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BayCare moves into malpractice coverage
By KRIS HUNDLEY, Times Staff Writer
Hundreds of doctors in the Tampa Bay area, facing a crisis in the affordability and availability of malpractice insurance, soon may be able to get coverage through the hospital where they practice. BayCare Health System, the largest hospital network in the area, will formalize in January an unusual program that has been evolving over the past month. The network's in-house medical liability insurance, previously open only to hospital-based doctors such as emergency room physicians, will offer policies to doctors in private practice who have privileges to practice in BayCare's hospitals. So far, the coverage has been extended to about 100 primary care physicians and specialists in the area, as well as 150 hospital-based doctors. Hospital officials say those numbers could double over the next year. The only requirements: that the doctor be affiliated with one of BayCare's seven hospitals, have difficulty finding affordable malpractice insurance through traditional carriers and provide a critical service to the community. BayCare's move into malpractice coverage, one of the first of its kind in the country, is meant to be a short-term, break-even effort that keeps doctors practicing in its hospitals. It's also an effort to fend off pressure from physicians to let them practice without insurance, known as "going bare." "This is for doctors who come to us and say "You gotta help me. I don't want to leave the area and I don't know what to do,"' said Frank Murphy, BayCare's president and chief executive. Running an insurance company, he said, "is obviously not something we do every day. But we had 25 to 40 doctors who couldn't even get coverage. So we had to do something." Hospitals across the country are hearing from physicians who are panicking about malpractice coverage as a January renewal date looms. A June survey by the American Hospital Association found that 38 percent of the nation's hospitals report being told their doctors are having problems obtaining coverage. Some 27 percent of hospitals said doctors relocated or retired because of issues regarding insurance. Another 25 percent said the squeeze in the market was making it difficult to attract doctors to their communities. A spokeswoman for the AHA said a handful of hospitals nationwide are offering malpractice insurance for their doctors. "We really started seeing that in 2001, and the information is mostly anecdotal," said Amy Lee of the AHA. "Hospitals are doing a variety of things to deal with skyrocketing increases." Tami Torres of the Florida Department of Insurance said she has not heard of hospitals venturing into insurance. But if such plans are self-insured, as BayCare's plan would be, the state has little regulatory authority, she said. BayCare's Murphy said his executives visited a hospital system in the Midwest that has been offering liability coverage for several years. He said a handful of other Florida systems are trying something similar. The exact structure of BayCare's insurance program, he said, is being worked out. "It can be based offshore or filed onshore with a front company," Murphy said of possible corporate configurations. "There are so many alternatives, and we're just looking for what works best for the doctor." One thing Murphy is fairly certain of: The BayCare insurance subsidiary will not carry the BayCare name. But as a wholly owned entity of the health system, it will be backed by BayCare's financial clout. "What we're required to do is provide assurance that any claim against a physician could be paid," Murphy said. "What we'll end up doing is taking the creditworthiness of BayCare, plus reinsurance or letters of credit to get it done. We really don't want to take limited patient care money for this. But our board has told us to be open to anything." To keep a lid on potential losses, BayCare's maximum coverage per policy will be the state minimum of $250,000 per claim and $750,000 total. Coverage will be offered for previous acts as well as for the current year. Though premium rates have not yet been established for 2003, Murphy said he's confident BayCare's plan will represent a savings. "Our rates will be in excess of 10 percent lower than commercial rates next year," Murphy said. "We're going to involve physicians in making sure the quality of care is where it's supposed to be. If the doctors will work with us and we focus on exposure areas, we know it will work." Dr. Martha Price, a family practice physician who is on the staff of St. Joseph's Hospital in Tampa, said she's hoping BayCare-backed insurance will replace uncertain and ever-increasing commercial coverage. After her long-time insurer went out of business a year ago, Price said her coverage costs more than tripled. Now the replacement carrier has notified her that it may not renew her policy, even though she has had no claims. "Hopefully BayCare will offer coverage," Price said. "It's either that or I go home." Dr. Harris McIlwain, a specialist in internal medicine and rheumatology in Tampa, said his four-person group also hopes to tap into BayCare's insurance after paying progressively higher malpractice premiums over the past five years. "BayCare is responding the way you'd expect leaders in a community to respond," McIlwain said. "But it's not going to solve the underlying problem, and that problem won't be solved till the public realizes that health care is changing. Good doctors are retiring and good young doctors are avoiding the state." BayCare's Murphy agrees. "We're just putting our finger in the dike," he said of his hospital system's reluctant entry into the insurance business. "There's no way this can be a long-term solution." BayCare hospitals include North Bay in New Port Richey, St. Anthony's in St. Petersburg, Morton Plant in Clearwater, St. Joseph's, St. Joseph's Women's and Tampa Children's in Tampa and South Florida Baptist in Plant City. -- Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.
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From the Times Business report Robert Trigaux
From the AP
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