Does it take to pay off a surgeon’s annual malpractise premiums? Well, the answer is not the same as the number of licks (three) it takes to get to the centre of a tootsie pop. I was recently talking to a friend of mine who is an older surgeon - he has a good deal and only pays 68,000$ per year for his insurance (since he has no outstanding suits). He told me he calculated how many elective inguinal hernia repairs he would have to do in a year to make that much - and essentially break even (although of course there are many other costs to his general surgery practise). This number was based on a average fee that he received from all insurances he accepted. The amount he needed to do?
118.
Thankfully he does some other procedures!
Please excuse my ignorance on this one. I think you’re clear on the fact that I’m a nosy layperson and not even close to a medical professional.
Does each doctor have to pay out of pocket for their malpractice insurance? Or does the hospital/practice they work for pay for the insurance as part of the benefits they receive as an employee?
Oh! Have you ever done a post on malpractice and the ramifications for the doctor if 1. they are deemed innocent and 2. if they are deemed guilty?
That would be a great read. (Not to tell you how to run your blog or anything.)
I was surprised to learn that malpractice insurance could cost so much! Is that higher than the average because he’s a surgeon?
Most physicians pay their own malpractise insurance unless they are employees of a physician staffing firm or hospital. The amount varies from state to state, region to region (just like car insurance) and from Specialty to specialty (also like car insurance - ie a Ferrari is more expensive than a Honda). The amount goes up with each lawsuit or settlement. 68K is low for a surgeon in the state where I practise! OB pays the most of all specialties followed by Surgery, ER, and Anaethesia - in no particular order.
does it really matter to the cost of your premiums if the lawsuit is found be legitimate or do you take a hit because you were sued?
and I cant believe a surgeon is being paid $500 or so for a procedure that involves going into and repairing your abdominal cavity.
The only surgery I ever had was to remove my tonsils and the ENT guy definately charged more than that 20+ years ago and that I would think simplier and involve less post op risk.
Holy crap that’s some expensive insurance. He’s paying twice what I make annually in insurance…that seems a little expensive. The fact that that’s a “good deal” boggles the mind.
[…] Guess for yourself, and then go see whether ER Stories’ answer is higher or lower than you guessed (Dec. 7). […]
“does it really matter to the cost of your premiums if the lawsuit is found be legitimate or do you take a hit because you were sued?” Depends. Insurance companies make their own determination whether the doc is at fault or not and base their decisions on that more than whether the result of the suit is for the plaintiff or for the defendant doctor. A really bad example of negligence by the doc could result in losing insurance altogether. Otherwise, premiums do go up. If not at fault, no change in premium unless their have been multiple suits. Some docs are good docs technically, and don’t make mistakes they can be sued over, but have personality problems that tend to promote suits. They pay more.
Example of “really bad example.” Surgeon was called more than once by parents of child bleeding after tonsillectomy. Surgeon refused to respond, telling the parents he would meet them at ER at a time several hours in the future. By then, child had died. Doc refused to go because he didn’t want to interrupt his golf game.
I am curious whether this excellent post will be picked up by Kevin Pho for his blog, kevinMD. Kevin is on a national crusade to call attention to the pay disparity between specialists and primary care physicians. Kevin, and others, believe that the payment system must be reformed, because specialists are making out like bandits while the generalists are starving. He wants to see things evened out in the interest of fairness. I am curious what he would say about the hernia repair compensation indicated here - about 575 dollars. I am not a general surgeon, but as a neurosurgeon, that number sounds accurate. For a laminectomy I receive about 800 dollars. For a brain tumor the pay is about 1200 dollars. Is that a lot of money? That surgery takes anywhere from two to six hours. The fee includes all related hospital care and all postoperative care for three months. Surgeons make their income by being as efficient as possible and doing as many surgeries as they can. When I entered this field eighteen years ago the average neurosurgeon did 150 surgeries a year. Now the average is over 350, and incomes have fallen by over 50% over that period.
Kevin - How little do you want us to be paid for our work? Think about what $575 buys you from the mechanic, the painter, the plumber, or any other tradesman. The surgeons services are available at a bargain.
“Does each doctor have to pay out of pocket for their malpractice insurance? Or does the hospital/practice they work for pay for the insurance as part of the benefits they receive as an employee?”
It doesn’t make a difference, since the hospital/practice would have to take that cost out of the compensation they could pay their employees anyway.
Suppose a practice wants to add me as a doctor. I’ll take in, say, $175,000/year for the practice. They’ll be willing to pay me a bit less than $175,000/year less whatever it costs them to have me. If they pay $58,000 for my insurance, that’s $58,000 less they can pay me. If I pay $58,000 for my insurance, that’s $58,000 out of what they pay me. No difference, except maybe a slight tax difference.
JJ, you are exactly right!
Kevin Pho, what say you?
Well, one of my big problems with reimbursement is the disparity - and not just between specialists and generalists. I am talking about what an insurance company pays you when you are in network vs out of network. It is despicable that a brain tumour surgery will pay only 1200 bucks in network - but also disgusting is a recent bill I heard of for 120,000 that a neurosurgeon submitted to do a spinal fusion/discectomy! The insurance company wound up paying the guy over 60,000$ which STILL is obnoxious. This is why all surgeons are striving to get out of all insurance plans- hell, for 60K, why bother to balance bill! Some middle ground needs to be reached.
Agree that is abusive and unforgivable. I can’t imagine the insurers in my area ever paying close to that amount. I have heard similar stories from NYC, though. Our out of network cases are usually “negotiated” for about ten percent over the network rate. And those cases are rare.
and the sad thing of the whole picture is the insurance companies are screwing over their customer base at the same time-
I personally uninsured but reading articles in the paper about folks with “good” insurance who cant afford needed healthcare because of what the insurance company is forcing them to shoulder as their end of the cost structure.