Some Hospitals Explore Subsidizing Physicians' Malpractice Premiums in Crisis States

Physicians continue to experience significant financial burdens due to medical malpractice insurance. As a result, some physicians have retired early or have stopped offering high risk services (e.g., obstetrics) or curtailed high risk procedures (e.g., neurosurgery). Still others have relocated to states where liability insurance is more affordable. Some hospitals in hard hit states struggle to pay their own high professional liability insurance premiums but are striving to keep needed specialists on their medical staffs by crafting lawful arrangements to assist certain members of their medical staffs in obtaining coverage.

In some jurisdictions, physicians are required by law to carry medical malpractice insurance or self insure; in other states without legislation on the subject, hospital bylaws may prevent uninsured physicians from maintaining medical staff privileges due to concern that the organization would become the "deep pocket" in a lawsuit. Without subsidies from hospitals to help pay for insurance, physicians may have to make a difficult choice, as did a solo practitioner in...