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Ethical Lines Crossed When Doctors Own Insurance Companies and Participate in Politics

A doctor, who is also a politician, crossed ethical lines when the state legislature moved to put stricter regulations on the medical malpractice insurance industry. The doctor in question stepped right into the eye of the storm and marched into the Senate leader’s office, full of vigorous objections. The bill the doctor disliked was actually assigned to one of his committees and, coincidentally, it sat there without any debate and died.

The process of killing a bill that someone dislikes at a political level is not unusual. What is different here is that the doctor owns a medical malpractice insurance firm that would have been regulated by the new law if it had passed. Further investigation into the situation shows that if the bill had passed, the doctor’s company would have had to significantly hike its cash surplus and rewrite their policies for charging customers. In other words, it would have forced them to try and find new monies, face new tax liabilities and may have made them less competitive in the insurance marketplace. These are not great things for someone in business to make money, but what about someone who is a doctor and politician?

While the doctor insists he did not have much influence on how the bill was dealt with, it comes off sounding rather weak in retrospect. He sticks to his guns on opposing the bill, despite how painfully evident it is that he is in direct conflict with his personal business interests. And politicians wonder why people do not believe a word they say?

What should have happened in this case? The man should have excused himself from any involvement with the bill in any manner, and even more so when there was money at stake. The fact is that he did not even have any business talking about it either given his direct interest in the outcome of the proposed bill’s passage. In that state, lawmakers have flexible discretion over how they influence legislation, provided they disclose any conflicts and are not directly affected by the outcome. This is certainly not the case with the doctor-senator- medical malpractice insurance company owner.

And the reason for the proposed medical malpractice insurance bill – to avoid a crisis similar to one that hit the state a few years back when a large funeral service provider took off with payments made for future funerals. It was a financial nightmare and taxpayers had to pick up the tab. It is pure speculation that the same thing would have happened in the medical malpractice insurance industry. But then again, who is to say it could not happen?

Charlie Donahue is a New Hampshire personal injury lawyer located in Keene. Donahue handles injury cases in New Hampshire and across the United States. To learn more about New Hampshire injury attorney, Charlie Donahue, visit

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