More MDs insured by hospital programs — Risk management practices being standardized
Aon Risk Solutions' Hospital and Physician Professional Liability Benchmark Analysis, which has been reported for 14 years, is generally aimed at a hospital risk management audience. However, the data has become much more relevant for physicians in recent years, says Erik Johnson, FCAS, MAAA, Aon Global Risk Consulting's assistant director and actuary.
One reason is that many physicians are moving out of the individual malpractice insurance market because they're being covered by the hospital's plan instead. According to Aon's 2013 analysis, 70% of hospitals employ a large number of physicians and use their own self-insurance vehicles to insure them.
"When physicians move into the hospital's insurance, the hospitals try to improve the uniformity of their risk management practices across their organization, including physician offices, to improve claim results," says Johnson.
Increasingly, risk management approaches used by physicians are being influenced by hospitals, due to the physicians being insured by the hospital's program. "Therefore, they have a very direct link in the claim outcomes of their employed doctor," says Johnson.
Hospitals are hoping to save costs by jointly defending malpractice claims, instead of having separate opposing counsel for the physician defendants and the hospital. That approach might save on defense costs and also might improve outcomes because there is no "infighting" among defendants, says Johnson.
"There is some evidence that the cost of risk does seem to be lower for the combined group," he notes. "In general, the costs related to named physicians are decreasing; and in some cases, we believe, shifting to the hospitals."