MMA Blog

Medical malpractice: How to control cost in a hard market

The hard market is here for medical malpractice insurance. Nuclear judgements against medical groups are happening with more frequency, and underwriters are responding to the rise in losses and their severity.

 

The reality

Recently, medical malpractice insurance costs have spiraled out of control for some medical groups. Some are experiencing 100 – 300% rate hikes, reduced limits or carriers pulling coverage altogether. For these groups, the market can feel particularly hostile. Even more frustrating, to compensate for adverse claims some carriers are also increasing premiums on groups that have a clean, profitable and quality record.

What can help ease cost woes in this unfavorable environment? Practices must be prepared and control the controllables.

 

The controllables

The foundation for controlling your medical malpractice insurance costs begins with strategic planning, active communication with your insurance agent/broker and the insurance carrier, and proactive implementation of risk management best practices. It’s never too early to be thinking about and planning for the renewal period ahead.

With a solid foundation in place, here are six measures that may help control costs and improve your practice management in the long run. If you’ve already implemented these recommendations, it’s important to communicate your efforts with your insurance broker and carrier.

  1. Ramp up the culture of safety: Claims are inevitable, but they can be curtailed with a renewed culture of safety that brings your whole team on board. Your patients will notice your commitment to safety as well.
  2. Document: Most practices are already doing most things right. Now is the time to start documenting it all including:
    1. Patient communications
    2. Safety reporting and accountability that encourages and doesn't penalize employees
    3. Proactive spotting of potential safety issues
    4. Tracking and addressing safety issues to learn and prevent
  3. Optimize risk management: Utilize the carrier’s risk management resources, welcome in-person site visits and be open to learning and implementing recommended safety protocols.
  4. Be prepared to share: Now is not the time to be humble. Share with your insurance broker and carrier your implemented safety and documented strategies. And discuss your practice’s approach to retaining staff to mitigate staffing challenges and shortages.
  5. Understand the competition: Learning how similar medical groups in your area are performing may help your practice know where to focus on training and process improvements.
  6. Build the client-broker relationship: An insurance broker can help evaluate how your practice is performing compared to peers and navigate the market and carrier landscape. Your broker is the practice’s advocate with the carrier. Welcome meetings with your broker to ask questions and report progress. The more they fully understand your practice, the better they can tell your safety story and help curb extreme premium hikes.

Even in a hard market, there are opportunities to ease the burden of rate hikes. By planning and building a foundation of best practices, you can get back in the driver seat, control costs and ultimately build a better practice.

 

 

Andy Tucknott and Travis Davis offer their professional consultation services to practice managers and owners throughout Oregon.

Serving the Northwest, MMA Insurance’s Healthcare Practice offers its expertise to medical practice managers and owners. Brokers guide clients in choosing the carrier that will work best for the practice’s goals and provide the best value, and our partnership goes far beyond that. We consult with clients on the implementation of risk management strategies and advocate on behalf of clients with carriers to help them understand the practice and its performance. MMA’s claims advocacy services support clients experiencing a loss and assist in obtaining fair resolution. Prior to renewal and as a practice changes, we ensure that the best solutions are in place and adjust strategies as needed.

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