Going bare—except for a T-shirt

March 4, 2005

This doctor has found other ways to create her own version of malpractice "insurance."

Having been an employee for most of my professional life, I hadn't appreciated the cost of malpractice insurance until I had to pay for it myself. First I lost my job in upstate New York when my clinic was "downsized," and I was replaced by an NP. Then two years ago, when I lost my job at a clinic here in Florida, I faced a choice: work for someone else and risk job-insecurity again, or go solo and answer only to my own patients and to myself (see "My practice in paradise," April 23, 2004, available at http://www.memag.com/memag/article/articleDetail.jsp?id=108875). Wanting freedom, I chose to go solo-and to "go bare."

My decision to go bare was tied to the unusual nature of my practice. I set up a cash-only house call practice, with no office, no staff, and no answering service. I answer the phones myself, do my own intake histories, and take vital signs. That left one major expense, however: malpractice insurance. In Florida, it meant paying about $17,000 a year, plus thousands more for "tail" coverage. That was more than I could afford with my new practice income. So I decided it was time to go bare.

Radical? Maybe at first glance, but now it seems to me like the only way to go, particularly in Florida, where an estimated 5 percent of the state's physicians now practice without insurance. (See "Malpractice: Is going bare the only option?" March 21, 2003, available at http://www.memag.com/memag/article/articleDetail.jsp?id=111314 .) I figure that if I do the best I can for my patients, but carry no insurance, and have little in unprotected assets, why would they sue me? Would a lawyer even take the case?

I would also be truthful with them: People don't always get better, and sometimes treatments don't work. I believe this is the key to reducing malpractice risk.

Similarly, I've made a lawsuit less attractive. By carrying no malpractice insurance, I've eliminated a deep pocket. It's simple: no money, no suit.

What about personal assets? I consulted an attorney for advice about which assets can be protected from court judgments and which can't. That's the first step in deciding whether "going bare" will work. Fortunately for my husband and me, most of our assets are in our home, which is protected from creditors by Florida's "homestead exemption." Our attorney helped us shield our other assets-such as bank accounts and retirement annuities-from potential creditors.

In my research, I've found that many states don't actually require doctors to purchase malpractice insurance. Hospitals and health plans typically require it, but since I use a hospitalist, staff privileges aren't a concern. And having a cash-only practice means I don't worry about HMOs.

Florida allows doctors to practice without malpractice insurance if they post a bond, establish an escrow account, or obtain an irrevocable letter of credit to cover malpractice verdicts. The state exempts doctors from even those requirements if they meet certain conditions, including the following: they must have held an active license for more than 15 years, made no more than two malpractice payments exceeding $25,000 in the past five years, and spend no more than 1,000 hours per year in direct patient contact. Fortunately, I qualify on all three measures.

In addition to asset protection, I follow these five other malpractice "insurance" strategies: