Insuring Healthcare Professionals
By John LempPublished May 1, 2013With the passage of the Patient Protection and Affordable Care Act (PPACA) in March 2010, the widely criticized and flawed US healthcare system commenced a process of undergoing significant, progressive reforms. However, the PPACA entirely neglects a major portion of the medical and healthcare industry--medical malpractice and professional liability. Medical malpractice almost always results in expensive litigation, and doctors are forced to practice a type of defensive medicine in which they might not be able to take certain risks when diagnosing and treating patients that could have potentially provided them with a more accurate diagnosis and better treatment. While PPACA’s omission of medical malpractice and professional liability reform certainly poses problems for the healthcare industry, these problems can be remedied in an effective way that also offers a private sector solution--the purchase of allied healthcare and medical malpractice professional liability insurance.
Allied healthcare and medical malpractice professional liability coverage is a rapidly growing aspect of the insurance industry, providing liability coverage to all types of healthcare businesses and facilities such as hospitals, clinics, fitness centers, spas, beauty salons, and psychiatric and mental health centers. While high premium expenses frequently accompany this type of insurance coverage, it is definitely well worth it for medical practices and healthcare businesses to include in their insurance portfolio. In the event of a claim, the insurance provider will pay the damages to the patient, thus protecting the particular hospital or clinic from being taken to court. A claim does, however, consequently raise that business’s future premium rates. Although the thought of paying even higher premiums may cause the hospital or clinic to consider dropping coverage, there is a private sector solution. The allied healthcare and medical malpractice professional liability insurance industry is expanding rapidly, with more insurance provider firms entering the market each year. An increase in the number of insurance providers means greater competition, which in turn would drive down prices and allow more healthcare businesses and medical professionals to shop around for insurance coverage.
Although many medical professionals may be skeptical about the notion of purchasing professional liability insurance coverage, it is definitely needed and well worth it in the end. This type of preventative policy provides healthcare professionals with the peace of mind that potential mistakes will be covered without cumbersome and expensive litigation. I learned a great deal about this type of professional liability coverage and insurance coverage in general last summer while interning as an Underwriting Assistant at Hiscox USA, the American division of Hiscox, Inc., which is one of the world's leading specialty insurers and the premier insurer of professional liability coverage in the United States. Hiscox's Allied Healthcare portfolio includes coverage for almost any medical practice one can think of, ranging from acupuncturists to alcohol and drug rehabilitation centers to ambulance services companies. It is the goal of Hiscox and other insurance providers to protect their clients while establishing a defense mechanism against litigation.
These private sector insurance companies are committed to maintaining the integrity of the medical profession, while ensuring that the healthcare that patients receive allows them to lead active and healthy lifestyles. With that being said, the insurance companies in the private sector charge high premium prices, sometimes tremendously high prices to healthcare providers. While purchasing allied healthcare and medical malpractice professional liability coverage is and will continue to be an expensive purchase for healthcare businesses and medical professionals in the near future, over time, these costs will decrease dramatically, as more insurance companies in the private sector enter this market. This type of coverage protects against the potentially exorbitant losses a doctor or hospital may face in the event of medical malpractice litigation, which frequently runs into the tens of thousands of dollars without a patient even being paid for the damages. These costs associated with medical malpractice lawsuits are passed down to health insurance providers and ultimately to patients. Although the private sector solution of having healthcare businesses and medical professionals purchase allied healthcare and medical malpractice professional liability insurance from private insurance providers is not perfect, it presents a much-needed solution nonetheless.