managed care organizations may be liable for
penalties discourage negligent care and help
the actions of plan physicians.68
drive out of business physicians who repeated-
ly put patients at risk.
Malpractice Insurers
Hospitals need to be concerned about mal-
Private malpractice insurers also protect
practice liability as well. Like physician-owned
consumers by providing guidance and incen-
malpractice insurance companies, hospitals
tives for hospitals, other facilities, and individ-
are in a prime position to monitor and evalu-
ual clinicians to improve the quality of care.
ate clinicians. Hospitals generally self-insure,
Most insurance companies offer discounts to
so they bear the costs of malpractice directly,
physicians or physician groups willing to
creating incentives to be selective about med-
engage in practices known to reduce medical
ical professionals they hire and incentives to
errors. For example, Medical Liability Mutual
monitor clinicians over time. When hospitals
buy insurance, it is "highly experience rated,"76
Insurance Company offers a premium dis-
thus a history of claims will cause their premi-
count of 5 percent to physicians and surgeons
ums to rise.
who complete a qualified risk-management
program.69
Physicians with high claims experience may
Private Credentialing
Most patient
face premium surcharges (called "experience
As noted above, many services provided by
protections are
rating") or may have to turn to surplus-line
state licensing boards are redundant to efforts
carriers, which impose high premiums, have
taken at the point of care. Hospitals and other
unrelated to state
large deductibles, and may restrict practice or
institutions don't give clinicians free reign just
licensing.
require additional training or supervision.70 A
because the clinician has a state license. A vice
1985 survey of physician-owned insurance
president of the Texas State Board of Podiatric
companies (which cover about 60 percent of
Medical Examiners recently noted that the
the market for malpractice insurance)71 found
board is "only a licensing agency . . . We're not
that these insurers penalize physicians who
a credentialing agency . . . It's up to the hospitals to
decide who they'll credential--and for what."77
exhibit "negligence-prone behavior." During a
Hospitals, managed-care organizations,
one-year period, 0.66 percent of physicians
and other providers not only check the back-
had their insurance pulled. Insurers restricted
ground of medical professionals to avoid lia-
coverage for or sanctioned another .7 percent
bility for negligence but also to meet stan-
of policyholders, and another 1.8 percent
dards set by accrediting organizations and
faced premium surcharges or deductibles if
insurers. In addition, federal law requires
they wanted to continue to be insured. The
hospitals to request information from the
survey's authors concluded that "the physi-
National Practitioner Data Bank at the time
cian-owned companies are effective agents in
a health care practitioner applies for a posi-
identifying negligence-prone behavior . . . and
tion and then every two years. Among other
play an important role in deterring substan-
dard performance."72 A study of malpractice
things, the National Practitioner Data Bank
premiums in Vermont found surcharges as
includes entries on medical malpractice pay-
high as 400 percent,73 and all insurers report-
ments and whether a clinician has been
ed having declined or refused to renew cover-
denied privileges to practice in a hospital or
other health care facility.78
age for reasons that include a history of
adverse claims.74 A look at one California mal-
Hospitals and other facilities are accredited
by the independent Joint Commission,79
practice insurer's rate filing shows the range of
whose clinician credentialing standards are
factors the insurer considers. Among other
sufficiently extensive to meet federal Medicare
things, insurers impose surcharges for failed
and Medicaid requirements. Clinicians are
board examinations, lack of specialty board
asked for indentifying information and a dec-
certification, lack of hospital privileges, and
frequent malpractice claims.75 These financial
laration of adverse legal actions and convic-
9