Capson Physician Insurance Blog


What med Students (don't) know about medical malpractice

Posted by Capson Team on Jul 31, 2017 9:32:06 AM

Blog_What-Med-Students-Dont-Know-About-MedMal_LG.pngPhysician burnout is, of course, high. Not only do they care for patients, if they are solo practitioners or part of small group, they must maneuver murky waters in areas that are unfamiliar to them: accounting, HR, marketing, and the law. Is that why, in order to bypass the administrative demands of running a practice, so many young doctors opt to join established physician groups and hospital systems?

It’s an important question as the U.S. faces an unprecedented decline in solo and small group practices—the medical lifeblood of small communities. In fact, according to the Association of American Medical Colleges, the U.S. will face a shortage of 7,300 to 43,100 primary-care physicians by 2030.

But does that mean that med students shouldn’t learn about the “ins” and “out” of running a modern practice? Absolutely not. Life changes, and doctors are desperately needed in communities that currently have few solo practitioners and small physician groups to serve people.

According to a study published in the New England Journal of Medicine (Aug, 2011), “The projected proportion of physicians facing a malpractice claim by the age of 65 years was high. Among physicians in low-risk specialties, 36% were projected to face their first claim by the age of 45 years, as compared with 88% of physicians in high-risk specialties. By the age of 65 years, 75% of physicians in low-risk specialties and 99% of those in high-risk specialties were projected to face a claim.”

So what do med students know—or want to know—about medical malpractice? We talked to Tom James, an independent Farmers Insurance Agent, about his experiences speaking with the next generation of doctors and what they know about medical malpractice—an area that will eventually touch most of them.

Do medical students learn about medical malpractice insurance?

At the University of New Mexico School of Medicine (UMN) they address medical malpractice during the last half of the last semester for one two-hour session. I am one of three local agents who teach that class. UNM is one of the top medical schools in the country. From what I understand, this is typical.

What do medical students need to know about medical malpractice coverage?

I explain to students what their liability is and how coverage is limited within policies to their clinical practice. I explain institutional coverage and benefits of being an employee of the institution and the group coverage vs. individual practice options. I, then, go into claims made vs. occurrence forms depending on the state in which the student will practice. I go over claims made in detail discussing retroactive dates, tail coverage and more. I also do a large segment on outside duties including how to insure medical directors and allied personnel, as well as office and building insurance and more.

What questions do med students usually have?

In the Q&A, the number one question I get is: “What is the average cost per year?” Then I get a mix of questions relating to claims made vs. occurrence. Most doctors are actually more interested in how to deal with tax shelters for income than insurance. They are very naïve about their true liability and most graduating students do not plan to ever be sole practitioners. Most want institutional placement.

What do you tell students to look for when choosing a MedMal carrier?

I explain AM Best ratings and suggest always an A+ rated if possible. But I also explain that in Patient Compensation Fund (PCF) states, sometimes the options change and then you need to review the stability of a Risk Retention Group (RRG) if that is all that's available.

In your experience, how important is the “business of being a doctor” to a medical student in his/her overall study of medicine?

I have taught this class for a few years and once I go through the insurance, discuss facility overhead, allied personnel and more, 99% of the students tend to want to only be institutionally employed.

According to P.J. Parmar, MD in his piece Hardly Anyone is Opening Their Own Practice Anymore. Why?, he writes, “Decades ago, the majority of physicians owned their own small practice, and had patient satisfaction and personal satisfaction much higher than what is found in today’s large systems. Numerous studies have shown the benefit of the personalized care realized in a small practice. The large systems are pushing the ‘team’ and ‘care coordination’ concepts, as a means to achieve the ‘medical home’ feel that naturally exists in small practices. Yet today, physicians take jobs with the big boys; in Denver this means Kaiser, Denver Health, MCPN, Salud, and Clinica. Hardly anyone is opening their own practice anymore. Why?”

Right now, medical malpractice insurance is at an historical low cost due to tort reform, low claim severity and frequency of claims. This may influence a new doctor’s decision to open a solo practice knowing that the med mal premium shouldn’t be a financial burden. In other words, if the fear of being sued by patients is a factor in not pursuing a solo or small group practice, it shouldn’t be.

According to Medical Liability Monitor (Oct. 2016), “During the last decade or so, we’ve heard more than a few industry observers prognosticate that the party will soon be over: the hard market is coming. They’ve been dead wrong. The prognosticators’ thoughts were not without basis given the past hard-and-soft cycles the medical professional liability insurance industry experienced in the 1970s, 1980s and 1990s—with carryover into the first years of the 21st century. But there were, and are, many well-recognized factors that went in the medical liability industry’s favor during the first five years or so of the last decade. It would be a mistake to overlook them or minimize their continuing favorable effects. These factors include:

  • Successful medical liability tort reform laws enacted in many states.
  • Most of the medical liability tort reform laws enacted have been upheld by state courts—with a few notable exceptions.”
  • Read the full piece here…

For more information about medical malpractice insurance options, please visit