My name is Richard A Schoor MD FACS, and I am a urologist in solo practice in Long Island. In this day and age, the solo practictioner is the medical equivalent of the eco-survival specialist: without the proper skills, knowledge, and a bit of luck, you can die out here. Like my true survival specialist-alter-ego, Bear Grylls, I have amassed quite a bit of experience in survival, only in the harsh medical landscape rather than the jungle, the desert, or the tundra. While I have not had to eat bugs, snakes, or carrion to survive, I have had to eat a lot a crap!
Today, I will be trying to survive the double digit increases in malpractice insurance liabilty premiums that are facing New York's physicians. Of course New York is not the only state in crisis. Just ask any doctor in Florida, New Jersey, Massachusets, or Pennsylvania and they can tell you that thriving is no longer the goal. Economic survival is the name of the game.
Here's how to survive dramatic rises in liabilty rates.
One, you must budget, budget budget. And not just your office finances, but your personal ones too. You may need to float your business with a personal loan in the case of cash flow disruptions in the office and vice versa. In the office this means being an absolute miser. Negotiate for rock bottom fees with vendors, turn off your lights, disallow overtime, hire part-time employees, hold on to bills as long as long as possible; essentially do more with less. Put off that vacation untill things get better.
Two, you must plan for the future. The rates will go up this July. They will go up more next July, and still more the following one. When it comes to liablity insurance rates in NY, the direction is and has always been one way--up. Knowing this, one can plan an escape. In the time frame of a year, any physician can relocate to another state, join a practice, and start again. You may take a loss on your house, but ultimately you'll come out ahead. Even in states with long lines for licenses, the whole process can be completed in 18 months, tops. You should know financially if your practice can survive this July's increase and even next July's, so realistically you have 24 months to get out of Dodge. When faced with certain demise 3, 4, or 5 years hence, or survival with a calculated risk, take the risk.
Three, look for alternative insurance vehicles. In the last few years, deus-ex-machina has come in the form of RRGs. RRG's, or risk retention groups, are insurance mechanisms that cover businesses of similar risk characteristics when tradional insurance has become too expensive. Congress passed the federal law that allows for these RRGs inthe 1980s and since then many have formed in a variety of industries, including medicine. Anesthesiologists have had successful RRGs for many years and while the rates for anesthesiologist with traditional insurance companies have risen , anesthesiolgy rates have actually dropped for those covered with the RRG. There is an RRG for emergency physicians and even one for orthopedics. A new one, called SCRUBBS, is being formed for urologists. RRGs are under ferderal jurisdiction, rather than state control. As a result, insureds can move about the nation and retain their policies. On the downside, since RRGs are not under state insurance rules, insureds have no protection--zero--when these companies go bankrupt. In other words, switching to an RRG is risky, but survival and calculated risk go hand in hand.
Lastly, do not ask for devine intervention, providence, or the good will of others to protect you. In the wild, it is survival of the fittest. Same thing here. Many people I know have said the following: "they can't let doctors in NY go bankrupt." I say bull. This type of logic has led many people, cultures, even civilzations to their downfalls.
Eight years ago I stood among a bunch of obstetricians before grandrounds and listened to them gripe about their malpractice premiums. At the time, they were asked to pay $90,000. "How could it get any worse?" said one. "Albany will intervene" said another. Now these same docs are paying over 200K per year and Albany has done squat.
Albany can let doctors go bankrupt and they will. No help is coming. You're on your own.
But you have the tools to survive. Stay calm and use them.