Malpractice insurance in healthcare: necessity and practitioner responsibility

Malpractice Insurance Is Necessary but Should Be the Responsibility of the Practitioner

In an increasingly litigious society, there has been a concomitant increase in the number of malpractice lawsuits filed against professional practitioners in all fields, but most especially in the professions of healthcare, law and accounting. As a result, there has also been growing interest in the need for malpractice insurance among practitioners in these fields. After considering the different types of malpractice insurance available as well as the costs, this paper provides a discussion concerning why malpractice insurance is necessary and why practitioners should pay for it. Finally, a summary of the research and important findings concerning malpractice insurance are provided in the conclusion.

Assessment Criteria

Although every malpractice situation is unique, the general assessment criteria for malpractice are fairly straightforward and relate to the need for practitioners in any professional discipline to exercise an acceptable degree of skill and expertise in their practices. For instance, according to the definition provided by Black's Law Dictionary (1990), malpractice is "The failure of one rendering professional service to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the profession with the result of injury" (p. 959). When applied to the health care profession, negligence is the overarching consideration when assessing liability for malpractice. In order to prevail in a medical malpractice lawsuit, plaintiffs must demonstrate the following specific assessment criteria:

The existence of the practitioner's duty to the plaintiff;

The applicable standard of care and its violation;

A compensable injury; and,

A causal connection between the violation of the standard of care and the harm complained of (Black's, 1990, p. 959).

When applied to the health care profession, there are also two basic types of malpractice insurance available to practitioners, (a) occurrence and (b) claims-made (Born & Boyer, 2011), as discussed further below.

Discussion of different types of malpractice insurance

In sum, occurrence malpractice insurance for health care practitioners provides indefinite coverage irrespective of when the alleged malpractice occurred. By contrast, claims-made malpractice insurance requires that any malpractice must be reported while the policy is in effect and coverage ceases when the policy terminates (Malpractice insurance, 2015). Both occurrence and claims-made malpractice insurance emerged during the 1970s in response to increased litigation by patients as well as the increased jury awards and out-of-court settlement amounts that were being negotiated at the time (Born & Boyer, 2011). Although both types of malpractice insurance are still used, claims-made policies represented fully half of all medical malpractice insurance issued in the United States by the mid-1980s, and current estimates place the level of claims-made policies at between 70% and 80% (Born & Boyer, 2011).

Discussion of costs of insurance, benefit of insurance, risk of not carrying coverage

The costs of medical malpractice insurance have steadily increased over the past several decades to the point where many practitioners are questioning their need to maintain coverage (Jones & Alt, 2014). Despite the increasing costs, the benefits of maintaining malpractice insurance in force, including protection from frivolous and/or career-ending lawsuits, are generally regarded as being worthwhile (Jones & Alt, 2014). Nevertheless, in some venues where the costs of malpractice insurance are considered prohibitively expensive, some health care practitioners relocate their practice to jurisdictions where the costs are substantially lower (Perry & Clark, 2012). There has also been an increase in the number of third-party claims in medical malpractice suits from a wide range of interested parties that amplify the risk of failing to maintain adequate malpractice insurance coverage, including the following:

Those allegedly injured by a wrongful act of the intermediary's client, such as a car-accident victim;

Those who are or claim to be additional insureds under a liability policy issued to the intermediary's client or those holding certificates of insurance describing policies issued to the intermediary's client;

Those seeking benefits under life, worker's compensation, or group policies; and,

Those seeking benefits under property policies (Jones & Alt, 2014, p. 370).

The foregoing benefits and risks suggest that health care practitioners need malpractice insurance as discussed further below.

Is malpractice insurance necessary, if so who should pay for it?

Malpractice insurance is absolutely necessary for several reasons. To begin with, it is reasonable to suggest that like any profession, there is significant variance in the expertise and qualifications of health care practitioners and it is also reasonable to suggest that some practitioners lack these attributes to the extent that they are guilty of malpractice (Perry & Clark, 2012). In other cases, legitimate malpractice might be the result of an isolated medical misadventure by an otherwise expert but which nevertheless causes unwarranted harm. Likewise, because the courts are available to anyone, health care consumers are able to file a malpractice lawsuit whenever they believe they have received less-than-optimal care regardless of the merits of their case. For instance, according to Joel (2013), "There is little to stop a patient from bringing a malpractice lawsuit regardless of the ultimate merits of the allegations against the practitioner" (p. 500).

Taken together, it is apparent that there is an ongoing need for malpractice insurance to protect practitioners from career-ending lawsuits (Kritzer & Liu, 2014), but the question of who should pay for it is less clear, particularly when there are paraprofessionals involved or when practitioners practice in the public vs. private sectors (Brennan, 2013). In many cases, the employing health care organization is responsible for the provision of malpractice insurance to its employees (Perry & Clark, 2012). In other cases, individual practitioners are responsible for securing and maintaining their own malpractice insurance (Perry & Clark, 2012).