Going bare, or going without malpractice insurance, can leave you exposed to financial disaster.
The decision to go bare is predicated on the ability to keep all assets sheltered from a possible malpractice judgment. It used to be done by putting all assets in the spouse's name, but the high divorce rate makes that a risky proposition.
One very effective method is advocated by Stuart Schulman, PhD, chief executive officer of IAVG–Physicians Global LLC. His plan is to create a retirement benefit (non-qualified plan) and place a lien on accounts receivable to make them judgment-proof. This essentially has eliminated judgments against any of his clients.
Other physicians may hesitate to refer patients if they know that you don't carry insurance. A certain number of patients will not go to a physician without insurance.
On the other hand, when prospective, potentially litigious patients see the required notification sign in your reception area saying that you don't carry insurance, it is not unusual for them to leave before being seen. This action is seen as a plus by physicians who believe that the sign keeps such patients away from the practice.
Who suffers when physicians go bare? Both physicians and patients suffer.
The challenges of difficult cases are stimulating to many of us. Turning them down out of fear may reduce practice to the level of being boring. When physicians give up emergency and hospital privileges because of malpractice fears, a critical neurosurgical or orthopedic situation can result in horrible consequences, including death.
Some people believe that going bare will increase the chance of being sued, because it may indicate that you will settle earlier because you are paying for the defense yourself. Others believe that any significant judgment would be uncollectible or would be handled by declaring bankruptcy, with all the negative effects of bankruptcy on your life.
Unfortunately, real cases of malpractice exist in which the physician falls below the accepted standard of care. In such cases, patients definitely will suffer if they can't find an attorney to take the case, which is likely to happen if the attorney believes that it is not worth his or her time and resources to take a case with little chance of getting a significant settlement.
It appears that going bare may not be the whole, or the best, solution to the malpractice crisis. If one decides to go bare, it is essential to get excellent legal and financial guidance to avoid potential disaster.
What is really needed is lower insurance rates and some protection against frivolous suits and outlandish judgments.
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