Berkshire Hathaway subsidiary National Indemnity Co. closed its $2.5 billion purchase
New York physicians who are members of the malpractice insurer MLMIC have a new backer as they fight lawsuits from patients: billionaire Warren Buffett.
Berkshire Hathaway subsidiary National Indemnity Co. closed its $2.5 billion purchase of MLMIC on Oct. 1 after receiving approval from the state Department of Financial Services and MLMIC policyholders.
Buffett appeared Wednesday on a live-stream video from Omaha, Neb., with Dr. James Reed, MLMIC chairman, to discuss the transaction and the health care industry.
The acquisition gives physicians insured by MLMIC the financial backing of a company worth more than $520 billion.
Buffet said he views medical malpractice coverage as particularly important because, unlike home or auto coverage, the insurer is defending a physician's reputation.
"We're going to defend the physicians," he said, "even if sometimes it makes sense to settle and pay the lawyer's fees and move on."
Reed, who is also CEO of the nonprofit St. Peter's Health Partners system in Albany, said changes in the health care industry, including the consolidation of medical practices and hospitals, have stoked fear among physicians.
"There's a lot of uncertainty in New York state," he said. "What we want to do is take this uncertainty off the table."
One issue doctors are watching closely, he said, is the health care partnership between Amazon, Berkshire Hathaway and JPMorgan Chase.
Buffett continued to keep details scant about the venture, which is being led by Dr. Atul Gawande, a surgeon and author. The size of all three employers will be helpful in achieving their goals of promoting better care at a lower cost, Buffett said.
He said the partnership is "really at the embryonic stage"—without timetables. "It's a little like when Columbus sailed," he said. "We don't know exactly where we're going, and we hope we won't fall off a shelf."