Take the money and run?
By: Thomas P. Cox, ARM
Vice President

PhillipsCox Insurance Services
Available As an MS Word Document

I was taught by my parents and others, as I was growing up, to not talk about myself, but to let my actions speak for me. This philosophy also forms part of the foundation of PhillipsCox; we believe that if we work hard to do what is in the best interests of our customers, everything else will take care of itself in the long run.

In the last several months, however, there has been much attention garnered by insurance agencies ("agencies") claiming they represent physicians and physician interests. These same agencies claim they serve only the medical community and implore physicians to give all of their insurance business to them These agencies do not promise better service, better prices or better products, but want medical groups and physicians to give their insurance business to them simply because of who they are.

It's nice that these people are finally getting involved. PhillipsCox has been involved with the medical community for over 25 years. In terms of just "taking the money" and doing nothing to give back to the medical community, our ongoing efforts reflect our philosophy of the last 25 years.

So, while I was raised to not talk about myself, we now feel the need to point out a few things:

	We are heavily involved with tort reform. We sponsored a lunch meeting, prior to the 2004 Virginia General Assembly convening, with the Honorable Robert F. McDonnell, a state representative from Virginia Beach who sits on the Courts of Justice Committee. More importantly, Representative McDonnell co-chaired the tort reform subcommittee this past session. At this lunch in Williamsburg over 25 physicians and practice administrators were able to speak openly with Representative McDonnell about the challenges facing medical groups today, including the challenge imposed by increasing malpractice premiums and hardening underwriting standards. This meeting was viewed as a first step in what continues to be an ongoing dialogue with Representative McDonnell and other state legislators as the insurance industry and the medical community fight their way out of this hard market. Representative McDonnell's initiatives passed, by the way, providing us with some measure of tort reform.
	In the coming months we will be participating in the ongoing tort reform dialogue between the trial attorneys, members of the General Assembly and the medical community, representing the Independent Insurance Agents Association of Virginia.
	We developed Information Sheets for our physicians to use in their waiting rooms and exam rooms that look at the current malpractice insurance environment honestly and accurately. Our goals are to undo the misinformation generated by the plaintiff's bar and, in some cases, the media; and, to generate the drive for tort reform from the grassroots level up (as tort reform from the top down apparently may not come to fruition).
	We paid for the development of and continue to sponsor the web site for the Virginia Medical Group Management Association.
	When we knew that the malpractice insurance market was going to harden in spring of 2001, as an agency we committed ourselves to making sure our customers kept their insurance, through aggressive risk management activities; and, we sought ways to make more effective use of the money available to physicians. Out of this concern we developed the following services/products:

1.	Employee Equity Health Plan: Why invest in insurance companies when you can invest in your employees? This plan is a combination of Health Reimbursement Arrangements, Health Savings Accounts, Flexible Spending Accounts, and even Transportation Management Accounts, all administered through a single debit card. Most groups that have switched to this plan have seen a first-year savings of at least 12% over their standard health insurance plan; savings in subsequent years can be even greater in these consumer-driven health plans, while allowing people to save money for future health care expenses (information on line at www.phillipscox.com, click on "Newsletters/White Papers").
2.	Long-term care with Executive Carve Out: there are only three ways to legally get money out of a corporation tax-free: a qualified retirement plan, a Health Savings Account (see above), or a long-term care policy. In our program premiums are paid over 10 years using corporate dollars and coverage placed only with companies that have a Comdex rating of 90 or higher. This means that when the time comes for long-term care services to be rendered, whether in the home or in a nursing home, coverage is in place with no premiums to pay. If there are no premiums to pay, coverage cannot be lost due to the inability to pay premiums during retirement. This is asset protection.
3.	LIBOR Mortgage Program: London Inter-Bank Offering Rate mortgages are interest-only mortgages. The LIBOR rate fluctuates daily. Most mortgages pay off primarily interest for the first several years, but principle is still included in the monthly payment. By having an interest-only mortgage you can free up money to pay down medical school debt, fund college tuition for children or grandchildren, or to invest in a partnership in the medical group. This is also a way to have more money available to invest for retirement, all while the typical home increases in value by 3% to 5% per year, under most circumstances. And, any money placed towards the principle is applied 100% towards the principle. A monthly mortgage payment of $1500 can be reduced to as little as $400 in many cases. This plan is not for everybody, but we have made it easy to access the product.
4.	Dependent care FSA: DON'T STOP READING! How would you like a dependent care FSA that makes life easier for your employees, lets your employees keep more of their income, and lets you save money at the same time? Our Care125 dependent care FSA uses electronic debit AND electronic payment of the provider (including elder care), so your employee does not have to write a check, mail receipts, and wait for reimbursement. If the provider cannot accept electronic debit a check is mailed to the provider weekly. There are no set-up costs, no minimum participation, and no cost to the employer. You save the 7.65% FICA match on the redirected dollars; the "cost" of the program is 5.65% of those redirected dollars, so your revenue increases by 2% of those redirected dollars.

	When able to do so legally, we have sought to use the commissions we receive to offset other physician costs, such as consulting fees and credentialing fees. We sought and obtained an opinion letter on this from the Bureau of Insurance, detailing when and how this practice would be acceptable. · At the annual national meeting of the Medical Group Management Association we have sponsored a dinner for Virginia administrators and physicians for over 20 years.
	We routinely sponsor free seminars for physicians and administrators. In 1999, for example, we assembled some of the top experts on negotiating with hospitals and facilitated a free seminar on this topic for physicians and administrators. Last fall we sponsored the first state-wide meeting of hospitalists, bringing in experts on coding, insurance, hospital negotiating, and the like.
	We currently offer three free seminars to our customers, Risk Management 101, Communication Skills, and Wellness. These 45 minute seminars are designed to fit the schedule of a busy practice and help develop stronger staff members for our customers.
	We also support the medical community by exhibiting at the following meetings, among others, as well as sponsoring activities and speakers at these meetings: Virginia Surgical Society The Virginia Society of Otolaryngology/Head & Neck Surgery Virginia Academy of Family Physicians Virginia Chapter, American College of Emergency Physicians Seaboard Medical Society Virginia Chapter, Medical Group Management Association Maryland Chapter, Medical Group Management Association District of Columbia Surgical Society Virginia Orthopaedic Society Richmond Academy of Medicine annual expo Virginia Beach Medical Society annual expo Eastern-Southern Section Medical Group Management Association
	Finally, we do not handle any group insurance programs for the Virginia Bar Association

While there is more that we can relate, we hope these examples demonstrate how PhillipsCox strives to be innovative and attempts to give back to the medical community, as well as how we are working actively, but quietly, to generate fair tort reform. We never have simply "taken the money and run," and we never will. It is a part of our core values that our number one responsibility is to retain our customers by simply doing a better job than anyone else; if we accomplish this one goal, we believe everything else will take care of itself. In short, we believe no one will ever outwork us.

Please feel free to call any of our representatives to discuss any issue mentioned above, as well as to obtain additional information about any of the above products and services.

Sincerely,
Thomas P. Cox, ARM
Vice President