Kentucky based accounting firm Dean Dorton Allen Ford has teamed up with the Kentucky Hospital Association to conduct a survey of hospitals in that state, the finding was that the local facilities were inuring greater losses than the year before. 58% of the hospitals responding to the small (20 facility) survey reported losses at over $100,000 per employed physician. Although the survey is limited it matches countrywide anecdotal evidence that hospitals are finding wholesale employment of physicians in unprofitable.
This shows that although one of the central pillars of healthcare reform is consolidation of care systems the trend of employing physicians may not be as fruitful as many had hoped. With the market potentially changing doctors should examine their malpractice insurance strategy and the future need for tail insurance.
The market for malpractice insurance is continuing to be competitive and many physicians are looking to take advantage of potential cost savings. However, when purchasing a claims made policy some costs are pushed down the road until you tail them out. With a traditional insurance policy this tail is provided free at retirement, with many doctors and surgeons choosing hospital employment later in their careers this free tail becomes a less likely option.
Tail terms can be pre-negotiated with traditional insurance carriers and many would prefer to offer a lower tail premium later in exchange for signed a new client now. Working with an expert broker can ensure you get the best deal possible. The better you can plan the better costs can be budgeted and saved, contact us today to discuss tail insurance cost savings.