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Among the many risks physicians must proactively protect themselves against is the economy itself.
Our past discussions have explored dozens of different kinds of business, personal, and medical practice specific risks that physicians should consider. While many of those risks are internally created, external factors beyond our control, such as the economy, require careful consideration and in the case of the recession, can provide significant legal and financial harm for doctors.
In some cases that economic pressure is simply a realistic possibility based on what may or may not happen after this fall’s presidential election or any number of other outside factors that could slow or derail our fragile and recovering economy’s place in the global economy. The recent so-called Brexit illustrated this point and continues to create ripples with unknown consequences. In other cases the economic pressure is already present, especially for doctors practicing in states that may be experiencing recessions or at least significant economic pressure due to outside factors, including weather events, politics, labor laws, and energy prices as just a few examples we’ve seen illustrated in places like Texas, Alaska and Oklahoma. In West Virginia, local news source the West Virginia Record recently ran a story titled, “Economy May be Cause of High Number of Medical Malpractice Lawsuits in West Virginia” in which the director of the state medical association provided anecdotes about the history of malpractice lawsuits and opined that the states depressed economy was a contributing factor to West Virginia, which had 29.6 lawsuits for each 100,000 residents, being listed as the ninth most litigious state in the country for malpractice claims.
As with all the risk management issues we cover, the best legal medicine and financial self-defense is always proactive, so consider these issues and act on addressing your exposures today, whether the pressure is current or a future risk, every day counts.
One major way recessions and depressions threaten your wealth; your employment lawsuit liability spikes.
Employees may act out of fear and desperation if they are terminated for cause or simply laid-off or downsized at a time when jobs are hard to get. In some cases this will take the form of a wrongful termination lawsuit. As an employer it is especially important that you have implemented all the basic employment risk safeguards we have covered in the past. Employees affected by these kinds of economic necessities take it personally, not as an objective business decision, and will often turn a necessity or performance based lay-off into a discrimination claim (or something worse) with the help of an employment attorney. Be sure you carefully and uniformly follow all your own internal procedures and carefully document any staff reduction, whether based on economic necessity or performance. How would you react if you were fired or laid off amidst fears of a recession? Most people panic and grasp at straws.
Make sure you have adequate employee/work place policy manuals in place and that those manuals include detailed arbitration and mediation policies of the type we have discussed in the past. These policies give you opportunities to amicably resolve the issue in an informal way without being subject to the high risk, expense, and distraction of a formal court proceeding. It’s important to remember that simply “being right” won’t guarantee a result in court and that the “jury of your peers” will typically primarily be other employees - NOT employers.
Also be aware that the same pressures that may cause an employee to act against you if terminated may manifest itself in other ways with those who continued to be employed at your practice as well, including exaggerated personal injury lawsuits for your premises liability. Some of the financial pressures employees face may include their debt and their significant other’s employment status and benefits; if a two income couple loses half their income, the pressure will affect both of them. This means you must also be vigilant about fraud, theft, and embezzlement in many forms we’ve covered in the past, including theft of supplies, cash and even misuse of patient credit card numbers and other protected health information and implement both the procedures required and the specialty insurance required to shield you.
We’ll examine several other key recession related risks to your practice and assets in our next discussion.