Want to Serve on the Hospital Board? Think Twice.
A recent post from a fellow physician blogger, Physician On Fire, entitled, I Volunteered for the Hospital Board and Was Sued For Millions, revealed a little known risk which some physicians face. When physicians volunteer for administrative positions such as a board of director seat or medical directorship, they open themselves up to significant liability risk. Doctors have a bullseye target on their back and are subject to lawsuits which may have nothing to do with direct contact with their own patients.
Here’s the backstory of Physician on Fire. He volunteered to serve on the board of his local hospital. The hospital went bankrupt and couldn’t pay its creditors. So the creditors sued the members of the hospital board including POF. POF’s ordeal lasted several excruciating years but in the end he was finally dismissed. Whew!
The point is physicians are often asked to serve on boards, or be a medical director. Whether it’s out of obligation or altruism, the physician should not jump at the opportunity without fully understanding their liability and being adequately protected.
If you do decide to serve on a board of directors, make sure you are covered with Director and Officers (D&O) liability insurance. This insurance helps cover defense costs and damages arising out of wrongful act allegations and and lawsuits against an organization’s board of directors and/or officers. D&O exposure can include securities litigation, regulatory actions, and allegations of misrepresentation and breaches of fiduciary duties. I don’t know if D&O insurance would have covered POF in this bankruptcy situation.
For physicians serving as a medical director of a facility, there are responsibilities and liabilities which may not be covered under a standard personal medical malpractice insurance policy. A medical director is responsible for all protocols, credentialing, compliance, and general operations of the facility. This vagueness opens the physician director to all sorts of liability. Therefore, the physician needs to ensure that either their personal medical malpractice insurance contains language that specifically covers medical directorship responsibilities, or they have a separate medical director liability insurance policy.
The risk of being sued as a medical director or board member is relatively small but you do need adequate coverage if you choose to accept that title.
These are some of the best articles I’ve read this week.
Ray Dalio, the co-chairman of Bridgewater Associates, talks about short-term and long-term self-interest in- Short-Term Self-Interests are Being Pursued to a Degree That it is Threatening to Our Long-Term Self-Interest.
This real estate investor went from zero to millionaire in six years. How I Went From Broke Poker Player at 25 to Millionaire at 31.
You don’t have to be a hard-core Mustachian to adopt some of his principles. You Can Retire Early Without Adopting Mr. Money Mustache’s Extreme Frugality.
Can you be happy when bad things happen? Happiness can be a choice. Happiness is An Attitude.
Do doctors pay a higher price for services? It’s Time to Debunk the Myth that Doctors’ Dollars Come Easily.
Money Scrap tells her deeply personal story on living with her depressed husband and his eventual suicide. How My Husband’s Depression Changed Our Lives Forever.
Insightful interview with Spencer Levy, CBRE Head of Americas Research and Senior Economic Advisor, about the effects of the new tax law on commercial real estate. The New Tax Law’s Effect on CRE: A conversation with Spencer Levy.
That wraps it up. Hope you have a great weekend. Don’t forget to follow me on Twitter.
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