A recent article by Laura Landro in the May 10, 2016 Wall Street Journal had some interesting observations about the burdens many physicians face from malpractice suits. According to a 2013 study in the Journal of Health Affairs, the average doctor spends over 50 months — or about 11% of a 40 year career — with an unresolved, open malpractice case. While a majority of cases do not even result in payments to the plaintiff (and most do not exceed insurance coverage limits), malpractice actions are nevertheless extremely stressful for physicians. And it is always possible that a malpractice judgment could exceed insurance policy limits, thus exposing the physician’s individual assets to a judgment.
My personal observation is that doctors are under increasing pressure to see more patients per day, and they are faced with increasingly complex issues, particularly with elderly patients. This can significantly increase the chance for errors.
Physicians employed by a large hospital system are of course less at risk than doctors in a private medical practice. But all physicians should consider available asset protection alternatives.
Ohio currently has some excellent ways for physicians and others to better protect their assets, including:
- A favorable LLC statute
- An Ohio Legacy Trust
- Favorable IRA protection
- Various “exemptions” from creditors under Ohio Revised Code 2329.66
This post is simply another reminder that physicians have some particular reasons to focus on asset protection planning. Ohio (and many other states) offer a number of alternatives that are clearly worth considering.