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The Role of Physician-Owned Insurance Companies in the Detection and Deterrence of Negligence
William B. Schwartz, MD;
Daniel N. Mendelson
JAMA. 1989;262(10):1342-1346.
Abstract
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This study presents evidence that physician-owned insurance companies and their physician members play an important role in the detection and deterrence of negligent behavior. A survey of physician-owned companies indicates that 94% involve their physicians in one or more aspects of the underwriting process. About 60% involve their members in assessing the competence of physicians who have been sued and in advising the underwriters on decisions concerning both continued insurability and the conditions of insurance. During 1985, a total of 0.66% of the physicians in physician-owned companies had their insurance terminated or were forced to give up their coverage because of negligence-prone behavior. An additional 0.7% of active policyholders were subject to restrictions on practice or other medical sanctions and 1.8% to surcharges and deductibles. Thus, disciplinary actions were in place against 3.2% of insured physicians whose performance was viewed as in some way substandard. The findings indicate that the physician-owned companies are effective agents in identifying negligence-prone behavior, and suggest that these companies also play an important role in deterring substandard performance.
(JAMA. 1989;262:1342-1346)
Author Affiliations
From the Department of Medicine, Tufts University School of Medicine, Boston, Mass (Dr Schwartz and Mr Mendelson), and The RAND Corporation, Santa Monica, Calif (Dr Schwartz).
Footnotes
The opinions and conclusions expressed herein are solely those of the authors and should not be construed as representing the opinions or policies of The Robert Wood Johnson Foundation, Princeton, NJ; the Department of Health and Human Services, Washington, DC; or The RAND Corporation, Santa Monica, Calif.
Reprint requests to Tufts University School of Medicine, 136 Harrison Ave, Boston, MA 02111 (Dr Schwartz).
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