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Medical school debt and physician insurance. Some specialties have just wildly high insurance. My wife is an OB and has to pay $140,000/yr per year for tail in

by HEmanZ 3y ago

Medical school debt and physician insurance. Some specialties have just wildly high insurance. My wife is an OB and has to pay $140,000/yr per year for tail insurance in my state. So she literally needs to make, after all other costs of the practice, $140k just to break an even $0/yr. And people wonder why it costs so much to have a baby.

Scoundreller 3y ago
Why is insurance just a flat rate? Shouldn’t it be per procedure or something else better correlated to risk? (Sure, charging precisely for risk would just result in some patients/scenarios being avoided, but per case or a percentage of billing would make much more sense).
- HEmanZ 3y ago
  It isn’t flat, that’s the average of the last two years. It does adjust for a lot of things, like any insurance. It is higher than avg in the state for my wife right now because she is only a few years out of residency. Mid career, she should only expect to pay about $120k/yr…
- devilbunny 3y ago
  Doing more procedures exposes a physician to more risk, but those who do a lot of procedures generally are better at them. I'm an anesthesiologist, but I don't do infants or cardiac cases, and I haven't done them in long enough that I wouldn't want to do them without someone around to get me back in the groove. Someone who does one vaginal delivery a month is not going to be as good at doing them as someone who does two or three a day. And they certainly won't be as good at cesarean sections. Delivering just one baby costs a hell of a lot of money in insurance, which is a major part of why family doctors in rural areas don't do that anymore. By contrast, people who drive more miles - even if they are excellent drivers - are at higher risk of being in a collision because they have to deal with other people on the road, who may be terrible drivers.
FireBeyond 3y ago
If she is still working as an OB, what would be the difference in premium to renew her claims-made policy with prior acts coverage? I can't imagine (but do not know) that it is more efficient to pay claims-made AND tail, versus claims-made with prior acts (unless of course your employer is paying the claims-made). For those not in the medical field, tail or ERP (extended reporting period) coverage is liability coverage for when the original policy has ended - i.e. you were insured for 2024, but in 2025 a malpractice suit comes to you for an incident in 2024. In the auto/general world, this is fairly well accommodated, but in the medical liability world, insurers say it is because of the preponderance of claims that may arrive significantly later than coverage. However, many insurers absolutely ream providers on it. Tail insurance is typically double the actual claim premium, i.e. insurers are saying that your insurance premium is only covering 1/3 of the claims they expect to pay on your behalf. I ... have doubts ... on that number. And I also suspect that there is a bell curve happening where certainly, complex malpractice claims may take time to be built out and filed, and that may extend beyond coverage, but then at a certain point, you can relatively confidently assume that the incoming claims are asymptotically approaching zero. Additionally, I cannot exactly remember if malpractice insurers are required to abide by MLR - profit restrictions - like the 80/20 rule, but in your wife's case, the insurers as a whole (claims-made and tail) are implying that they expect to pay out $168,000 a year for her liability.
- IG_Semmelweiss 3y ago
  her run rate could certainly be 168k .
MisterBastahrd 3y ago
It's also why OBGYNs are fleeing red states and some labor and delivery departments at hospitals (see Bonner General Health in Idaho) are shutting down. Not only is it insanely expensive from an insurance stance to begin with, but when you add the possible malpractice lawsuits from doctors being unsure what their legal standing is on a potentially life threatening issue, many would rather just move to a place where that isn't an overriding concern.
- hn_throwaway_99 3y ago
  > It's also why OBGYNs are fleeing red states and some labor and delivery departments at hospitals I feel like you're conflating 2 separate issues: 1. You are correct, one of the biggest concerns for physicians is malpractice risk, and thus a big draw for physicians (especially in high risk specialties) is states that have low caps on max malpractice damage awards. I'd say there is a tendency of red states to have lower caps, but it's really a mix. E.g. Texas has some of the lowest malpractice caps, while Wyoming has a constitutional provision prohibiting caps. 2. When it comes to the risk of obgyns, the main fear is not really the cost of malpractice, but it's simply that extremely restrictive abortion laws make it impossible to give proper care. Lots of people, and politicians especially, like to see the world in absolute black and white, but obgyns know more than anyone else that there are a whole host of issues that can cause a fetus to be nonviable, or dangerous to the mother, and laws that protect the fetus above all else are not rationale. Obgyns can fall anywhere on the political spectrum just like the populace at large, and there are plenty of conservative obgyns who are against abortion for moral or religious reasons, but they also know the realities of pregnancy and that many of these laws are simply unworkable.
  - MisterBastahrd 3y ago
    You're missing the forest for the trees. It doesn't matter that some states have caps on malpractice payouts. That's only half the matter. It's the number of times that a doctor has to be sued FOR malpractice, because a lot of those costs are going to be attorney fees. If I were a lawyer in Texas, I'd be posting billboards about specializing in suing doctors for not providing care. When women realize they can win a windfall in court for being denied care with life threatening conditions, they're going to start suing. And winning. Juries love giving away insurance company money. More suits, higher premiums. Since that risk is spread across the state, so is the insurance rate. Most conservative OBs still understand, know, and respect the science. If Texas or Idaho or Alabama gets too expensive, especially given how absolutely garbage the standard of living is in those states, they're gonna haul ass political affiliation be damned.
testfoobar 3y ago
The cost of insurance is outrageous because settlements in medical malpractice lawsuits are outrageous. Tort reform is necessary to control medical costs - it is opposed by Democrats in the US. Trial lawyers are an important and generous lobby.
- IG_Semmelweiss 3y ago
  Paretto rears its ugly head as well. 20% of the bad actors are 80% of the lawsuits. There are patients that make a living going around doctor offices and suing them. I know 1 patient in particular that went around suing doctor offices because they would not cater to his blindness. He would threaten a lawsuit without setting a foot in the doctor's office. He would browse the doctor's website and complain it was not blind-compliant. And start from there.
  - erik_seaberg 3y ago
    I once worked on a legal case management database. One of the clients was getting sued over breast implants, and they used the database to catch scammers who sued fifty times (once in each state) over implants they never actually had.
- wolverine876 3y ago
  > The cost of insurance is outrageous because settlements in medical malpractice lawsuits are outrageous. Tort reform is necessary to control medical costs - it is opposed by Democrats in the US. Trial lawyers are an important and generous lobby. Why assume the problem is the legal system and not the doctors? Maybe their performance is the problem. For example, last I saw, hospital error was a leading cause of death in the US. Until recently it was hard to get doctors to wash their hands between patients, or follow checklists to ensure quality. There are stories of an omerta-like rule of silence about surgical errors.
  - IG_Semmelweiss 3y ago
    you can both be right here and in fact its the most likely scenario
IG_Semmelweiss 3y ago
that seems unusually high. I've seen 20+ quotes for doctors in very litigious states, and its not even 1/2 of that cost. Full time doctors. Try shopping around insurance or go with a mutual, or perhaps go with a IPA ? NOTE: This rate is CERTAINLY valid if the OB has a long track record of attracting litigation. All insurers will ask for your "run rate" of claims. So, you can't escape a bad record. If you have a history, insurers will charge accordingly. You can't escape a poor record.
- HEmanZ 3y ago
  Were the quotes from dermatologists, radiologists, and psychiatrists? Or from gen-surge and OB? What state? This is OB in the state of Illinois, it’s roughly the same cost ans all of the other OBs we’ve talked to here. She doesn’t have a litigation history at all yet.
  - IG_Semmelweiss 3y ago
    the quotes were from multiple specialties with high-injury risk / high claim value, down to PCP. I've seen many Northeast, more expensive states quotes, and West coast. I do not know about IL. So if theres some kind of special racket there, i could be ignorant of that. No surgery. No facility /ASC . Straight up MD offices with FT coverage for malpractice.
_fizz_buzz_ 3y ago
But how much does she make? 140k per year if you make 150k is of course not a lot but if she makes 900k or something like that. It's worthwhile. Although I do agree that sounds awfully much for just insurance.
- HEmanZ 3y ago
  About $270k last year. So literally just over half her income.
deleted 3y ago
[deleted]

by HEmanZ 3y ago

Scoundreller 3y ago

Why is insurance just a flat rate? Shouldn’t it be per procedure or something else better correlated to risk? (Sure, charging precisely for risk would just result in some patients/scenarios being avoided, but per case or a percentage of billing would make much more sense).

HEmanZ 3y ago
It isn’t flat, that’s the average of the last two years. It does adjust for a lot of things, like any insurance. It is higher than avg in the state for my wife right now because she is only a few years out of residency. Mid career, she should only expect to pay about $120k/yr…
devilbunny 3y ago
Doing more procedures exposes a physician to more risk, but those who do a lot of procedures generally are better at them. I'm an anesthesiologist, but I don't do infants or cardiac cases, and I haven't done them in long enough that I wouldn't want to do them without someone around to get me back in the groove. Someone who does one vaginal delivery a month is not going to be as good at doing them as someone who does two or three a day. And they certainly won't be as good at cesarean sections. Delivering just one baby costs a hell of a lot of money in insurance, which is a major part of why family doctors in rural areas don't do that anymore. By contrast, people who drive more miles - even if they are excellent drivers - are at higher risk of being in a collision because they have to deal with other people on the road, who may be terrible drivers.

FireBeyond 3y ago

If she is still working as an OB, what would be the difference in premium to renew her claims-made policy with prior acts coverage? I can't imagine (but do not know) that it is more efficient to pay claims-made AND tail, versus claims-made with prior acts (unless of course your employer is paying the claims-made). For those not in the medical field, tail or ERP (extended reporting period) coverage is liability coverage for when the original policy has ended - i.e. you were insured for 2024, but in 2025 a malpractice suit comes to you for an incident in 2024. In the auto/general world, this is fairly well accommodated, but in the medical liability world, insurers say it is because of the preponderance of claims that may arrive significantly later than coverage. However, many insurers absolutely ream providers on it. Tail insurance is typically double the actual claim premium, i.e. insurers are saying that your insurance premium is only covering 1/3 of the claims they expect to pay on your behalf. I ... have doubts ... on that number. And I also suspect that there is a bell curve happening where certainly, complex malpractice claims may take time to be built out and filed, and that may extend beyond coverage, but then at a certain point, you can relatively confidently assume that the incoming claims are asymptotically approaching zero. Additionally, I cannot exactly remember if malpractice insurers are required to abide by MLR - profit restrictions - like the 80/20 rule, but in your wife's case, the insurers as a whole (claims-made and tail) are implying that they expect to pay out $168,000 a year for her liability.

IG_Semmelweiss 3y ago
her run rate could certainly be 168k .

MisterBastahrd 3y ago

It's also why OBGYNs are fleeing red states and some labor and delivery departments at hospitals (see Bonner General Health in Idaho) are shutting down. Not only is it insanely expensive from an insurance stance to begin with, but when you add the possible malpractice lawsuits from doctors being unsure what their legal standing is on a potentially life threatening issue, many would rather just move to a place where that isn't an overriding concern.

hn_throwaway_99 3y ago
> It's also why OBGYNs are fleeing red states and some labor and delivery departments at hospitals I feel like you're conflating 2 separate issues: 1. You are correct, one of the biggest concerns for physicians is malpractice risk, and thus a big draw for physicians (especially in high risk specialties) is states that have low caps on max malpractice damage awards. I'd say there is a tendency of red states to have lower caps, but it's really a mix. E.g. Texas has some of the lowest malpractice caps, while Wyoming has a constitutional provision prohibiting caps. 2. When it comes to the risk of obgyns, the main fear is not really the cost of malpractice, but it's simply that extremely restrictive abortion laws make it impossible to give proper care. Lots of people, and politicians especially, like to see the world in absolute black and white, but obgyns know more than anyone else that there are a whole host of issues that can cause a fetus to be nonviable, or dangerous to the mother, and laws that protect the fetus above all else are not rationale. Obgyns can fall anywhere on the political spectrum just like the populace at large, and there are plenty of conservative obgyns who are against abortion for moral or religious reasons, but they also know the realities of pregnancy and that many of these laws are simply unworkable.
- MisterBastahrd 3y ago
  You're missing the forest for the trees. It doesn't matter that some states have caps on malpractice payouts. That's only half the matter. It's the number of times that a doctor has to be sued FOR malpractice, because a lot of those costs are going to be attorney fees. If I were a lawyer in Texas, I'd be posting billboards about specializing in suing doctors for not providing care. When women realize they can win a windfall in court for being denied care with life threatening conditions, they're going to start suing. And winning. Juries love giving away insurance company money. More suits, higher premiums. Since that risk is spread across the state, so is the insurance rate. Most conservative OBs still understand, know, and respect the science. If Texas or Idaho or Alabama gets too expensive, especially given how absolutely garbage the standard of living is in those states, they're gonna haul ass political affiliation be damned.

testfoobar 3y ago

The cost of insurance is outrageous because settlements in medical malpractice lawsuits are outrageous. Tort reform is necessary to control medical costs - it is opposed by Democrats in the US. Trial lawyers are an important and generous lobby.

IG_Semmelweiss 3y ago
Paretto rears its ugly head as well. 20% of the bad actors are 80% of the lawsuits. There are patients that make a living going around doctor offices and suing them. I know 1 patient in particular that went around suing doctor offices because they would not cater to his blindness. He would threaten a lawsuit without setting a foot in the doctor's office. He would browse the doctor's website and complain it was not blind-compliant. And start from there.
- erik_seaberg 3y ago
  I once worked on a legal case management database. One of the clients was getting sued over breast implants, and they used the database to catch scammers who sued fifty times (once in each state) over implants they never actually had.
wolverine876 3y ago
> The cost of insurance is outrageous because settlements in medical malpractice lawsuits are outrageous. Tort reform is necessary to control medical costs - it is opposed by Democrats in the US. Trial lawyers are an important and generous lobby. Why assume the problem is the legal system and not the doctors? Maybe their performance is the problem. For example, last I saw, hospital error was a leading cause of death in the US. Until recently it was hard to get doctors to wash their hands between patients, or follow checklists to ensure quality. There are stories of an omerta-like rule of silence about surgical errors.
- IG_Semmelweiss 3y ago
  you can both be right here and in fact its the most likely scenario

IG_Semmelweiss 3y ago

that seems unusually high. I've seen 20+ quotes for doctors in very litigious states, and its not even 1/2 of that cost. Full time doctors. Try shopping around insurance or go with a mutual, or perhaps go with a IPA ? NOTE: This rate is CERTAINLY valid if the OB has a long track record of attracting litigation. All insurers will ask for your "run rate" of claims. So, you can't escape a bad record. If you have a history, insurers will charge accordingly. You can't escape a poor record.

HEmanZ 3y ago
Were the quotes from dermatologists, radiologists, and psychiatrists? Or from gen-surge and OB? What state? This is OB in the state of Illinois, it’s roughly the same cost ans all of the other OBs we’ve talked to here. She doesn’t have a litigation history at all yet.
- IG_Semmelweiss 3y ago
  the quotes were from multiple specialties with high-injury risk / high claim value, down to PCP. I've seen many Northeast, more expensive states quotes, and West coast. I do not know about IL. So if theres some kind of special racket there, i could be ignorant of that. No surgery. No facility /ASC . Straight up MD offices with FT coverage for malpractice.

_fizz_buzz_ 3y ago

But how much does she make? 140k per year if you make 150k is of course not a lot but if she makes 900k or something like that. It's worthwhile. Although I do agree that sounds awfully much for just insurance.

HEmanZ 3y ago
About $270k last year. So literally just over half her income.

deleted 3y ago

[deleted]