Additional elements a physician should take into consideration when looking at insurance policies include:
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August 2017- Amount of time the payments will last;
- Elimination period (how long you have to be disabled before the benefits start);
- Availability of extra money to pay off student loans in addition to the regular benefits; and
- Residual or partial benefits, which base the payment on the amount of time you can still work.
“I think physicians don’t realize that good plans pay even if you aren’t completely disabled,” said Dr. Bryant. “While I was able to still work half-time, I got 50% of my benefit. For the six weeks I was completely out, it went to 100%.”
The Health of Your Practice
Another issue that arises when a physician is disabled is the survivability of the practice itself. The size of the practice determines the types of concerns that need to be addressed.
The business end can also benefit from a kind of disability insurance. Usually called a “business income rider,” this pays the practice for losses in revenue while a physician is unable to work. If you are a single provider or small group, the loss of billings from one physician can put a significant hole in your revenue. At the same time, overhead previously spread between two physicians would be paid by only one. Business income riders replace the disabled physician’s contribution to overhead, which could make the difference between a practice continuing or folding.
Our problem when a physician was disabled is that we are very specialized. You really can’t take a neurotologist’s patient, hand them off to a rhinologist, and hope it works. In our case, we coordinated with the university for patient care. —Lorin Easly, COPM
These policies can be expensive, so each practice must decide whether the expense is worth it. A five-physician group may be able to get by more easily than a one- or two-person practice. Also, those with robust ancillary services, such as hearing aids, can use that income to offset at least some of the overhead expenses and lessen the need for insurance.
“It is a scary thing when a doctor goes down,” said Tricia Long, COPM, the practice administrator for Dr. Bryant’s group. “You don’t know what will happen to the practice, especially in cases where the physician’s return may not be clear.”
Although finances are an important piece of the puzzle, day-to-day operational considerations are at least as important. Decisions regarding who will see patients, how call will be divided up, and how compensation will be rearranged as the workload is shifted around are all critical to ensuring the success of a practice.
Replacing a Physician
In solo or small group practices, replacing the physician is a big problem. Many reach out to others in the community who might be able to see their patients. The medical equivalent of mutual aid agreements can help with physician coverage. In addition, these relationships often include provisions for selling the practice to the covering physician should the disability be permanent. Finding a locum tenens is another possibility; however, the lead time for finding a physician and getting him or her credentialed and ready to go can be problematic.