February 2008

As a young attorney in the late1970s, I learned that surgeons and other physicians, often “retired” around the age of 60. In those days, doctors simply left their practices and went on with the rest of their lives, with their most effective and proficient years behind them. But, I always asked myself, why would surgeons at that considerably young age leave such a profound profession, something to which they devoted their entire professional lives? I have come to understand that “retirement” may not be what it’s really cracked up to be -- because the physician may not really be “retiring” at all. It may well already be, and often is, the reality that diminished skills prevent the performance of their specialties. So I now ask these questions: (1) was the decision to “retire” the result of a condition preventing or impairing the ability to perform the physician’s duties, and (2) does that physician has a disability insurance policy in force? You may not have “retired” at all, and, you may, in fact, be entitled to benefits under your policy.

If medical conditions are impairing you and your ability to practice your specialty has been reduced or eliminated, you need to determine whether your disability insurance, for which you probably have been paying premiums over the course of your professional career, will now pay benefits. Most physicians have “occupation-specific” policies, which are generally considered the “Cadillac” insurance policy. The good news is that many physicians have very good policies, but the bad news is these same policies have become a bad block of business for the insurance companies.

By way of background, in the 1980s--the “heyday” of medicine, the period before managed care and today’s medical malpractice issues -- the business of being a physician was very lucrative. Coincidentally, at that time, physicians were the target market in the high growth disability insurance business. It truly seemed as though all the stars were aligned: insurers thought they had found a sure bet with regard to risk since the retirement habits and longevity of physicians were thought to be predictable and well-understood. Thus, disability insurance companies engaged in serious head-to-head competition, and a pitched battled ensued to insure young physicians . Because of heavy competition between companies at that time, policies were often written with increasingly liberal terms to cover physicians if they became disabled from practicing their specialty. All types of liberalized contract language came into being, and insurance companies offered extended benefits (often for a lifetime), cost of living increases and residual (or partial disability) benefits.

Flash forward to 2008, when today’s physicians may be disabled from using yesterday’s technology and equipment, which was developed 30 years or so ago with no long-term studies on the future consequences. No one could have anticipated the impact that medical technology had on physicians over the course of their professional careers. Also, the repetitive stress involved in maintaining particular positions for extended periods wasn’t fully understood, and the medical profession is just beginning to realize the disabling impact of these sustained activities.

Gastroenterologists, for example, may have been using endoscopic equipment during their professional careers that was not ergonomically correct or user-friendly, and they may now be experiencing major health problems. Anesthesiologists may experience hand-related problems, such as carpal tunnel syndrome or arthritis, and find that they no longer have the fine manual dexterity needed to perform their duties. Physicians performing procedures which involve leaning over a microscope or looking up at overhead screens, such as urologists, may have developed cervical or spinal conditions. Many aging surgeons develop painful hip, knee or spinal conditions prohibiting them from standing for long periods. They may be in pain, may not be able to lean over patients, and may no longer have the necessary strength and mobility to function well in an OR.

Aging physicians may now experience work-related and other health problems. In addition, falling insurance reimbursements, skyrocketing malpractice insurance premiums and an increasingly litigious practice environment have now combined to change the medical profession. As a result, physicians are sometimes forced to continue working even after declining health has hindered their ability to practice efficiently and effectively. Many physicians do not realize that their disability policies may, in fact, provide them a middle path. If forced to cut back their hours and duties to compensate for their medical limitations with a loss of income, they may be entitled to collect benefits while still continuing to work--in the reduced capacity their conditions allow--in the field they love. It is extremely worthwhile to determine eligibility for these benefits.

There are other areas of disability insurance, group or long-term disability policies, which are usually part of an employee benefit package. Hospitals or universities typically offer these group policies to its employees, including physicians. Physicians may be eligible for claims under these long-term disability policies even if they have not been paying for their own individual disability income policies.

Unfortunately, since problems in the insurance industry have caused the insurers to tighten their belts considerably, disability policies, with their liberal contract language, have now become a serious financial liability for insurers with the aging baby boom generation of physicians. As a result, insurance companies have started employing ever increasingly aggressive tactics in considering claims on these policies. This once prized and sought after commodity has become nothing other than a bad block of business.

Part 2: The Insurers Strike Back: What to expect from your Disability Insurer when filing a claim.