An Illinois physician says he has come up with new approach to malpractice insurance, under which he has eliminated coverage and has bought discounted legal representation, based on his record of not being sued.
Mark Macumber, M.D., a family physician in the Chicago suburb of Berwyn, says he let his malpractice insurance for his private practice lapse in April, when his rate would have quadrupled to $40,000 a year.
Without coverage, Macumber would have to pay for malpractice lawsuits out of his own pocket if he is sued, but he says he has few assets. His house is mortgaged, and he has $130,000 in loans to pay off.
But if he is sued and the case is eventually dismissed, as most malpractice lawsuits are, he says he would still have lawyers' fees to pay.
With that in mind, Macumber says he has signed a contract with Chicago attorney Charles Mudd, under which the physician pays a yearly fee to the attorney and gets discounted legal coverage.
Neither Macumber nor Mudd would specify the fee or the discount, but Mudd says the doctor's cost is "much lower" than regular rates. "The cost of a frivolous lawsuit may be below the premium that the insurer is asking," Mudd explains.
Mudd says he is willing to cut Macumber a deal because the doctor has not been sued for malpractice in the six years he has been in practice. Macumber says he was named in a malpractice lawsuit as a resident, but his name was later dropped from the case.
Macumber says he is pleased with the arrangement. "What I've got with Charles is someone who sees the problem and is willing to try something new," the doctor says.
Although Mudd acknowledges he has never taken on a malpractice case, Macumber says, "I know he won't get in over his head with a situation where he feels I need some help." In that case, the doctor says, Mudd would refer him to an experienced malpractice attorney, whom he would have to pay.
Illinois authorities say having no malpractice insurance, called "going bare," is legal, but there are limitations. Macumber says few Illinois hospitals will give staff privileges to bare doctors, and few insurers in the state will contract with them.
As a result, Macumber says he has no hospital privileges, except as a part-time doctor at West Suburban Hospital Medical Center in nearby Oak Park, and his contract there runs out next June.
And because he is not contracted with insurers, Macumber says he is asking all patients to pay him out-of-pocket. At his new office, which he is in the process of opening, he says plans to charge $40 for an office visit, though he adds that he might have to adjust that amount.
Also, he says his three staff members are all part-time workers, which further helps to keep costs down.
He says his patients are sympathetic, and some even tell him, "I'll sign something that says I won't sue you." But under Illinois law, patients cannot waive their right to sue, he says.
Other doctors are also interested. "They tell me they are very eager to see what happens," he says.