South Florida Hospital News
Tuesday August 4, 2020

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February 2005 - Volume 1 - Issue 7


Thoughts About Practicing Medicine in Florida Without Malpractice Insurance Coverage

As the number of doctors in Florida practicing without malpractice insurance approaches unofficial estimates of 10,000 out of the approximately 30,000 total active Florida physicians, a number of observations can be made.

First is the obvious: the number of bare doctors is increasing dramatically. The exact number is difficult to ascertain because many doctors practicing bare have not notified the state that their insurance was dropped.

Second, doctors in a wide range of specialties have decided to practice bare, not just high-risk surgeons.

Third, doctors practicing bare seem to be split in two camps; those who are comfortable and may never purchase coverage again and those who would much rather be able to afford coverage and will purchase coverage as soon as they are able to do so.

Fourth, among bare doctors there seems to be a fairly prevalent belief so far that their lack of insurance coverage and implementation of asset protection strategies has reduced the frequency and severity of claims against them. Time will tell if this remains the case as more bare doctors are sued.

Fifth, the plaintiff bar surprisingly has not made examples of any high profile bare doctors by challenging their asset protection plans.

Sixth, many insured doctors are becoming more aware of and concerned about their peers going bare. In some cases insured doctors are changing their referral patterns because of their concern of becoming the "deep pockets" for bare doctors.

Seventh, a bare doctor can purchase malpractice insurance on a first year claims-made basis, which is 65%-70% less than the fifth year and beyond "mature" rate. Over the course of the first five years of coverage the rates increase to the "mature" rate on a formulated stair-step basis. Some bare doctors are buying coverage again because of the low cost the first few years, with the belief that the later years’ rates will become more affordable as the market changes.

Eighth, a few hospitals in Florida have now been forced in a couple of cases to put up $250,000 for a bare doctor’s liability since the hospital allowed the doctor to go bare. Hospitals, their insurers, and reinsurers have become alarmed at the prospect of even more doctors going bare, financially exposing hospitals to more risk.

Ninth, the managed care industry for the most part has been silent on the bare movement. In only some isolated cases are bare doctors being dropped from their panels.

Tenth, the plaintiff bar is floating the idea of asking the legislature to force Florida doctors to carry malpractice insurance. The press has recently written and aired more stories about bare doctors protecting their assets. The public is becoming more alarmed about the issue. Hospitals are predicted to remain silent on this subject, and the medical community itself will be divided on forcing doctors to carry coverage.

And finally, relatively few doctors are purchasing any plans to reduce their legal fees. We estimate that only 500 doctors out of the nearly 10,000 bare doctors have thus far purchased such plans. These options include Medical Defense Solutions, a PPO type plan for discounted legal fees, or legal defense-only insurance offered by three different sources. Evanston Insurance Company is the sole legal defense-only coverage insurer that is even rated by A.M. Best. The other two offering coverage in Florida are small start-ups, and thus financially much more fragile.

The malpractice insurance marketplace is stabilizing in Florida due to a number of factors including the limited tort reform enacted and the formation and the entry into the marketplace of a number of new malpractice insurance insurers. I predict that malpractice coverage pricing will drop in the next three years, if not sooner. Once the prices are back within a range of affordability for most doctors it will be very interesting to see if doctors buy insurance again or are so used to being bare that they opt out of insurance coverage the rest of their careers.

Matt Gracey, independent malpractice insurance specialist with Danna-Gracey, Inc., can be reached at (561) 276-3553, (800) 966-2120 or
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