If you’re a doctor, you almost certainly carry medical malpractice insurance and know that costs seem to escalate year after year with no end in sight. One alternative to carrying malpractice insurance is to set in place a comprehensive asset protection plan and then go without medical malpractice insurance.
Where it’s affordable, however, good asset protection attorneys almost always recommend buying as much insurance as possible. The reason? It’s a relatively cheap way to buy peace of mind and make sure you are covered in the event that an accident for which you actually are liable does occur. Everyone makes mistakes.
Beyond protecting your assets, and setting aside the personal choice of having insurance versus going bare, asset protection planning has another benefit. It will allow you to practice your profession without fear of frivolous litigation. It will allow you to avoid the excessive time and economic costs of defensive medicine, which stresses the entire healthcare system.
Effect of Frivolous Litigation on Your Practice
Defensive medicine, simply put, is the ordering of unnecessary tests or procedures just to make sure that “bases are covered” in case a frivolous lawsuit is filed.
A number of studies strongly suggest that fear of frivolous litigation leads physicians to practice medicine defensively. For example, one study showed that only 43% of federal government physicians practiced defensively as compared to 92% of their private sector counter-parts. The reason? Well, it’s difficult to say for sure, but one important piece of the puzzle is that the Federal Tort Claims Act protects federal government physicians from personal liability, so the incentives are entirely different depending on the system (i.e. government vs. private sector) in which you work.
The results of such studies can easily be extrapolated beyond medicine and applied to chiropractors and dentists. Assuming we buy into the idea that protection from personal liability is what distinguishes those that practice defensively, the logical next question is this: how can we replicate the incentives provided by the Federal Tort Claims Act?
Asset Protection Planning
It’s unlikely that we’ll see any sort of meaningful widespread tort reform in the near future, though Texas asset protection attorneys were successful in limiting professional liability back in 2003, as the result of extensive lobbying and a willing state government. But we can’t count on lawmakers to protect you. The answer is that you can gain absolute, bullet-proof insulation from frivolous suits by formulating and implementing a comprehensive asset protection plan that protects you if a suit is filed and, more importantly, deters litigation before it even gets started!
Please contact Lodmell & Lodmell today if you have any questions about asset protection.
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