American Academy of Ophthalmology Web Site: www.aao.org
OMIC and the Academy in Partnership
From its beginnings 25 years ago as a unique approach to meeting the professional liability needs of ophthalmologists, OMIC has educated and supported its members to help control both the number of claims and the payouts on those claims. Even more important, however, it continues to be an active partner with the Academy in raising the standards of patient safety through training, guidelines, and other practice tools.
Who Knows Your Business Better Than You?
Without a doubt, the idea that ophthalmologists know their business better than anyone else underpinned the Academy’s decision to form the Ophthalmic Mutual Insurance Company (OMIC) in 1987. Indeed, in the 1980s, the professional liability insurance landscape was barren: Ophthalmologists were at the mercy of a few large insurance carriers with little loyalty to, or insight into the unique needs of, the profession of ophthalmology.
“The Academy realized that ophthalmologists required a true partner to help and support their practice,” said John W. Shore, MD, Chairman of the OMIC Board of Directors. “OMIC was created because the Academy saw a huge need to develop a professional liability insurance company tailored exclusively to the specific needs of ophthalmologists.”
Twenty-five years later, OMIC—run by and for ophthalmologists—has matured into a strong partner with the Academy. OMIC is governed by ophthalmologists who intimately understand the risks of their profession, Dr. Shore said, and can develop risk management resources specific to the practice of ophthalmology. This expertise reduces the frequency and severity of claims against OMIC insureds.
The Early Days: Setting Up the Partnership
John T. Flaxel, MD, who chaired the OMIC Steering Committee in 1987, vividly remembers the 1980s and how those tumultuous times set the stage for creation of OMIC.
“In the early 1980s, a liability crisis had developed, and Academy members were experiencing difficulty obtaining insurance,” Dr. Flaxel recalled. “Ophthalmologists were being severely overcharged for coverage. These multispecialty insurance companies had put ophthalmology in the high-risk categories, but we found that ophthalmologists had a lower risk, similar to the risk of family practitioners.”
Fortuitously, in 1986, the federal Liability Risk Retention Act (LRRA) was passed. It gave the go-ahead for individuals who practiced in the same profession to organize a corporation to underwrite professional liability insurance for members of the group. In addition, under the LRRA, a company licensed in one state could provide liability insurance to members of the profession nationwide—a key provision that allowed the Academy to move forward with its plans to create a policyholder-owned, freestanding, independent professional liability carrier.
“Our big challenge was that we needed to raise $3 million to fund the new company,” recalled Dr. Flaxel. “We decided to take our message on the road.” Members of the Steering Committee traveled across the United States to market OMIC to the Academy membership and ask them to join OMIC as well as to make a capital contribution to the program.
“We had a short window to study the issues, develop a program, and try to market it in enough states to attract ophthalmologists who could make capital contributions to fund the company,” Dr. Flaxel said. “This effort paid off, and on October 1, 1987, OMIC opened with nearly 800 members,” who were underwritten and bound in a very short period of time.
Dr. Flaxel, who also served on the OMIC Board as treasurer, vice chairman, and chairman, acknowledged that there have been “rough waters to wade through” during the last quarter of a century, but “a lot of good decisions have been made along the way based on sound insurance policies and the mission to put ophthalmologists first.” Today, OMIC insures more than 4,400 ophthalmologists nationwide.
The Partnership in Action: Quality of Care
George A. Williams, MD, a member of the OMIC Board and Chairman of the Finance Committee, noted that one of the many facets that make OMIC unique in the industry is its partnership with the Academy.
“The Academy is the voice of ophthalmology, and its close relationship with OMIC allows the two organizations to work collaboratively on a variety of topics of relevance to ophthalmologists, such as patient safety,” he said.
For example, the Academy and OMIC worked to develop guidelines to prevent wrong-site surgery; these guidelines are now available on both the Academy and OMIC websites. “It is important to emphasize that we are committed to making our patient safety information free to all Academy members, not just our insureds,” Dr. Williams noted.
The Academy and OMIC also worked together to provide guidance to all ophthalmologists on contamination of products from compounding pharmacies. “To illustrate, when the FDA issued warnings about Avastin contamination involving compounding pharmacies in September 2011, the Academy and OMIC created policy guidelines and practice recommendations to advise ophthalmologists how best to use the compounded drugs,” Dr. Williams said.
He also pointed to another unique feature of OMIC. “Because we are ophthalmologists, we have the best understanding of ophthalmic patient safety issues. This allows us to provide the timely, relevant guidance when issues suddenly arise.”
This Academy/OMIC partnership extends to quality of care. The two organizations collaborated to develop the “safety net” approach for treatment of retinopathy of prematurity (ROP).
“Because of OMIC’s experience in malpractice claims involving ROP, OMIC understood that when problems developed, it was typically because of a breakdown in the process rather than a single clinical physician making a mistake,” Dr. Williams pointed out. These neonates require complex care, which may bring a host of potential problems that can adversely affect surgery scheduling and in-hospital exams; communication among the health care team, including parents; tracking the infant’s whereabouts in case of transfer or discharge from the hospital; and follow-up appointments after discharge, among other challenges. “We developed an ROP protocol called ‘the safety net’ that involves optimizing physician understanding of how this systems-based process works.”
OMIC offers a safety net course at no charge to its insureds. “We think that by having even experienced physicians who treat ROP take this course, they will improve their understanding of the disease, enhancing the quality of care they provide patients,” said Dr. Williams.
The Partnership in Action: Risk Management
This commitment to patient safety and quality of care is at the core of OMIC’s approach to risk management.
“Whether we are giving seminars, writing articles, or simply talking to our doctors on the phone, we always keep in mind what is best for the patient,” explained Paul Weber, JD, ARM, OMIC Vice President of Risk Management/Legal. “And we share this commitment with the Academy, which also approaches risk management from an ethics and patient safety perspective.”
The OMIC Risk Management Program can be divided into three key components: the Risk Management Hotline, publications, and seminars.
Risk Management Hotline. This key resource, which fields about 1,000 calls each year from policyholders, offers one-on-one confidential discussions with physicians and/or their staff members on a wide range of risk management–related topics, including informed consent and patient compliance issues. “Since OMIC focuses exclusively on ophthalmologists, our staff is familiar with issues involving every subspecialty and can provide knowledgeable, expert advice about treatments, procedures, and patient challenges,” Mr. Weber noted. “This is in contrast to a multispecialty professional liability company, where ophthalmologists make up only 5 percent of the insureds.”
Online publications and resources. OMIC mails a print copy of its OMIC Digest to policyholders and makes it and other publications available online to all ophthalmologists, keeping readers current on risk management issues that arise in both clinical and practice management settings. “Our weekly blog, which focuses on risk management and practice management/patient safety issues, has also become increasingly popular,” Mr. Weber said. (The blog is accessible from the OMIC homepage at www.omic.com. OMIC Digest and other publications are available at www.omic.com, by clicking “Resources” and “Risk Management,” and scrolling to “OMIC Risk Management Digest” and “OMIC Publication Archives.”)
In addition, OMIC has a comprehensive portfolio of informed consent documents to help patients better understand their disease process and the recommended treatment. The documents run the gamut—from cataract, glaucoma, and retina surgery to different drugs used to treat a variety of disease. Mr. Weber said, “These are highly customized informed consent documents, and they are the direct result of the partnership between OMIC and the Academy to create products that not only decrease risk but also help our insureds and, most important, the patients.” (To download informed consent documents, visit www.omic.com, click “Resources” and “Risk Management,” and select “Informed Consent Documents” from the left-hand navigation bar.)
Seminars. Every year, OMIC holds about 25 live seminars across the country featuring an OMIC risk manager, OMIC board member, and/or defense counsel to discuss patient safety, loss prevention, and other risk management issues. “Our expertise allows us to drill into the clinical issues of specific cases, explaining why the case was defensible and highlighting good examples of best practices, or why the case wasn’t defensible,” Mr. Weber said. These seminars are usually presented through state and subspecialty societies, and OMIC members who participate can receive a discount off their premiums. OMIC also offers online risk management courses and recorded audio sessions. (For more about live seminars and online courses, visit www.omic.com, click “Resources” and “Risk Management,” and select “Seminars and CD Recordings” or “Online Risk Management Courses” from the left-hand navigation bar.)
“Of course, our biggest educational seminar is held at the Academy meeting every year,” he said, “and we attract more than 400 physicians and staff to our risk management presentation.” (For more, see “OMIC at the Meeting,” below.)
Support When It Is Needed Most: Handling Claims
Despite best intentions, best practices, and best quality of care, claims happen—especially in a litigious society. And when they happen, it is an emotional, anxiety-provoking experience.
OMIC policyholders, however, are never alone. Harry A. Zink, MD, former Chairman of the OMIC Risk Management Committee and current Chairman of the Claims Committee, noted that the way OMIC handles the claims process illustrates the unique strengths of the organization. The process actually begins before a claim is ever filed.
“When OMIC-insured ophthalmologists have any kind of incident that occurs in their practice, or if something comes up that may become a claim, they are encouraged to call the Risk Management Hotline immediately,” Dr. Zink said.
When policyholders call, Dr. Zink said, “They receive confidential advice about how to handle the incident initially. This is invaluable because it provides an ophthalmic resource not available in a multispecialty insurance company, giving guidance specifically tailored to ophthalmologists. Often this results in a claim never actually being filed.”
If a claim is filed, the OMIC Claims Department “brings forth all the resources available to help the doctor,” Dr. Zink said. “OMIC works hard to be supportive, evaluating the claim by conducting both in-house and outside reviews of the claim.”
The OMIC Claims Committee is composed of both general ophthalmologists and subspecialists who help to determine if the claim is valid to defend or needs to be settled.
“It’s important to stress that because of our relationship with the Academy, OMIC has been able to place experienced ophthalmologists on its board and committees—resources that would not be available without the Academy/OMIC partnership,” Dr. Zink said. “With this expertise, a physician can count on receiving the best ophthalmic and legal help.”
This specialized expertise, which also includes the OMIC staff and a team of lawyers throughout the country who are intimately familiar with ophthalmology practice, has helped OMIC to achieve notable results: The number of paid claims against OMIC-insured ophthalmologists is typically 25 percent lower than the insurance industry average, and the average indemnity paid per claim is approximately 21 percent lower than the industry average, said Timothy J. Padovese, OMIC President and Chief Executive Officer. In addition, 70 percent of claims industrywide are settled in favor of doctors. For OMIC, this number is 80 percent, Dr. Zink said.
Experience and Stability: The OMIC Edge
Mr. Padovese noted five strengths that make OMIC unique in the professional liability insurance field. 1) It is a single-specialty organization focusing exclusively on ophthalmology; 2) the Board, composed of ophthalmologists from almost all subspecialties, plays an active role in OMIC’s operations; 3) it is endorsed by the Academy; 4) it conducts very strong claims defense of physicians; and 5) it offers unparalleled risk management education.
Another interesting aspect: OMIC is a mutual insurance company and, thus, is owned by its policyholders. Insureds receive dividends and competitive premiums. In addition, the OMIC staff has impressive longevity and stability, with one of the lowest staff turnover rates of any insurance company in the industry. During the past five years, only two people have left out of a staff of 40 employees.
“We have had the exact same senior management group for the last 10 years,” Mr. Padovese said. “In fact, our first underwriter, first claims person, first marketing person, first risk manager are all still here. This stability and knowledge translate into tremendous financial strength, and our financial strength is second to none in our industry.”
Mr. Padovese added, “We have an appreciation of our policyholders. We have never had a year where we haven’t grown. Our success is related to our policyholders, and we will celebrate them as we mark our 25th anniversary.”
Just being located in the same building as the Academy translates into enormous benefits, said Mr. Padovese. This proximity allows the two entities to closely collaborate on a number of educational projects that are highly relevant to the practicing ophthalmologist.
Partnering for the Future
Dr. Shore noted that OMIC must remain in tune with and be responsive to a constantly evolving health care environment. “We have been fortunate in the past few years to enjoy a very stable professional liability climate, which has allowed OMIC to keep its costs down and build up a cash reserve, which in turn lets us pay out a dividend to our insureds.
“This financial stability, combined with our partnership with the Academy in terms of education, risk management, and risk mitigation, will allow us to continue to be responsive to ophthalmology and a leader throughout the industry,” Dr. Shore said.
David W. Parke II, MD, Academy Executive Vice President and CEO, concluded, “No other company has anything quite like OMIC—underwriting, risk management, and claims handling are managed by ophthalmologists and staff who deal with only one issue: the professional liability concerns of ophthalmologists. If an insured has a claim surrounding endophthalmitis, this isn’t the Claims Department’s first rodeo. OMIC has seen this many times before and has the data, experience, attorneys, and expert witnesses to manage it to the best outcome. This is why the company outperforms its peers and why the Academy is proud to be OMIC’s sponsor. We truly believe it is an incomparable value for our members.”
Dr. Flaxel reports no related financial interests. Mr. Padovese and Mr. Weber are employees of OMIC. Drs. Parke, Shore, Williams, and Zink are OMIC Board members.