The newsletter for members of the Emergency Physicians Insurance Company Risk Retention Group
The newsletter for members of the Emergency Physicians Insurance Company Risk Retention Group
Autumn 2005 - In this Issue
EPIC Performance
by James S. Leftwich, Chairman, EPIC RRG Board of Governors and
Bartholomew G. Nyhan, President and CEO, EPIC Insurance Managers
EPIC Growth: Strong, Steady, and Deliberate
On June 24, EPIC held its inaugural Annual Meeting in Stateline, Nevada. There we reported that in 2004, EPIC successfully made what may be the most difficult transition a new company faces in its development: from start-up to a viable, substantive organization whose assets and surplus reach meaningful levels. EPIC’s policyholder base grew significantly in 2004, and the company began to build its reputation as an insurer that takes the liability issues of emergency physicians and patient safety in emergency medicine very seriously.
EPIC came a long way in 2004, growing from four policyholders at year-end 2003 to 23 emergency medical groups by December 31, 2004. And now, as of August 2005, EPIC insures 29 emergency medical groups with 569 emergency physicians in 81 hospitals in a dozen states. In the process, EPIC’s insured annual patient volume grew from 300,000 at the end of 2003 to nearly one-and-a-half million by year-end 2004. By the end of 2005, EPIC is projected to insure more than two million patient visits.
On December 31 2003, EPIC’s gross written premium was $1.5 million, and its surplus stood at $787,000. One year later, the company’s gross written premium was $8.7 million, and surplus had grown to $2.7 million. To date, EPIC is approaching its year-end 2005 goal of $12 million in annualized premium and anticipates reaching $6 million in surplus by the end of this year.
The involvement and active participation of EPIC physician-insureds ensure that the company’s operations will be responsive to its owners. EPIC members provide the clinical expertise that guides the company’s highly selective and disciplined underwriting. Controlling the cost of claims depends on the direct involvement of insured-physicians in EPIC’s innovative patient safety initiatives, aggressive claims management, and progressive leadership. The clinical expertise, practical experience, and active commitment of EPIC’s emergency physician-owners directly impact the operational management of their company and will certainly contribute to its long-term success.
Grass Roots Support
In 2004, the EPIC management team and EMPSF leadership, working closely with founding EPIC policyholder-owners and the physician-members of the EPIC Board of Governors, met with key figures in the emergency medicine and patient safety communities across the country. The zeal and enthusiasm of the group generated great interest in and good press about EPIC and its physician-driven business model as well as EMPSF’s innovative efforts, leading to the development of advocacy groups among our policyholders for EPIC’s mission and vision.
Sharpened Strategic Focus
In the past year, we have sharpened our strategic focus on a core group of target states in collaboration with our growing network of insurance brokers. EPIC has actively pursued and successfully developed business in states with progressive medical liability tort reform and where competitive opportunities exist. EPIC Insurance Managers has implemented an ambitious plan to increase EPIC’s visibility at select national and state emergency physician annual conferences.
Forward Momentum
In 2004, the EPIC story was spread around the country with a focused, refined message to emergency medicine groups: If you are serious about patient safety and the practice of quality medicine, come join the leader – Emergency Physicians Insurance Company. The results have been gratifying as many outstanding ED groups that share EPIC’s vision have opted to join EPIC with its unique mission focused solely on emergency medicine. The foundation is now in place that allows EPIC to deliver a quality professional liability insurance program to its policyholders with a strong emphasis on medical error reduction though enhanced practice safety.
EPIC hit its stride in 2004 as the company grew nearly six-fold. Our belief in the EPIC business model is being realized with the outstanding business partners who share our commitment to excellence, dedication to quality, and passion for patient safety. EPIC works because of the active involvement of EPIC’s owners.
Financial Highlights
| Total admitted assets | $10.0 million |
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| Net premiums earned | $3.7 million |
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| Policyholder surplus | $2.7 million |
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| Direct written premium | $8.7 million |
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| Number of patient visits | 1.1 million |
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| Direct earned premium | $5.3 million |
Financial highlights represent figures based on year-end Ernst & Young audited financials. Complete audited year-end financials are available upon request.
Performance of Physician-owned Insurers
Physicians form their own insurance companies
THE MEDICAL LIABILITY insurance crisis that exploded in the 1970s was a crisis of availability and affordability. The frequency and severity of medical liability claims and lawsuits had rocketed upward, forcing commercial liability insurance carriers to hike premium rates accordingly. Many carriers left the professional liability market altogether. In response to those critical market conditions, physicians began to form their own liability insurance companies to provide affordable and dependable coverage that was not at the mercy of market volatility and unpredictability.
The Physician Insurers Association of America
The Physician Insurers Association of America (PIAA) was established in 1977 to represent the interests of these newly formed physician-owned insurance companies in legislation, education, risk management, and research. Today, the PIAA is an association of more than 50 physician-owned insurers that promotes the practice of high-quality, safe medicine. The Emergency Physicians Insurance Company Risk Retention Group (EPIC) is a member of PIAA.
Physician-insurers earn formidable market presence
PIAA-member insurers have earned a formidable presence in the professional medical liability insurance market. PIAA members insure more than 400,000 healthcare providers internationally, including 60 percent of American’s physicians, private medical practices, hospitals, and other healthcare providers. PIAA members underwrite more than $5 billion in professional medical liability insurance.
Significant advantages of physician ownership Physician ownership offers member-insureds significant advantages. Physicians directly participate in the management of their companies, but they do not have to carry the responsibility of daily operations. Physician-owned insurers also offer their members the opportunity for considerable control over and participation in their insurance programs.
Direct physician participation
Physician-owned insurers typically have above-average loss ratios and below-average long-term coverage costs. The direct participation of the physician-insureds results in customized risk management, peer-reviewed claims management, and superior loss control. Physician-owned insurers are rarely disbanded; their renewal retention is higher than 95 percent.
Universally successful business model
The physician-owned insurer business model is universally successful as indicated by its impressive performance. PIAA companies have recaptured more than $20 billion in investment income for their physician-owners during the last 30 years, representing more than $10 billion in net income for the companies. And, since 1978, physician-owned companies have paid out more than $3 billion in dividends to their insureds.
See You in September...at ACEP’s 2005 Scientific Assembly
WE LOOK FORWARD to seeing you in Washington, DC, for ACEP’s 2005 Scientific Assembly, September 26 through 28.
Both EPIC and EMPSF will be exhibiting at ACEP: EPIC will be in booth #1207, and EMPSF will be right next door at booth #1205. Please stop by and visit us at our booths. Meet the new EPIC committee members as well as some of the EPIC and EMPSF staff. Our ACEP schedule of events has been noted on the EPIC Intranet calendar on the home page.
The Emotional Impact of Litigation
by Tamara LeFevre, JD
Western Litigation Specialists, Inc.
This is the first in a series of articles that provide an overview of the litigation process from the psychological impact of litigation to the technical aspects of defending a claim or lawsuit.
ANY PHYSICIAN WHO has ever had a medical malpractice claim asserted against him or her knows the combination of emotions it brings: shock, anger, sadness, fear, shame, guilt, worry, disgust, helplessness, and frustration to name a few. Unfortunately, being sued is an experience most physicians will endure at least once in their careers. And it does not necessarily have anything to do with competence.
For physicians, who are trained to be empirical and logical, it is a struggle to make sense of what are often meritless claims or at least seem like meritless claims against them. Even with a legitimate claim, the litigation process can be foreign and stressful. When a physician has a claim asserted against him, it is an intrusion into his life and into his practice. It feels deeply personal, even though it usually is not. Most physicians experience a medical malpractice claim against them as an assault upon their integrity and competence.
Lack of Control
One of the most difficult aspects of the litigation process for physicians is not being in control of the situation. First, they are unfamiliar with the legal process. And, when they learn that resolution of the claim may be two to four years away, the anxiety can be overwhelming. Physicians are bright, educated people who diagnose and “fix” things. Not being able to quickly dispose of a medical malpractice claim by simply explaining the medicine to their attorney is distressing and irrational to them.
One of the greatest challenges for a physician faced with a claim is to come to terms with the fact that sometimes the actual medicine involved is not even 50 percent of what determines the likely “value” of the claim. Although it seems that a medical malpractice claim would succeed or fail merely based on whether the physician met the standard of care (i.e., provided the type of care and treatment that a reasonable physician in the same or similar circumstances would provide), there are other significant factors that come into play:
• venue
• patient demographics
• severity of patient’s injury
• what kind of witnesses the physician and the patient will be
• number of codefendants in the case
• ability and experience of the plaintiff’s counsel
Consequences and Questions
The consequences a medical malpractice claim has on a physician are varied and sometimes long term. Physicians’ reactions to being sued commonly include the following:
Physicians find themselves asking questions such as:
Did I go into the right field after all?
Few professionals experience the sense of personal failure that a physician does when a mistake (or perceived mistake) is made. The services a physician provides are inherently personal and have life-or-death importance, far different from a mistake that involves only money or inconvenience to someone.
How to Cope
The most important thing physicians can do when they are sued is to gain a better sense of control over the situation by learning more about the legal process – preferably now, as opposed to when they are facing a new claim. Another suggestion is for physicians to avail themselves of the knowledge and experience of their broker, insurer, and/or third party administrator (TPA). Physicians should contact these resources right away when they receive notice of a claim, think they might receive notice of a claim, or if they simply have general questions.
Many physicians tend to isolate themselves, which is counterproductive. In addition, physicians who continually experience symptoms of stress need to give themselves permission to seek professional assistance or other stress-relieving measures. Some physicians have benefited from short-term therapy, medication for insomnia or depression, massage, meditation, and making time for a short vacation.
It is also important to have someone to talk to, despite the fact that one of the first instructions physicians receive is to not talk to anyone about the claim other than their attorney or insurer. While this is sound advice that needs to be followed, physicians should discuss with their attorney which people they may safely speak to about the impact of the claim upon them. It is particularly helpful to be able to talk with another physician who has personally been through the process before and can understand how it feels.
It is likewise important for physicians to develop a relationship with their defense counsel and to take an active role in the defense of the case. Doing so is empowering, not to mention necessary to their defense. The physician should participate, contribute, and remain open to his attorney’s direction
and guidance.
Overall, the old adage applies: Take it one day at a time.
Our series on the fundamentals of litigation continues in our next issue with “The Birth and Life of a Claim – How it Begins, and How it Progresses.”
Tamara LeFevre, JD, has 17 years of experience as an attorney as well as a keen interest and a degree in psychology. She practiced law in Houston, Texas, defending physicians in medical malpractice suits until she joined Western Litigation Specialists, Inc. (WLSI) eight years ago. WLSI is a third party administrator that provides claims management services to EPIC and other insurers as well as self-insured healthcare providers. For additional information, go to www.epicrrg.com and www.wlsi.com.
Notify EPIC of ANY Incident Immediately
EARLY NOTIFICATION OF an incident or claim is essential to effective claims management. Timely intervention and investigation by our claims experts can resolve an incident before it turns into a lawsuit.
There are no penalties associated with notification of an incident or claim.
Please remember that our experienced EPIC professionals are here to help and protect you. If you are uncertain whether you should report an incident, or if you have any matter of concern you wish to discuss, please do not hesitate to call us. We encourage you to review the following guidelines as preparation in the event an action is brought against you.
Notify EPIC immediately if you receive:
Notify EPIC immediately if you think:
Help ensure a successful defense:
Please call with preliminary information:
An Incident Advisory Notice is available on our website at www.epicrrg.com. If you have any questions or concerns, or if you would like more information, please contact James McMahon, COO, EPIC Insurance Managers at (866) 374-2467 or jmcmahon@ncg-usa.com.
New EPIC Intranet Launched
Developed for EPIC Members
EPIC INSURANCE MANAGERS has arranged with MDIntranets to offer a six-month beta test of a customized, private intranet to all EPIC member group medical directors.
Communication Forum
Our intent in developing an intranet for our member-insured groups was to provide a forum for discussions, information exchanges, and other group communications that will build our EPIC community, allow us to share best practices, keep us well informed, and, ultimately, improve patient safety in the practice of emergency medicine.
Your Participation Is Critical
As a beta user of the EPIC Intranet, we cannot overemphasize the importance of your active participation in our intranet. Your contributions to and involvement with the EPIC Intranet will determine its success and value. We hopefully expect you will provide feedback on the usability of the intranet and share your favorite resources to develop the full potential of the EPIC Intranet. We consider the EPIC Intranet a living exchange that will be developed and refined with the resources and ideas our members share.
Features and Services
The primary feature modules of the EPIC Intranet are discussions, a library of reference documentation ranging from clinical pearls to patient safety and claims, polls, and links to websites providing a broad variety of emergency medicine resources. Calendar, task, and contact information features are also included on the intranet. Additionally, EPIC Intranet members have access to more features available through MDIntranets, including CME tracking, scheduling, and time card functions. You may also customize your EPIC Intranet with your personal preferences.
Please contact NCG Foundation Managers Director of Operations Vanessa Smith at vsmith@ncg-usa.com or call her at 530.889.2800 if you have any questions, ideas, or comments.
We look forward to lively exchanges, pertinent and timely shared information, links to robust resources, and better patient safety in emergency medicine.
THE EMERGENCY MEDICINE Patient Safety Foundation (EMPSF) has created the Annual Stuart Fleming, MD, Patient Safety Award to acknowledge and reward the EMPSF-member emergency medicine group that has best demonstrated a commitment and dedication to improving patient safety in their emergency medicine department through collaboration and compliance with their EPIC Risk Management/Patient Safety Program.
A $10,000 check and an honorary plaque will be presented to the EMPSF member emergency medicine group selected as the recipient of the 2005 Annual Stuart Fleming, MD, Patient Safety Award at the ACEP 2005 Scientific Assembly in Washington, DC, by EMPSF Chairman Graham Billingham, MD, FACEP.
EPIC RRG Board of Governors and Committee Members
EPIC RRG Board of Governors
James S. Leftwich, Chairman*
Bartholomew G. Nyhan, MBA, CLU, Vice President & Secretary
Graham T. Billingham, MD, FACEP, Vice President
Robert A. Bitterman, MD, JD, FACEP, Vice President
Victor Miranda, MD, FACEP, Vice President & Treasurer
Claims Management Committee
Graham T. Billingham, MD, FACEP, Chairman
Robert A. Bitterman, MD, JD, FACEP
Dennis Block, DO, FACEP
George Dengler, DO, FACEP
Thomas Gutwein, MD, FACEP
James Foster, MD, FACEP
Richard Garrison, MD, MS, FACEP
Jeff Wright, MD, FACEP
Robert G. Ripley, MD, FACEP, FAAEM
Robert Broida, MD, FACEP, Ex Officio
Finance and Investment Committee
Victor Miranda, MD, FACEP, Chairman
Bartholomew G. Nyhan, MBA, CLU
Robert Jasper, MD, FACEP
Michael Choo, MD, FACEP, FAAEM
Paul Fleming, MD, FAAEM
Mark Jacoby, CPA
Karen Massey, MHA
Jay Taylor, M.D, FACEP
Patient Safety and Risk Management Committee
Robert A. Bitterman, MD, JD, FACEP, Chairman
Graham T. Billingham, MD, FACEP
Brian Robb, DO, FACEP, FACOEP
Mag Greig
Robert Orosz, DO, FACEP
John M. Strayer, MD, FACEP
Patrick Johannes, MD, FACEP
Scott Welden, MD, FACEP, FAAEM
Russell Rudy, MD, FACEP
Christopher Goliver, M.D, FACEP
Randal D. Bensen, MD, FACEP
Robert Broida, MD, FACEP, Ex Officio
Underwriting and Marketing Committee
Bartholomew G. Nyhan, MBA, CLU,
Acting Chairman
Christian Burke, MD, FACEP
Sean Fulton, MD, FACEP
Frank Kaeberlein, MD, FACEP
Ameet Deshmukh, MD, FACEP
Mark Menadue, DO, FACEP, FACOEP
Christopher Pund, MD, FACEP
Jon Vargas, MD, FACEP
Robert Broida, MD, FACEP, Ex Officio
* As Chairman of the EPIC Board of Governors, Mr. Leftwich serves as an ex officio member of all EPIC committees.
EPIC Insurance Managers
Senior Management Team
Bartholomew G. Nyhan, President & Chief Executive Officer
James T. McMahon, Senior Vice President & Chief Operating Officer
Janice L. Lester, Senior Vice President, Operations
Joan Zirkle, Vice President & Controller
Dana Cooper, Vice President, Marketing & Communications
Mick Parmentier, Assistant Vice President, Claims
Grace Crisostomo, Director of Underwriting
Shawn Mountcastle, Director of Operations
Emergency Medicine Patient Safety Foundation Management Team
Graham T. Billingham, MD, FACEP, President & Chief Executive Officer
Dianne Vass, Executive Vice President & Chief Operating Officer
Vanessa Smith, Director of Operations
The EPIC Report is published quarterly by EPIC Insurance Managers for members of the physician-owned Emergency Physicians Insurance Company Risk Retention Group (EPIC). Letters to the editor and articles, to be edited and published at the editor’s discretion, are welcome. Views expressed in letters to the editor are those of the writer and do not necessarily reflect the opinion or official policy of the EPIC RRG or EPIC Insurance Managers. Please sign letters and address them to the editor or send them via email to dcooper@ncg-usa.com.
Publisher EPIC Insurance Managers, Inc.
Editor: Dana Cooper
Art Director: Shawn Mountcastle
Web Master: Jason Fontaine
EPIC Insurance Managers publishes The EPIC Report quarterly to inform emergency medicine member groups insured by the Emergency Physicians Insurance Company Risk Retention Group (EPIC) on issues pertinent to emergency medicine and professional liability insurance. Any recommendations found in the newsletter are intended as guidelines, not standards of care, and do not ensure successful outcomes. Any guidelines address principles of the practice of emergency medicine, and are not inclusive of all proper methods of care nor exclusive of other appropriate methods. Treatment decisions must be made by individual healthcare providers within the context of specific situations and in accordance with the laws of the jurisdiction in which the care is provided.
EPIC Insurance Managers, Inc.
11760 Atwood Road, Suite 5
Auburn, CA 95603
Phone 866.374.2457
www.epicrrg.com
Copyright © 2005, EPIC Insurance Managers.
All rights reserved. Printed in the USA.