Medical malpractice insurance is not a topic that comes readily to mind when you are having a casual conversation with someone. It’s out there in never-never land unless you are a physician, in which case it has more than a little relevance.

Twenty years ago, it made the news almost weekly, when there was a report of a jury awarding many millions of dollars to someone for a medical mistake. There were damages and there were damages, intended to send a message to whomever, that not paying attention was going to be painful. Any lack of focus was going to cost you big time.

Here in 2013 there is a new relevance. There are two new forces at work. One of them is something virtually no individual can influence. The other is one you can influence and that is the type of insurance contract that a practicing physician can own to protect themselves. Let me set the stage to help you better understand these two forces and why they matter.

The force that no one of us can influence results from the changing landscape that is the health care delivery system in these United States. One can argue in favor of or against the Patient Protection and Affordable Care Act (PPACA) or Obamacare, if you prefer, but you cannot deny that it is going to influence how medical care is delivered and paid for in this country in the years ahead.

In Florida, where I live, there are roughly 60,000 licensed physicians, or about 245 per 100,000 of population. As gleaned from the most recent annual report from the Florida Office of Insurance Regulation, premiums paid, or perhaps more accurately, “direct earned premium”, in 2010 was approximately $570M. Direct losses incurred were approximately $140M. Presumably the difference went to expenses, cost of litigation, to build reserves, and profit.

I have neither the capacity nor the ability to influence the outcome at the state or national level. What I do have is the ability and capacity to influence how any given physician in private practice deals with this issue. That’s because I’m affiliated with a group that has invented a better mousetrap.

This new “mousetrap” is a contract between a physician and a regulated, licensed insurance company that provides, as a matter of course, a return of premium equal to 50% of the premiums paid in any given year. How much of that 50% you get to keep is a function of your claims history going forward. No existing commercial medical malpractice insurance company, other than the one I’m talking about, provides this benefit. Period.

Why this is important has to do with the larger force that I referenced earlier. We agree that the health care delivery landscape is changing, and as a result, there is a lot of uncertainty among physicians how these changes are going to influence their financial outcomes in the coming years.

Running a medical business, be it a group practice or small hospital, is always going to be a challenge. From a group perspective, it’s easy to overlook the fact that the participating physician is involved with a business enterprise. A measure of success is whether or not at the end of the fiscal year there is a profit or a loss. Granted, most physicians measure their success by an evaluation of patient outcomes, but that cannot happen in a vacuum, so there is always a corresponding measure that is defined by dollars.

Mindful that some phyisicans pay almost insignificant premiums, there is a category of physicians who pay significant premiums every year. These are the folks whose specialty has historically resulted in claims that juries determined were worth lots of money, and consequently, made large awards. It’s not unusual for a surgeon in Florida to be paying premiums in excess of $50,000 per year, for coverage that limits his or her insurance company to a maximum payout of $250,000. And it doesn’t really matter whether or not you’ve had a claim recently, or never had a claim filed against you.

If you are a physician in private practice, and your annual premium for this coverage is similar to what I just described, and you are faced with uncertainty about the level of revenue that will be flowing to your practice in the next few years, would you be willing to have an exploratory conversation with me to determine how this might make life better for you?

The landscape is littered with salesmen and saleswomen with a story to tell. Sometimes the story is relevant and sometimes it’s not. The target of these folks are very often physicians since such folks demonstrably have higher than average incomes. It’s like Al Capone responded when asked why he robbed banks; it’s because “that’s where the money is!”

For many physicians who practice in a group setting, premiums paid for medical malpractice insurance coverage has become almost an invisible expense. You have to have it, the hospital where you perform most of your surgical procedures demands you provide proof of coverage, and the commercial carriers are virtually indistinguishable from one another, so you assign responsibility for making the decision to “make sure we’re covered” to someone else, so you can get on with the day to day demands of your patients.

I’m trying to get your attention for a few minutes because these few minutes could very well make the difference between a positive financial outcome for you and your medical group and a negative outcome. What I have to offer is a way for you to effectively reduce your cost of medical malpractice insurance converage by 50% every year. And at the end of the day, there are tax advantages, wealth transfer advantages, asset protection opportunities and who knows what other benefits.

I’ve put together a short web video (about seven minutes) that tells the story. Watch it HERE… (you can also click on the image with the title “A Better Way…”