Human nature tends to dictate “follow the path of least resistance.” As physicians, we are no different, at least in this regard. During 2002, Arkansas physicians had to endure considerable angst and uncertainty when St Paul pulled out of the medical malpractice insurance market. At that time, most states that did not already have a medical malpractice company domiciled in their own state, established one-usually following the single state mutual model. This was accomplished with the help of their respective Medical Societies. Arkansas, for whatever reason, chose not to establish our own in-state company. We chose to go to out of state companies, and at the time I’m sure that seemed the most logical decision, especially considering what limited options were available at the time. The decision to go with an out of state company has provided Arkansas doctors with excellent malpractice coverage from an excellent company, however, there have been several aspects of this decision that now deserve examination.
Personally, I would like to know someone in the company that is entrusted to provide my malpractice coverage.
First, this decision has come with a cost burden being placed on the Arkansas physician. Arkansas physicians, quite frankly, have been overcharged for a number of years for this necessary expense. This claim is supported by numerous out of state companies entering the Arkansas market for these services during the last three years, and record profits of the insurers that were already in Arkansas. Sadly, guess who pays for those profits? You’re right, the Arkansas doctor!
Secondly, being subservient to out of state companies makes us again vulnerable to abandonment, as did occur when St. Paul left. Those companies can, and will, leave our state if they are not profitably providing coverage in our state. Having our own, in-state company, now eliminates that issue from occurring.
Third, as much as 60 to 70 million dollars has left our state each year for malpractice insurance. This financial shift of dollars out of state weakens our economy, not to mention job loss because of “outsourcing of services.” An example of this would be a family living in Jonesboro, Arkansas going to Memphis for their medical care, automobile maintenance, banking and grocery shopping. Those same services are offered in Jonesboro and are provided just as well there as in Memphis.
Fourth, Arkansas has not been as successful as some other states such as Texas, regarding Tort Reform. One of the reasons for this is that out of state companies have not taken aggressive action to implement tort reform legislation in Arkansas.
Ultimately, a physician’s peace of mind and financial security are at stake.
Fifth, do any of us really know anyone in the corporate offices of these other companies? Probably not. Personally, I would like to know someone in the company that is entrusted to provide my malpractice coverage.
Arkansas physicians are so blessed to have the Arkansas Medical Foundation. This organization supports impaired physicians, providing direction, guidance and rehabilitation, so that physician can get his/her life and practice back. Do these out of state companies support this foundation? Most of them do not. Arkansas Mutual recently gave a $10,000 grant to the Foundation. As we grow, these grant dollars will also be increased.
The last point to be made is that from 2002 until 2006, rates in Arkansas increased rather substantially. In fact, they did not start to decline significantly until 2008. So what changed? In 2008, Arkansas Mutual was established. Some people would argue that this is merely a coincidence but somehow I doubt that is the case.
There are, quite simply, numerous facts to consider when making a decision regarding malpractice insurance. That’s why the natural inclination and human nature would try and dictate the physician taking the path of least resistance and staying with their current provider or simply changing to the carrier that provides the cheapest rate. Cheaper, one year only rates, will often lead to much greater cost in the long run, especially in terms of malpractice insurance. Unfortunately, this aspect of a physician’s practice does not involve direct patient care, but is simply too important to ignore. Ultimately a physician’s peace of mind and financial security are at stake.