Columbia/HCA Healthcare Corp. is considering expanding into yet another area of the healthcare industry-the physician liability insurance business, MODERN HEALTHCARE*has learned.
If the investor-owned hospital giant deems its "pilot" physician malpractice insurance program worthy of nationwide marketing, the company could become the nation's largest malpractice insurer. Nashville, Tenn.-based Columbia is associated with between 90,000 and 100,000 physicians, many of whom are shareholders in Columbia hospitals.
"We are piloting it in two or three markets and are evaluating whether it will be long term," Columbia spokeswoman Lindy Richardson said. About 150 physicians have been insured in Columbia's program for "less than a year," Richardson said.
Columbia executives declined to comment further but said they'd be more open to discussing the pilot program in the future. Columbia also wouldn't disclose in which markets it has sold medical malpractice insurance to physicians.
If Columbia's malpractice insurance program is successfully implemented nationally, it could rival St. Paul (Minn.) Fire and Marine Insurance Co., the nation's largest malpractice insurer. St. Paul provides medical malpractice insurance to more than 45,000 physicians. The company declined to comment on Columbia's pilot program.
In 1996, for the first time in three years, St. Paul raised premiums for about 3% of the physicians it insures. Columbia declined to say how its premium costs compare with St. Paul's.
Observers say the move makes sense given Columbia's strategy of attracting physicians by offering equity stakes in the company.
"If (Columbia) has an opportunity to pool their physician liability risk, it's another integrating lever for them to pull," said David A. Anderson, founder of Health Care Futures, an Itasca, Ill.-based healthcare consulting firm. "I don't know if they will find it profitable, but they will find it worthwhile. Some regional health systems have basically gotten into self-insuring physicians and have found it to be important to their physician integration strategy."
Anderson said offering physicians malpractice insurance appears to be more logical than becoming part owner of Blue Cross and Blue Shield of Ohio. That proposed $299.5 million deal is awaiting the approval of Blues policyholders and the Ohio Department of Insurance amid criticism and a suit by some policyholders to block the deal (See related story, p. 16).
Offering physician malpractice insurance "seems closer to their knitting as a provider of healthcare services," Anderson said of Columbia.