With medical malpractice rates spiraling out of control, the Florida Orthopaedic Society (FOS) and its sister organization, the Bones Society of Florida (BSOF) teamed up last year to establish the Florida Orthopaedic Risk Purchasing Group (FORPG), one of the largest risk purchasing groups for medical liability insurance in the nation.
“Malpractice insurance rates are outrageous,” says Dr. Brian Ziegler, president of FORPG. “Theyre unaffordable in some parts of Florida and because the rates are so high, some doctors wont even get malpractice insurance. When youre paying $100,000 a year for $250,000 of coverage, it doesnt add up very well.”
Risk purchasing groups, like FORPG, allow professionals to collectively negotiate insurance coverage for members of the group, often leading to significantly discounted rates.
“This is a new idea in medicine,” says Dr. Ziegler. “Doctors traditionally have not had the ability to negotiate on a collective basis. Wed love to have the ability to collectively negotiate contracts with insurance companies but antitrust laws prevent it. Were unable to negotiate most of the things that we do on a collective basis, but we are allowed to negotiate for a product like malpractice insurance.” 
Matt Gracey, president of Danna-Graceya Delray Beach independent insurance agency with a team of specialists focused on medical liability coverageapproached FOS with this idea early last year after seeing how successful it was for the Florida Gastroenterologic Society Risk Purchasing Group.
“Its a perfect time in the industry cycle to create a risk purchasing group because most of the malpractice insurers are doing quite well and are eager for more business,” says Gracey. “Its a good time to get all of the doctors to unify so by the time our next crisis comes around, they will be sheltered from that crisis.”
After issuing a request for proposal to all of Floridas medical liability carriers, FORPG selected First Professionals Insurance Company, the largest and longest-serving Florida-based medical malpractice insurance carrier. It met the criteria on several levels: its domiciled in Florida and has a history of supporting organized medicine. With an A.M. Best ranking of A-Excellent and surplus of more than $240 million, the company has the financial strength necessary to support this program. FPIC is an industry leader in providing high quality risk management programs. It also insured the highest number of the original FORPG members.
“We have extensive experience with orthopaedic surgeons,” says Angie Nykamp, Vice President of Marketing for the Jacksonville-based First Professionals. “Additionally, we have a great deal of experience with the members prior to this program. Because of the way they were united and the loss information provided to us, we can identify discounts that are actuarially based on their claims experience.”
As a result of this now unified front, FORPG has seen rates drop by as much as $8,000 to $10,000 annually for its members. It has also benefited non-members since other insurance carriers and independent agents throughout the state have also dropped rates to remain competitive.
“We look at this as a long-term partnership,” says Nykamp. “Those who enroll will enjoy coverage with the best carrier with the most experience managing claims in Florida.”
Dr. Ziegler says that its long-term goal is to get every orthopaedic surgeon in the state, who is eligible, to enroll with FORPG. Since October, over 250 orthopaedic surgeons, out of the 1,250 currently practicing in the state, have joined. There are several factors that may prevent surgeons from participating, including underwriting by the risk purchasing group and the carrier, as well as those surgeons who work with academic centers and hospital-owned practices who have their insurance provided by the facilities.
“If we can get most of the orthopaedic surgeons in the state to join, wed have a tremendous power to bring the rates on malpractice insurance down,” he says. “Were getting significant numbers, but if we can get most, it would be better. Together we are so much stronger than we are individually.”
The key components of the program are its risk management and claims review committees. The risk management committee identifies best practices and provides training and resources to the membership and their staffs. The claims review committee will work with FPIC and their defense firms to review all claims filed against members of FORPG and provide expert advice on managing those claims including strategy and testimony.
All members of the risk purchasing group are required to pay a $500 annual administrative fee that funds the operation of the program and development of marketing and educational materials. A portion of those proceeds will also be reinvested in the sponsoring organizations to fund educational programs and legislative initiatives.
“That money will be well spent,” adds Dr. Ziegler. “We are also looking at other types of products we can purchase at a lower cost for members of the risk purchasing group, like disability insurance and health insurance. These are other products we are investigating as opportunities to leverage our buying power.”
