The Trust Model: For Decades, TMA's Insurance Trusts Have Put Physicians First
By Emma Freer Texas Medicine November 2023

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Wendy Parnell, MD, first learned about the Texas Medical Association Insurance Trust (TMAIT) after residency when she joined a private practice founded by her father and godfather that is a policyholder to this day.

 

Soon thereafter, she joined the TMAIT board, which has only catalyzed her appreciation for the work of the insurance company, which TMA founded in 1955 with three core insurance programs: disability, life, and medical.

She learned about rate-setting, stabilization funds, and insurance jargon. She also saw firsthand how TMAIT was oriented around physicians. Its product offerings have since grown to include home and auto insurance. But its mission remains the same, says Dr. Parnell, who recently ended a nine-year stint on the TMAIT board, three of which she served as chair.

“The culture of TMAIT is very much physician-focused, and everything we do is with the physician in mind,” the Dallas obstetrician-gynecologist told Texas Medicine.

The Texas Medical Liability Trust (TMLT) takes a similar approach to medical liability insurance. Founded in 1979, TMLT has guided physicians through industry upheavals, from a mass exodus of medical liability insurance providers starting in the 1970s to their return in the wake of Texas’ landmark 2003 tort reforms.

Russell Krienke, MD, a family physician in Austin who chairs the TMLT board, became a TMLT policyholder in 1984 through his medical group, finding the trust to be superior to commercial options.

TMLT’s founding “was really in response to a crisis that occurred due to the insurance companies leaving Texas due to the bad [medical liability] laws in the state,” saddling physicians with sky-high rates, he said. Because of its physician-only board, “it just made sense that the company would be working for you.”

Today, TMLT is the largest medical liability insurance provider in Texas, with more than 20,000 policyholders – success Dr. Krienke attributes to the trust model, which centers physician leadership and policyholder input – in sharp contrast to the typical private insurance company.

For decades now, TMA-member physicians have counted among their benefits access to TMAIT and TMLT, both of which provide insurance coverage tailored to the evolving needs of Texas physicians. And both companies have since gone above and beyond the traditional insurance benefits to put physicians first, setting them apart from the rest of the market.

Because the two trusts exclusively serve TMA member physicians, they are aware of and quick to respond to their niche demands. For instance, amid increasing consolidation in the health care industry, TMAIT continues to offer brokerage services to small and solo practices, which other insurance companies often eschew in favor of larger policyholders. In recent years, TMLT has developed new ancillary services for Texas-based mega physician groups that have since expanded into other states.

“The world’s different now than it was when the trust got started,” Dr. Krienke said.

Above and beyond

TMAIT Executive Director Guy Patterson points to various products as examples of this tailoring and evolution.

For instance, the trust’s disability and life insurance products are “important because physicians spend years learning to be physicians … and then they earn commensurately higher incomes than the general population because they invested that time and effort,” he said.

So, TMAIT offers products that are geared toward physicians’ specific income protection needs and are customizable depending on whether the policyholder is a practice owner or partner in need of a succession plan; an employee looking to supplement existing benefits; or a woman, who typically pays more than a man for disability insurance.

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In September, TMAIT began offering short-term disability insurance that Mr. Patterson says may be useful to residents, young physicians, and employed physicians who haven’t yet built cash reserves to carry them until long-term disability benefits take effect in the case of an accident or sickness.

TMAIT sets itself apart in other ways. The trust harbors no ambitions to expand its client base beyond physicians or its coverage area beyond Texas. And its advisor agents are paid salaries rather than sales-based commissions.

“We just serve Texas physicians, and, because we serve Texas physicians, we put their interests first,” Mr. Patterson said.

Finally, TMA member physicians gain access not only to TMAIT services but also to TMAIT sponsorship, which spans county medical societies and free CME courses in the TMA Education Center.

Dr. Parnell says this slate of benefits is unique.

“That’s one of the things that really sets TMA apart from other state medical associations.”

TMLT’s history is steadier than that of the medical liability insurance industry in Texas, which is good news for physicians, who often are at the latter’s mercy.

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By the 1970s, lack of tort reform had made Texas a boomtown for plaintiffs’ attorneys, whom Dr. Krienke said would pursue less-than-meritorious cases in hopes of a settlement. In response, many medical liability insurance providers fled the state, leaving a vacuum that TMLT would fill.

“[TMLT] is really set up to serve Texas physicians and to provide coverage that’s needed ... where the profit is not the motive for selling the insurance,” he said.

An example of that ulterior motive is how the company went beyond providing medical liability insurance.

Along with TMA and others, the trust was a founding member of the Texas Alliance for Patient Access, which was formed in 2001 and played a major role in achieving Texas’ 2003 tort reforms. The centerpiece of those reforms is a $250,000 constitutional cap on noneconomic damages in medical negligence lawsuits against individual physicians that remains in effect today. (See “TMA Moment in Time: Medical Liability Reform.”)

Dr. Krienke says the reforms had a major impact on the medical liability insurance industry in Texas, quickly ushering in the return of companies that had fled decades prior.

“It was really like flipping a switch with the amount of [legal] activity,” he said.

Despite the change, TMLT remained many physicians’ top choice.

“When the commercial carriers came back in, a lot of Texas physicians had learned their lesson, which is: You want to be insured by a company that works for you and is not going to cut and run the first time there’s a storm cloud on the horizon,” he said.

Like TMAIT, TMLT enjoys a symbiotic relationship with TMA, offering member physicians benefits in addition to scaffolding the advocacy necessary to ease physicians’ burdens over the long term.

“We want TMLT to be your carrier,” Dr. Krienke said. “But also, we realize that there’s a strength in Texas with having the TMA be there to support tort reform in the legislature and also to help Texas physicians … in dealing with health insurance companies.”

 

Last Updated On

February 09, 2024

Originally Published On

October 26, 2023

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Emma Freer

Reporter

(512) 370-1383
 

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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