Money is certainly not the most important of life’s worries; but even so, I have been known to wring my hands over the fiscal from time to time. Today, I have the greenback blues.
Anyone who has read a few medical blogs has heard at least one doctor bellyache about malpractice. Some doctors seethe over it all day long, and it doesn’t take much to get them bubbling about it. Malpractice is a great divide between patients and doctors. No patient has ever been sued for malpractice, and some patients have been hurt by doctors. So many laypeople don’t see what the big deal is. Doctors, on the other hand, have been harassed, abused, and intimidated by the legal system. For them, medmal is the worst thing in the world.
My own taste of medmal came to me via registered mail this week. I think of it as one last kick in the face from Hurricane Katrina. No, it wasn’t a lawsuit. It was the next best thing – an insurance premium.
When I was in New Orleans, I got my malpractice insurance through a company called Lammico. Like all malpractice insurance plans I am aware of, the policy only covers my medical activity in the state of Louisiana. If I practice in another state, I have to get another insurance plan. For the last 8 months I have done that, carrying paid-up plans in Mississippi and Louisiana.
My current Louisiana plan is paid on an annual basis, the last time on July 1 of last year. That meant my current term was set to expire on July 1 of this year. Since I do not plan to practice in the state of Louisiana at least in the short term, I have to purchase something called tail coverage. A tail policy involves a final lump-sum payment to close out my plan and to indemnify me against any straggling lawsuit that may be filed in the future by a patient I treated when I was in Louisiana.
Tail coverage is the direct result of the statute of limitations: if a doctor injures a patient, the patient has a set length of time, which varies by state and sometimes by specialty, to file a lawsuit. Until the statute of limitations runs out, I remain liable, and have to have insurance protection.
Complicating the statute of limitations is the loophole of discovery. Suppose a doctor misses a medical condition and another doctor uncovers it three years later. In many cases, the limitations clock starts on the day the patient realizes his old doctor made a mistake. The discovery loophole means that a doctor can theoretically be liable for medical errors for years after he or she stops practicing in a particular state.
I had reason to be sanguine about my tail policy. In Louisiana the statute of limitations runs out in one year, and I saw my last patient in Louisiana on August 26, 2005, two days before Katrina. Nearly a year out, nothing new was stirring. With only two months to cover with the tail plus the discovery loophole, I thought my liability risk was rather low at this point. Tail coverage can be expensive, but given my situation, I expected no major problems.
Was I ever wrong. Lammico’s quotation letter laid me out. The premium was twice as much as my usual annual premium. It was as much as a full year’s tuition, room and board, at an Ivy League university.
When I was in Louisiana, I worked for a small medical group. My malpractice was paid out of the corporate account, and expensed against my receipts. This meant I did not pay personal taxes on the premium, and the group could write it off as a business expense. It also allowed me to defray the cost over a whole year. Since my old medical office no longer exists post-Katrina, I am personally on the hook for the entire amount, in post-tax dollars. The organization I work for in Mississippi said they could not help me. I may be able to get a tax deduction for this, but this means having to wait for next year’s refund check.
There are other complicating factors. First, Lammico is the only malpractice insurer left writing policies in Louisiana. I either take their offer or get nothing at all. No negotiations, no deals. Second, while I can afford this, after losing everything I own in Hurricane Katrina and having to replace it, I am a little bit cash poor. I can empty out my savings account, but that savings account saved our souls when Hurricane Katrina hit. I don’t ever want to face a personal calamity without ready cash – if we hadn’t had that money to keep us going, my family and I could have ended up on the network news in a Red Cross shelter with so many other New Orleanians.
Of course, Lammico, to which I have been a good customer for 4 years, doesn’t give a crap. I quote directly from their letter, which I received on June 11:
One check is required made payable to LAMMICO for the respective amounts shown above . . . . You have until July 2, 2006 to exercise your option.
If we do not receive payment by July 2, 2006, we will assume that you chose not to purchase tail coverage. This is your only notice to purchase tail coverage.
So let me rephrase: We want one check for the full egregious amount. You have 3 weeks to get it on our desk. If not, screw you.
What does that sound like? A ransom note? A loan shark? The IRS? Why do I feel like I am being mugged?
My wife and I have discussed this at length and decided that forgoing the coverage is not an option. Because my old medical corporation is defunct, I am personally liable for all lawsuits brought against me from my former patients. Ten months out, I know of no patient that would do this to me, but we have already lost one house in the last year, and to lose another one through lawsuit and bankruptcy is unthinkable. The worst part about going without is that, since lawsuits can cost tens of thousands or even hundreds of thousands to defend, I could win a case brought against me and still lose my house in the process.
Lammico has me over a barrel. Like I said, mugged.
This whole event has me bothered, and it is unlike me to be so concerned about money. We were lucky to escape Katrina with our lives, so this matter in some ways is trivial. I will find the money.
What troubles me about it is the waste. I had, and paid for, malpractice insurance every day I was in Louisiana. I have, and am paying for, malpractice insurance every day I am in Mississippi. This extortion payment is nothing more than a subsidy to the medical malpractice system. I am spending the cash equivalent of a luxury automobile or a year at Cornell so patients I have not seen in a year and will probably never see again will retain the Almighty-God-blessed constitutional right to sue me now and for the foreseeable future.
It makes me sick, and drains away my enthusiasm for practicing medicine. However, there is no reason for my patients to worry – a financial shot like this every so often keeps me in debt and keeps me working.