access to care was threatened by prohibitive malpractice premiums which forced many specialty doctors, and practices to close or relocate to different states, leaving trauma centers struggling and jeopardizing patient care.

Out of this chaos we created the first physician-driven medical malpractice company in Pennsylvania. Our company set its focus on risk management as a mechanism for survival in one the country’s most litigious states.

Our insurance company’s philosophy and integrated risk management model is something that New York should seriously consider supporting.

Risks are inherent in any surgical procedure. And no one understands these risks better than the surgeons themselves. Surgery--of any kind--requires skill, attention to detail, and a commitment to the best possible patient outcome. These requirements are what physicians train for years to master.

In today’s climate, risk management and loss prevention are critical. More than ever, the health care industry struggles to improve quality of care. Unfunded regulatory mandates, staffing shortages and budgetary concerns impose serious pressures on the delivery of quality health care.

Formal risk management models work relatively well in hospitals and in-patient settings, but what about on an outpatient basis? Shouldn’t risk management programs also help private practice physicians and their office staff recognize potential risks and take preemptive action to prevent or control them? By the same token, doesn’t it make sense that physicians when faced by a potential claim situation, have an integrated risk model whereby there is direct communication with the third party administrators, medical review boards, and if necessary, the defense team.?

Hampered by an inability to be more responsive to the increasing demands for safety and accountability imposed on the U.S. health care system, the standard risk management approach was in dire straights. One approach to reducing the risk and potential for malpractice lawsuits is our integrated risk management plan which creates layers of support for physicians by enhancing patient satisfaction and thereby reducing the risk of litigation.

Our physician-driven malpractice insurance risk prevention program is a strategic, systems-based model that incorporates a fully integrated system of risk management and quality control. This strategic business model takes an aggressive team approach to risk management, with the goal of helping physicians and their office staff recognize potential risks or adverse events early on and take preemptive action to prevent or control them.

This structure involves physicians directly, empowering them and giving them access to experienced insurance professionals, experts in risk management, and a medical review board made up of their peers.

A direct interface between physicians, third-party administrators, and the medical review board can decrease the frequency and severity of litigation and address patient and/or physician needs with positive solutions that allow for consistent rates and optimal coverage.

In addition, proactive risk management activities help reduce costs by decreasing the frequency of suits.  I strongly believe that this model by default enhances quality of care. We have personally witnessed the success of this integrated system. Physician-driven carriers are committed to the needs of physician policyholders; as such, there is an unparalleled level of care and concern for the policyholders and their patients.

An integrated risk management approach fosters a working culture that values learning, innovation, responsible risk taking, and continuous improvement, critical elements to a successful practice.

By involving the right people--those who are on the front lines and who live and practice with the outcomes of their policies--this model provides stability and allows policyholders the peace of mind they need to grow and develop their practices.

Bringing together physicians with similar philosophies of quality patient care and safety under one insurance and risk management strategy is an idea whose time has come.

Dr. Lewis S. Sharps is president of Positive Physicians Insurance Exchange ( Headquartered in Paoli, Pennsylvania, PPIX is the first physician driven medical malpractice company in Pennsylvania. PPIX is a domiciled reciprocal insurance exchange, whose mission is to provide a stable, long-term physician-driven resource to control medical malpractice insurance.

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