South Pinellas Management

Transcription

1 South Pinellas Management For your Medical Malpractice coverage Focused Expertise in South Pinellas County Specializing in Medical Malpractice Insurance Loyal, Long Term Members Dedicated outside Counsel and Medical Malpractice Expert Professional Liability Insurance for Doctors by Doctors T raditional medical malpractice insurance premiums are the single highest recurring expense of any practice. SPMT eliminates that expense by allowing physicians and medical practices to control the costs normally associated with malpractice coverage. This is done by converting the expense into an investment that will have significant short and long term benefits. South Pinellas Management & South Pinellas Medical Trust Ph I Fx rd Street South St. Petersburg, Florida Current membership is limited to professionals practicing in South Pinellas county eliminate malpractice premiums eliminate premium increases gain control of legal defense extensive asset protection strategies gain significant long-term financial benefits implement a plan that conforms to state and federal laws and regulations that is executed and delivered locally

2 Our Physician Board Officers Specialty President Michael A. Zimmer, M.D. Internal Medicine Chairman Bernard Fishalow, M.D. Orthopedics V. President Eugene Murphy, M.D. General Surgery Treasurer Stephen G. Nelson, M.D. Pediatrics Secretary Stephen C. Anderson, M.D. Radiology Past President Trina Espinola, M.D. Otolaryngology South Pinellas Medical Trust Established 1976 Trustees Warren Abel, M.D. Joseph A. Boulay, M.D. Steven R. Cohen, M.D. Eric Diner, M.D. Juan Escobales, M.D. Edward Fabelo, M.D. Mark Gordon, M.D. David E. Hall, M.D. Specialty Pulmonology Gastroenterology Neurology Urology Family Practice Nephrology Urology Opthalmology

3 So. Pinellas Medical Tr. History Financial Summery T he South Pinellas Medical Trust provides professional liability insurance to more than 300 physicians in southern Pinellas County, Florida. Founded during the professional liability insurance crisis in 1976, the Trust has been in continuous operation ever since 1976 and has saved member physicians millions of dollars. I n 1976, professional liability insurance in Florida was in crisis. No insurance companies were available to write this coverage for physicians, so the legislature passed a law allowing the establishment of medical malpractice trusts. The South Pinellas Medical Trust began with 65 member physicians on January 1, 1976, and quickly grew. Assets at the end of 1976 amounted to $219,000, and more than 100 physicians were members. The Trust currently has over $13 million in assets and almost 300 member physicians. T he Trust charges from 25% to 50% less than most competitors in the state, due to its unique structure and low overhead. In addition, since its founding in 1976 the Trust actually has refunded over $4 million more than it has assessed its members due to claims being less than what was charged.

4 Claims Management T he board of the Trust, consisting of 15 local physicians of varying specialties, selects physicians to be added as members to the Trust based in part on their likelihood to produce claims for the Trust. When claims arise, the board handles them in conjunction with our attorney, Troy Crotts, of the law firm Bush Ross. T he Trust's philosophy is to settle claims quickly if they have merit and where an actual injury has occurred. In situations without basis or frivolous lawsuits, the Trust launches a vigorous defense to protect the physician's reputation. The Trust has primarily used two attorneys since the inception of the Trust, and has prevailed in almost all of cases that have gone to trial.

5 Prior to joining the Trust Very important Trust Administration A ny potential claims should be turned into your current professional liability insurance carrier so that they will be responsible for defending you and paying for that claim if necessary. This will save the Trust from having to pay for known or possible claims. Further, you will not be surcharged on your Trust premium if the other company pays the claim on your behalf, thereby potentially saving you a considerable amount of money!!! A dministrators of the Trust since its inception have been William P. Wallace or Andrew L. Wallace. The current manager of the Trust, Andrew Wallace, is a graduate of Florida State University's College of Business, with a B.S. in Risk Management and Insurance. T he founder of the Trust was Andrew Wallace's father, William P. Wallace, who retired in Andrew Wallace's grandfather, John Wallace, was also in the insurance business in St. Petersburg.

6 Insurance Philosophy T he basis of insurance is that people pool their resources in the event that one of the persons contributing to the fund will suffer a loss in the future. Insurance was started in the 17th century in England at a coffee house that was run by Edward Lloyd. This coffee house, later known as Lloyds of London, started by writing insurance on ships and their cargo. T oday, insurance may be provided by many different vehicles -- an insurance company, insurance mutual, a reciprocal insurer, a mutual company, or a trust. The Trust charges a premium to physicians based on three things: The Physician Specialty The limit of liability Years of retroactive coverage desired A dditionally, member physicians may choose a form of tail coverage -- either a tail that will be provided in the event of death, disability or retirement (after 5 years at any age), or a totally pre-funded tail such that if the doctor leaves the Trust, he or she will have coverage.

7 Rates O ur Trust is able to offer competitively priced insurance to its member physicians due to our underwriting of new members, claims philosophy, and low expenses. The Trust seeks to offer the lowest premium over the long term to all of our members. Part of the reason for the low overhead is there is no middle-man. The Trust is operated by South Pinellas Management Company which sells the policies. Thanks to careful management, the Trust's expenses have averaged less than 12% of premiums paid. This compares favorably to the average expense factor for an insurance company of over 20%. That means that on average at other insurance companies, only 80% of the funds collected are available for the payment of claims. In the case of the Trust, with expenses of less than 12%, more than 88% of premiums collected are available to pay claims or to be returned to member physicians.

8 Coverage Florida T he Trust is structured to self-insure $250,000 for any one patient. Beyond this, limits are offered up to $1-million for each patient, with reinsurance provided by the General Reinsurance Corp, one of the best rated reinsurance companies, with an A++ rating. I ncluded in the Trusts' premium is coverage for most Licensing Agency investigations. T he coverage written by the Trust policy is claims-made coverage, which means we can cover things that occurred before you were a member of the Trust, but have not yet been reported to you as a claim. The Trust provides either fully pre-funded tail coverage or the cost is spread evenly over 5 years at the $250,000 per claim and $750,000 aggregate level. The choice is up to the physician or group which they join. Rates on the tail coverage can change, so the cost could increase and will if a claim is paid on a physician s behalf. Tail coverage above the 250/750 level may be purchased or could be free in the case of death disability or retirement after 5 years of having the excess coverage. Currently in Florida, many companies, trusts, and associations compete for professional liability insurance. Prices vary constantly for professional liability coverage. Currently, these other companies are aggressively seeking to write professional liability insurance, but, may change their minds as they have in the past and either leave the state or increase the premiums so much as to be unaffordable.

9 Pure Local Insurance Local T he Trust provides the purest form of insurance that there is. There is no need for profit to be built into our rates, as all moneys collected by the fund that are not used in the payment of claims or expenses are returned to member physicians. T he Trust works very hard at protecting the doctor's reputation. All claims that are brought against a physician now have to be reported to the Department of Business and Professional Regulation, and claims that are settled by payment have to be reported to the National Practitioner Data Bank. All applications for a hospital, HMO or PPO ask physicians whether they have had any claims. There are also firms that publish books listing doctors who have had lawsuits against them. Consequently, the physicians on our board have great empathy for their fellow physicians and will bend over backwards to help in the defense of their fellow physician's reputation whenever possible. The Trust is also intensely local, operated by physicians for physicians in Pinellas County. While other companies pull in and out of Florida, writing professional liability insurance like they do homeowners insurance, the Trust will be here for physicians as long as the physicians want the Trust to exist for their benefit

10 A Trust, not a Company T he South Pinellas Medical Trust is not an insurance company and is assessable. There are many reasons, however, why member physicians should not be overly concerned about an assessment, and should value that the Trust is not operated as a company: I f we were a company, the Trust would have to make greater payments to the guaranty fund of the State of Florida. This fund bails out insurance companies with financial problems, such as those that suffered tremendous losses in the hurricane. Additionally we would be under dramatically increased regulation if we were a company. The increased accounting costs alone would increase our expenses tremendously. E ach year, the actuarial firm of Madison Consulting reviews the Trust's rates to make sure they are adequate to meet anticipated claims. The actuaries take into account our low expense costs and pass these along to member physicians. Additionally, since we are not seeking a profit, we do not need to add in a profit margin. T he longer a physician belongs to the Trust, the less likely he or she is to be assessed. This is because we apply surpluses in past years to any deficits in later years. Here's how it works:

11 Surcharges Member Introduction Adapting to Change M embers that have had claims paid on their behalf are surcharged if the claim is large relative to premiums paid in. The surcharge system encourages members to avoid claims and to not stay in the Trust if they have multiple paid claims. Any unpaid claim surcharge is added onto the cost of the $250/$750 tail coverage. N ew members are invited to a board of trustees meeting to meet the board and have any questions they have about the Trust answered by a physician board member. At this meeting claims handling is discussed so that in the event a potential claim arises, the new member will know how to handle that situation. T he future of health care in America is certainly changing. For the Trust to continue to be successful, our members must continue to provide the best health care available. It is our desire at the Trust Management Company, to continue to provide superior service to all Trust members in a way that will benefit the individual members and society as a whole.