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Dr. Rene Loyola says he has given up just about everything to keep practicing medicine.
The surgeon owns no home or land, and has no savings other than a retirement plan after 29 years in the profession. He says he frequently has to turn away patients who need his help the most.
Loyola blames all the trouble on soaring malpractice insurance rates that forced him to join the thousands of other doctors nationwide who have dropped their liability coverage.
“On paper, I have nothing. I’m a pauper. My wife owns everything,” said Loyola, who made the changes to protect himself from lawsuits. “It’s a good thing we get along.”
The phenomenon of practicing medicine without insurance, or “going bare,” is most rampant in Florida, where health officials say more than 3,000 of the state’s 89,000 licensed physicians have dropped their coverage.
Doctors say their only other options were to leave the state, or leave the profession.
But critics, including trial lawyers and patient advocates, call the choice irresponsible, arguing that going bare does nothing to solve the insurance crisis or help legitimate victims of wrongdoing.
“You can’t hide all of your assets and you can’t hide all of your wages forever. One way or another, we’ll find a way to represent these medical malpractice victims because they deserve it,” said Alexander Clem, president of the Academy of Florida Trial Lawyers.
Doctors who practice without insurance insist that they sympathize with legitimate victims of malpractice, but they say skyrocketing awards from juries and frivolous claims have ruined the system for everyone.
“If I really injure somebody and do something wrong, I want them to be compensated for it,” said Dr. Alan Routman, an orthopedic surgeon in Broward County who dropped his coverage. “But I don’t want some crackpot jury to decide that I should lose everything I’ve worked for my whole life because of it.”
A jury in one recent case awarded $63 million for a baby born with severe brain damage after a risky forceps delivery in Palm Beach County. The case ultimately was settled for less, and other such awards are often overturned on appeal. Even so, insurance companies say such cases are forcing them out of the malpractice insurance business. Several stopped writing malpractice policies in Florida in recent years, and others have had to obtain more insurance for themselves to help cover large jury awards and settlements.
As a result, rates are soaring to a point of crisis in at least 20 states, according to the American Medical Association. While the AMA cautions doctors against going bare because it creates risks for them and their patients, the group makes no clear recommendation against it.
Several states, such as Massachusetts, Pennsylvania and Colorado, require doctors to have insurance, and most hospitals, even in Florida, require a minimum level of liability coverage. Even doctors who are bare in Florida have to prove to the state that they have $250,000 in assets to cover any claim against them.
“Nobody would elect to practice without insurance if they could help it. It poses a risk to everyone and it just shows how desperate the situation is,” said Dr. Donald J. Palmisano, president of the AMA.
Florida lawmakers tried to repair the malpractice system last year, but neither doctors nor lawyers liked their solution. Both sides now are pushing amendments they hope to ask voters to approve in November. Doctors want to limit attorneys’ fees to rein in frivolous suits and prolonged court fights. Lawyers want to bar doctors from practicing if they’ve had three malpractice judgments against them, and give patients more access to records of doctors’ mistakes.
Until lawmakers fix the soaring insurance rates and set limits on the awards patients and lawyers can reap, doctors say going bare is the only defense against a broken system.
For many, it makes more financial sense.
Routman’s policy last year would have cost $94,835 for $250,000 worth of coverage, even though he’s had no settlements or judgments against him in 18 years of private practice.
“It’s ridiculous to pay that kind of money,” he said. “If you had a $250,000 house and you have to pay $95,000 in windstorm insurance, you wouldn’t pay it. You’d take your chances and hope a hurricane doesn’t hit.”
In comparison, Routman’s brother, an ear, nose and throat specialist in Birmingham, Ala., has $5 million worth of coverage and pays $5,000 a year.
Other doctors, particularly those in high-risk surgical specialties and obstetrics, have no choice but to go bare. Loyola, a general and vascular surgeon, said he was essentially told by insurers that he is uninsurable.
To help defend themselves, doctors are limiting their practices. Some refuse to take emergency room patients because of the complications often involved in treating trauma patients. Others have stopped performing high-risk surgeries.
In Palm Beach County, so many neurosurgeons have stopped treating trauma patients that they have to be transported to neighboring Broward County for care. Similar shortages have been reported across the state.
While doctors blame the trial lawyers and frivolous lawsuits, they acknowledge patients will suffer the most if the system remains broken. Patients can choose to avoid seeing doctors without insurance. All doctors are required to post signs in their offices explaining their lack of coverage and, as an added measure, many ask patients to sign a form to make sure they understand what’s at stake.
Patients who sue a doctor without insurance could receive little or no compensation, and they could meet only frustration when they try for a settlement.
Marc Singer of Singer Xenos Wealth Management has advised more than 1,000 doctors on going bare. He said he tells them to consult with a bankruptcy attorney instead of a defense attorney if a claim is made against them.
Then, settlement negotiations begin at zero and go up; rather than starting with an insurance company’s deep pockets and working down to a lower figure.
“When a doctor has zero insurance and offers $50,000, all of a sudden, that settlement is acceptable,” Singer said. “Lawyers stimulate a lot of litigation. Some of it is legitimate and a lot of it is not. They’re either going to take the more modest settlements or they’re not going to get anything.”
Florida law protects many assets from legal judgments. Singer said doctors can protect their homes, retirement plans, annuities, life insurance and salaries. Anything more could be given to patients who win legal claims.
But many doctors believe going without insurance is a backward way to fix the problems.
“Doctors are going bare to try to avoid lawsuits and to try to protect their assets. They’re not going bare with any idea of how to protect the patient,” said Dr. Gordon Baskin, who specializes in gastroenterology and internal medicine.
He refuses to drop his insurance, which now costs $34,000 a year. A decade ago, he paid about half that amount for four times the coverage.
“The fact is doctors are human, and doctors make mistakes, and when that happens, how are you going to take care of your patient?” Baskin asked. “The only way is if you have the assets and the insurance company behind you.”
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