In this important election season, we think that our physician members can benefit from some straight talk on how the Cooperative of American Physicians, Inc. (CAP) and the Mutual Protection Trust (MPT) work to provide the best medical professional liability protection available and help our physicians make their practices more productive. The following information is designed to assist those members who have not yet voted and to provide all members further assurance on how the CAP and MPT boards execute their responsibilities.
What does the Cooperative of American Physicians do?
As a cooperative corporation created to benefit physicians in a wide variety of ways, CAP pursues its mission through services ranging from risk management and patient safety to working with third parties to help you make your practice more successful. CAP was established so that it could sponsor legislation allowing the creation of the Mutual Protection Trust after gathering members consisting solely of California-licensed physicians. Indeed, the primary service provided to CAP members is the medical professional liability protection provided through MPT. CAP now does much more, including owning a subsidiary insurance agency and a subsidiary insurance company. That insurance subsidiary, the Cooperative of American Physicians Insurance Company, Inc., (CAPIC) provides, among other products, insurance protection to the Mutual Protection Trust through reinsurance. As shown every year in the CAP and MPT Annual Report, the finances of CAP and its subsidiaries operate separately from those of MPT. CAP’s operations are carried out pursuant to its Bylaws.
What does the Mutual Protection Trust do?
As an unincorporated interindemnity arrangement, MPT is a business trust established to defend against and pay members’ medical professional liability claims. In carrying out this mission, MPT pays for attorneys to defend members in court, satisfies settlements and judgments, sets assessments, purchases reinsurance, oversees the admission of members, and conducts risk assessment peer review. MPT’s operations are carried out pursuant to the MPT Agreement.
How is my assessment calculated? What are MPT dues?
MPT assessments are based on a great number of factors, the largest being claims loss experience. With the assistance of CAP’s risk management and patient safety program, MPT has made great strides in reducing claims frequency. And through a strict budgeting process, MPT makes sure that operating expenses are necessary, productive, and consistent with its mission. The MPT Board of Trustees gathers all relevant information and with the assistance of internal financial analysts and external actuaries, establishes a competitive assessment that reflects the needs of paying claims and meeting operating expenses. The assessment process is one component of disciplines that have earned MPT an A+ (Superior) rating from A.M. Best every year since 2006.
MPT dues are established separately and are $190. Dues income is used to offset MPT operating expenses and importantly, to educate policymakers on why the Medical Injury Compensation Reform Act (MICRA) promotes quality healthcare in California. The Board of Trustees believes that using dues to fund political action committees for such public policy efforts is vitally important to keeping medical professional liability protection affordable in California.
Does MPT have a hospital program?
No. MPT does not cover hospitals and uses no assessment money to cover hospitals. CAP, on the other hand, sponsors a risk purchasing group that facilitates coverage for hospitals and large medical groups — coverage that is underwritten by other insurance companies, not by MPT. In fact, the CAPAssurance Risk Purchasing Group provides medical professional liability solutions to a growing number of medical groups and medical facilities. Combined with other reinsurance business covered by CAPIC, this program -- again, separate from MPT -- now provides malpractice solutions to more than 40 medical groups, hospitals, and facilities, covering more than 2,000 physicians.
Is there an attempt to combine the CAP and MPT Boards into a single board?
No. Under California law, CAP is governed by a Board of Directors and MPT is governed by a Board of Trustees. As is required by law, these two boards are elected separately. In the past, the two boards have discussed proposals to nominate for election physicians to serve on both boards and at times, certain physicians have in fact served on both boards. Such a practice is common in the industry and does not lessen the responsibilities of any elected officeholder.
Why are three physicians who have served on the CAP Board of Directors running for the MPT Board?
It has been a longstanding practice for the MPT Board of Trustees to look to the CAP Board of Directors for potential new MPT leaders. This year, the MPT Board sees in Dr. Lisa Thomsen, Dr. Bruce Weimer, and Dr. Stewart Shanfield nominees who have the skills, experience, and commitment to serve the members in the important responsibilities of the MPT Board of Trustees. In joining fellow candidates and current MPT Board members Charles Steinmann, MD, and Phillip Unger MD, they fill out a slate with CAP and MPT experience far exceeding that of the opposing slate.
How is board compensation set?
Board compensation is studied with the assistance of independent experts who analyze boards with comparable responsibilities, based on national surveys. Because of the differing responsibilities between the boards, the compensation paid to the CAP and MPT boards is set at different levels and is described in detail in the purple CAP ballot and MPT proxy materials.
Why did CAP and MPT need a business consultant?
Over the span of two years, CAP and MPT retained a widely recognized consulting firm to assist both entities in evaluating market trends, providing governance guidance, and facilitating discussions on how to attract and serve members. The all-physician boards of CAP and MPT have direct experience in physicians’ practice needs, underwriting, continuing education, claims evaluation, and other relevant areas. Combining this physician-focused experience with the skills and knowledge of outside business experts who deal regularly with market forces at large assisted the CAP and MPT Boards in navigating the way forward in a complex, competitive environment.
Why is my vote so important?
In any active organization that strives to move forward, differences will surface. It is important, though, that you do not delay your vote on Board nominees. CAP and MPT must move forward if we are to keep up with the challenges that today's healthcare presents.
The physicians nominated by the CAP Board of Directors and by the MPT Board of Trustees have been carefully evaluated and deserve your vote. Please vote today on the nominees included in your purple CAP ballot and MPT proxy booklet or go online to vote at www.CAPphysicians.com.
Thank you for your continued support of our efforts to provide the best medical professional liability protection and practice-related services for our members.
Cooperative of American Physicians, Inc.
Mutual Protection Trust
Vote online today by logging in at www.CAPphysicians.com. After logging in, members who are eligible to vote will see the voting link. Member participation in the election process is crucial, and every vote is important!
Or, you may complete the form and return it to us by fax. To do so, please follow these steps:
- Download the two-page Ballot and Proxy.
- Print your name and CAP member number on both pages.
- Sign and date your ballot.
- Fax both pages to 213-576-8574.