Naked exposure: a new play has the medical community abuzz about what it means to face a world without medical malpractice coverage. Nationwide, very few doctors practice without it. But you can bet that "going naked" has crossed the minds of just about every doctor in the country

Risk & Insurance, Sept 15, 2004 by Russ Allen

In Going Bare--a play written by Mary Jane Taegel that has been produced in playhouses across the country--Dr. Jack Ramsay, has dropped his insurance coverage to avoid paying what he considers to be outrageous malpractice premiums. But, when he's hit with a frivolous, multimillion-dollar lawsuit, the doctor and his wife conspire to get a divorce that is faked in all but the legal sense and that puts all their assets into her name to protect them from a large settlement.

In the story, which has recently been optioned to a Hollywood producer, all beck breaks loose when a calculating "other woman" believes Jack to be available and the lawyers get wind of his scheme.

While not all doctors may be willing to risk the mayhem that Ramsay does, most are feeling the pressure of insurance costs, and more than a few are saying, "No more."

Estimates are that in a growing number of states, particularly those with high malpractice insurance rates such as Florida, thousands of physicians are "going bare"---dropping their liability insurance and taking their chances without it.

Nobody knows for sure how many doctors are going bare nationwide, but a Wall Street Journal report this year indicated that nearly 20 percent are in this status in such areas as Miami-Dade County, Fla.

"GOING NAKED" STILL A RARITY

"Nationwide, we are probably not talking about more than 1 or 2 percent of physicians," says consultant Dow Walker, chairman of the Health care practice at the insurance brokerage Willis Group. "But doctors are looking hard at the percentage of their practice income that goes to insurance fees. Usually, they can't just increase fees to compensate, because they are tied into payment contracts with third-party payers."

Generally in the United States, doctors need to have insurance. Hospitals usually require that physicians hold a minimum level of coverage in order to have admitting and staff privileges. Doctors need such privileges in order to care for their patients admitted to hospitals.

Hospitals--which also carry their own coverage--know that without this requirement on each doctor practicing in their hallways, their institution itself would be an even bigger target than it already is for malpractice suits. (Some hospitals have begun to release this requirement for some specialists so that they can continue to staff critical services.) In addition, many managed care organizations and states require practitioners to maintain certain levels of malpractice insurance.

When these requirements, or the malpractice judgments against fellow physicians in their specialties, dictate a level of coverage for doctors that they either don't want to pay or feel they can't afford, more of them have chosen to go bare--a term also used in the workers' comp, nursing-home, and other insurance arenas.

The strategy is sometimes referred to as "self-insuring," a misnomer simply meaning that doctors are personally responsible for legal fees and any judgments or settlements if sued.

Several thousand physicians have gone bare in Florida, a state known for some of the highest malpractice insurance rates in the nation and for its activist doctors. Physicians taking this step in Florida must prove to the state that they have $250,000 in assets that could be accessed for any claim against them. They must also alert their patients to their lack of coverage. Florida does, however, permit these doctors to protect their homes, retirement plans, annuities, life insurance, and salaries from legal judgment.

"In other cases, doctors are also turning to risk retention groups, where they get together with other physicians to pool their risk," notes Chuck Moran, a spokesperson for the Pennsylvania Medical Society, whose members experience a combination of high insurance rates and a state insurance requirement that has caused them to cry for relief.

In Florida, Pennsylvania, Texas and other states where the insurance crunch is greatest, doctors have also limited what hospital services they are willing to work on or what procedures they are willing to perform. They also have chosen not to increase the limits of their policies to needed levels. Nor have they switched out of needed specialties, moved to another state, retired early, or simply left the practice of medicine.

DOCTORS OVERREACTING

But are doctors making too much of the issue? Certainly medical liability is a major factor affecting the entire health care industry. And in fact, the American Medical Association has recently dropped any standing recommendations against physicians going bare.

"As a doctor, sooner or later you say, 'I'm not making enough money doing this.' And the question is what does it do to the attractiveness of the medical profession in general. Will it take the best and brightest out of that field?" asks Walker.

Luzette Mariner, a spokeswoman for the Florida Medical Association, which represents MDs and DOs, says, "Going bare is not a decision that physicians do out of desire but because they have to."

In the AP story that ran nationally in June of this year, Dr. Alan Routman, an orthopedic surgeon in Broward County, Fla., said of his decision to drop his coverage, "If I really injure somebody and do something wrong, I want them to be compensated for it. But I don't want some crackpot jury to decide that I should lose everything I've worked for my whole life because of it."