With the Patient Protection & Affordable Care Act headlong into its implementation, the Professional Liability Underwriting Society (PLUS) focused its 2014 Medical PL Symposium on addressing the new and emerging risks resulting from the healthcare delivery system’s move toward a clinically integrated and accountable care approach. This year’s symposium took place April 23-24 in Atlanta.
The first day of the two-day symposium began with a session titled Healthcare Insurance Exchanges: the Rubber Hits the Road, which addressed how changes in healthcare and attitudes towards the healthcare profession will likely result in significant changes for the medical professional liability industry. The session’s panelists noted that the industry has enjoyed an unprecedented period of stability in the low frequency of claims and a steady, predictable severity trend, coupled with record levels of financial capacity during the last decade. No one really knows how long that will last because of the Affordable Care Act’s requirements that are driving many specialties toward hospital employment and an anticipated additional 25-27 million new patients stressing a healthcare system already suffering from a physician shortage. Panelists warned of higher patient expectations in an environment of high premiums and deductibles, narrow networks and constant chaos.
Paul Greve, Jr., executive vice president of Willis Healthcare Practice, moderated a panel dedicated to examining Strategies to Successfully Integrate Hospitals & Physician Practices. Key to the Affordable Care Act’s downward pressure on healthcare costs is the integration of hospitals and physician practices, and between 2008 and 2012, the number of independent practices decreased by almost eight percent. This decline in practice ownership is even greater among younger physicians and women. Emerging risks resulting from increased hospital employment include an adversarial claim relationship, lack of risk-management and quality-improvement coordination as well as limited shared clinical/business goals and objectives. Panelists agreed on the need for improved patient engagement, stressing the collaborative relationship between physician and patient in the modern healthcare system. This will require teaching patients how to be engaged, and teaching providers how to engage.
In the session titled Tackling the Top Claims Trends, moderator Jayme Vaccaro, Esq., director of professional liability claims at Sedgwick Inc., steered panelists through issues affecting the medical professional liability industry such as aging claims professionals readying for retirement, the relatively new phenomena of medical outsourcing and telehealth, the challenges inherent in the increased reliance on allied health providers, the potential impact of the Affordable Care Act as well as changes in claim severity and frequency. Panelists noted that claims frequency remains flat, but severity is climbing. Some panelists attributed increased severity to the new challenges inherent in electronic medical records and e-discovery.
In the session titled Ahead of the Curve: Identifying & Mitigating New Exposures, panelists identified new exposures evolving within the healthcare arena and shared their views on how best to mitigate risks in the rapidly evolving medical professional liability marketplace.
Stephan Christiansen, managing director at Conning, shared his investment management company’s data that forecasts weakening profitability for medical professional liability insurance companies—with combined ratios exceeding 100 percent by 2016. He also noted the stresses the healthcare delivery system will experience as more patients are added and that accountable care organizations will spread exposure among many new players. Christiansen recommended an increased focus on risk management and paying close attention to developing claims frequency and severity patterns.
Barbara Sinclair, senior vice president and product manager at One Beacon Professional Insurance, shared her insights as to the proactive role medical professional liability insurers should take in order to mitigate emerging exposures related to electronic health records, regulatory requirements, fraud and abuse as well as new transparency rules. She also noted that physician integration, mergers and acquisitions as well as new organizational structures are going to require the blending of exposures—such as D&O, managed care E&O, cyber and medical professional liability.
Registration for this year’s Medical PL Symposium included the ability to attend the organization’s Cyber Liability Symposium, which overlapped many of the medical liability sessions. These sessions varied between new ways the plaintiff bar is exploiting HIPAA, how electronic medical records and e-discovery are affecting claim severity as well as the dangers of social media and new technologies such as Google Glass.
* This article appears in the May 2014 issue of Medical Liability Monitor.