September 17, 2007
 

 
TOA President's Update
  

By John T. Gill, MD
President, Texas Orthopaedic Association

This month marks the fourth anniversary of enactment of our landmark Tort Reform legislation in Texas, House Bill 4 and Proposition 12.  The news keeps getting better for the citizens of Texas.

Texas licensed a record 3324 new doctors in the past year, 808 more

than the previous year.  The physician growth rate in El Paso is 76% greater than pre-reform, 55% greater in San Antonio, and 36% greater in Houston.

The ranks of medical specialists are growing as well.  After a net loss of 14 obstetricians from 2001 to 2003, Texas has experienced a net gain of 186 obstetricians in the past four years.  There was a net loss of 9 orthopaedic surgeons from 2001 to 2003, but since tort reform a net gain of 156.  Texas has a net gain of 26 neurosurgeons since Prop 12, including one each in Beaumont and Corpus Christi, where they were desperately needed.  The Rio Grande Valley has added 189 physicians to their ranks since 2003.

Competition in the Health Care Liability market has returned.  Since the passage of Prop 12, Texas has added four new admitted rate-regulated carriers and 26 risk retention and other unregulated insurers.  Texas physicians can now shop for their policies.  Thirteen percent of the commercial physician liability market is being insured by companies new to Texas since February, 2003.

Claims and lawsuits in most Texas counties have been cut in half.  Of the suits that do make it through to trial, TMLT, the states’ largest carrier, is reporting a greater than 96% win rate for their doctors.  As a result of this, Texas physicians have seen premium rates fall an average of 21% across the state since enactment of Prop 12.

Underserved areas have benefited greatly from hospital savings on liability premiums.  Christus Spohns’ Westside Corpus Christi clinic, serving the indigent, and its Diabetes Excellence Program are funded by the hospital’s medical liability savings.  Driscoll Children’s Hospital in Corpus Christi used its liability savings to open satellite clinics in the border cities of Brownsville and McAllen.  Kelsey-Seybold Clinic in Houston is using its liability savings to fund an electronic medical record system which will enhance the quality and safety of care for 1.1 million patient visits annually in the Houston area.

Texas is indeed the envy of the nation when it comes to medical liability reform.  The reality has been even greater than the predictions.  Many, many thanks to our courageous leaders, Governor Perry, Lt. Governor Dewhurst, Speaker Craddick, Chairman Nixon, and Senator Ratliff who would not take their eye off the ball and saw this landmark legislation through to fruition.  It is indeed Ten Gallon Tort Reform.

Happy Trails.
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Marketing Your Orthopedic Practice
     

By Eric Weaver, MHA Administrator, Austin Sports Medicine

Like any business, an orthopedic practice should have a well-defined marketing plan that is anchored by measurable strategic objectives. 

Physicians have traditionally been averse to formalized marketing as it was thought that quality would be the main vehicle to drive revenues, vis-à-vis word of mouth.  However, the challenges faced by orthopedic surgeons necessitate a more structured focus on core business growth.

The concept of marketing is seemingly a difficult concept to grasp because it is so intangible and multi-faceted.  Customers are varied in the form of both patients and referring physicians.  Media channels are diverse - ranging from print, radio, television, community outreach, and good old fashioned word of mouth.  Marketing foci can be directed inward (aesthetics, customer service, quality, and product differentiation) or outward (public relations and advertising).   Despite these complex nuances, a success-minded orthopedic practice has no excuse for not committing significant resources to executing a thoughtful marketing strategy.

Indeed, the stakes are high.  The hyperturbulent healthcare environment is producing immense pressures on our practices; e.g. declining reimbursement, increased operating costs; population shifting, surging competition, demands for transparency, constraining regulatory requirements, etc.   Blind assumptions of ceteris paribus with regard to quality and resultant practice growth are no longer a reality.  Naïve adherence of the status quo is no longer an option.  In this zero-sum game, it is now sink or swim.  If you do not develop a significant and strong brand identity, your market share is susceptible to a huge amount of cannabalism from other practices.

Word of mouth still represents the most significant part of how to draw patients to your orthopedic practice.  Physician leaders and administrators must engage this notion by structuring their branding campaign to position their group in the broadest strategic way possible.  Tactics must be specifically targeted and results must be quantifiable.   The infrastructure of your practice must also be prepared to handle the consequential increases in patient flow by having optimal staffing effectiveness, technologies, and service offerings.   Your marketing plan should encompass more than just a hodgepodge scattershot approach of newspaper advertisements and refrigerator magnets.  Instead it should follow a well thought out strategic plan and have a consumer-business orientation. If so, your orthopedic practice will be primed for continued success for years to come.
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Informal Or Voluntary Networks

Texas Labor Code §413.0015(c) requires all “informal” or “voluntary” networks to report to the Division of Workers’ Compensation (Division) the following information:

• an executive contact for official correspondence;
• a toll-free telephone number;
• a list of each insurance carrier with whom the network contracts; and,

• a list of each entity associated with the network working on behalf of the insurance
carrier, including contact information.

In order to simplify the maintenance and data entry processes related to these reporting requirements, the Division has developed two reporting tools: an on-line reporting system and a flat-file data submission format. Please see the memorandum for information concerning these reporting requirements by clicking here.
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Meta-analysis: Diabetes Increases Likelihood Of Hip Fracture
    

According to a meta-analysis published in the September 1 issue of the American Journal of Epidemiology, patients with diabetes are associated with increased risk of hip fracture. Researchers examined 16 studies covering 836,941 participants and 139,531 incident cases of fracture. Type 2 diabetes was associated with an increased risk of hip fracture in both men (summary relative risk (RR) = 2.8, 95 percent confidence interval (CI): 1.2, 6.6) and women (summary RR = 2.1, 95 percent CI:

1.6, 2.7). Type 1 diabetes was associated even more strongly with incidence of hip fracture than type 2 (type 1 summary RR = 6.3, 95 percent CI: 2.6, 15.1 vs. type 2 summary RR = 1.7, 95 percent CI: 1.3, 2.2). For more information click here.  The abstract of the study can be viewed here.

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TMLT Reduces Rates Again
  

Texas' Largest Physician Carrier Announces 5th Successive Rate Cut on Anniversary of Lawsuit Reform

AUSTIN, TEXAS… The Governing Board of Texas Medical Liability Trust (TMLT) has approved an unprecedented third straight rate

reduction/dividend for TMLT policyholders. The Board has approved a 6.5% rate reduction for all medical specialties and classes effective January 1, 2008. In addition, all current TMLT policyholders renewing their policies in 2008 will receive a dividend equal to 22% of their expiring premium. The total dividend declared is approximately $35 million. The dividend will be applied at policy renewal.

TMLT has reduced rates five consecutive years since the passage of House Bill 4 and Proposition 12 in 2003: 12% in 2004; 5% in 2005; 5% in 2006; 7.5% in 2007; and 6.5% in 2008. The net effect of these cumulative rate reductions amounts to a 31% reduction from 2003 rates and approximately $200 million of premium savings.

The dividend for 2008 represents the third consecutive year TMLT has declared a policyholder dividend. By the end of 2008, renewing TMLT policyholders will have received dividends amounting to approximately $75 million. Since the passage of Prop 12 and medical liability reform of 2003, TMLT policyholders will have realized cumulative savings of approximately $275 million from rate reductions and dividends.

Effective tort reform has reduced claims intake and associated legal expenses. Improved Trust earnings have strengthened TMLT’s financial position making these rate reductions and dividends possible. There is no guarantee that an ever changing business climate will ensure future rate reductions or dividends; however, TMLT continues to work diligently to protect 2003 tort reforms in an effort to keep premiums as low as possible. Rate changes and dividend considerations are determined annually by the TMLT Governing Board, executive management, and financial consultants to the Trust.

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