May 5, 2014 by matray

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.

May 5, 2014 by matray

American Conference Institute, organizers of the 13th Annual Obstetric Malpractice Claims Conference taking place June 25-26, 2014, at the Union League in Philadelphia, today announced key highlights from this year’s program agenda: NEW THIS YEAR! Obtain insight as to the perspectives from the Bench - Learn from EIGHT JUDGES. They will tell you what works and what doesn’t in their courtrooms, why parties succeed and don’t succeed in med mal cases, novel trial and case management strategies, examples of bad lawyering and more. View the complete list of distinguished speakers here: www.AmericanConference.com/ObMal/speakers • New trends in shoulder dystocia cases and the expulsion defense as well as hypothermia treatment for newborns suffering from acute hypoxic encephalopathy. • The use and limitations of placental pathology in untoward pregnancy outcome. • “The New Tort Reform”: Early recognition of injury, disclosure, investigation, settlement negotiations and ADR. • The use of Oxytocin, hyperstimulation and oxygen deprivation. • Determining when an injury occurred: Infections, metabolic disorders, labor & delivery, genetic defects and beyond. • Affordable Care Act nuances and the collateral source rule. • Electronic records and audit trails as well as preparing and presenting your witness for deposition. • Proven jury selection and communication methods as well as harnessing social media when gearing up for trial. Full agenda can be found at www.AmericanConference.com/ObMal/agenda For more information on the forum, visit American Conference Institute online at AmericanConference.com/ObMal or call 888-224-2480    

June 24, 2013 by matray

editor's note: A version of this interview -- edited for length -- appears in the July 2013 edition of the Medical Liability Monitor. When Brian Atchinson assumed the chief executive position at PIAA, the trade association representing domestic and international medical professional liability insurance companies, risk retention groups, captives, trusts and other entities, the American healthcare delivery system was headlong into a period of unprecedented change. The Patient Protection & Affordable Care Act had been signed into law less than 18 months earlier, and its systemic reforms were compelling PIAA members to reevaluate their role in the healthcare market of tomorrow. At the conclusion of the first day of the 2013 PIAA Medical Liability Conference, which was hosted in Palm Desert, Calif., May 15-17, Atchinson sat down with Medical Liability Monitor to discuss the state of the medical professional liability industry and what challenges lay ahead as well as PIAA’s just announced rebranding effort and how its services will help shepherd member companies through this period of change. Following is a transcript of that conversation. Medical Liability Monitor: This is your second Medical Liability Conference as PIAA president. How has your understanding of the medical professional liability industry and the challenges it faces evolved? Brian Atchinson: There is a lot of change going on within the medical professional liability industry and marketplace, just as there is throughout the entire healthcare delivery system. I was fortunate to have a fairly good grounding in what used to be referred to as medical malpractice and is now more appropriately called medical professional liability. Early in my career, I worked for a hospital system company that ultimately became Tenet Healthcare. When I moved to Maine in 1988, I started working as an attorney representing hospitals and physician practices, mostly on business and practice issues. Soon after that I went to work for the state, for Commissioner Susan Collins, who oversaw the department of professional financial regulation and also chaired the governor’s health policy council. I was her legal counsel and functionally served as her deputy. Early on, I was assigned to tort reform and medical liability issues in the Maine state legislature and public policy domain. In 1992, when I became the insurance superintendent for the state of Maine, my very first week on the job, I had to preside over rate hearings for medical professional liability insurance. So, my familiarity with MPL issues comes from a few different perspectives. It provided me with a good foundation. Working in the Maine state government, I had the opportunity to learn from Medical Mutual Insurance Company of Maine, one of the mutuals set up many years ago. The essence of the PIAA companies is well represented by the Medical Mutual Insurance Company of Maine, and I learned a great deal from them. When there was a workers compensation crisis in Maine, and there were no companies willing to write workers compensation insurance, I took a page out of the medical liability industry playbook. We created an employer’s mutual, which was a great solution that still serves as the primary writer of workers compensation insurance in the state to this day. So, when I came back into the medical professional liability line of business, it felt very comfortable. I had to get up to speed on some of the current players and how the market has evolved, but it was interesting. In my prior work, when I was working with the Geneva Association, which is a think tank, and I was participating in meetings with the International Association of Insurance Supervisors debating with the global insurance regulators about systemic risk and whether or not there are elements of the insurance industry that could constitute systemic risk, there was a discussion about market disruption and what would happen if a dominant carrier left at a critical point. The example given by then NAIC president Dr. Terese Vaughan was the medical liability insurance marketplace and the successful response when the St. Paul companies exited the line suddenly, creating what was initially thought to be a tremendous, potentially disruptive void in the marketplace that could have had significant ramifications for the U.S. healthcare system. PIAA member companies met that challenge. There were a few other players in the market, but that is a great example of how PIAA member companies and the medical professional liability industry have a great sense of market needs. Returning to this industry after being away from it for a while has been very gratifying. This industry is so unique and so special. It really understands the role it serves for its insureds and others. I love the expression that someone said distinguishes PIAA member companies from most other lines of insurance – whether its health insurance or others – and it’s what my government relations team uses when they try to help people on capitol hill understand our industry – “our insureds actually like us”, which is not the case with some other lines of insurance. MLM: In your remarks opening the Medical Liability Conference this morning, you said that there is no greater place to address the current challenges facing the medical professional liability industry than here. What do you feel are the greatest challenges facing the industry today? BA: As a number of our speakers noted, there’s significant change going on, and we see many companies in the medical professional liability line of business adjusting to the change. They are expanding the scope of their products to include other professions within healthcare – such as nurse practitioners, nurse midwives, physician assistants and others – that are playing a more prominent role in care delivery, as well as institutions, hospitals and health systems. Many companies are expanding the scope of the providers they insure...  They are also looking at new areas of risk that are emerging now and determining how they can continue to contribute to the evolution of patient safety.  Because, ultimately, promoting quality healthcare distinguishes PIAA companies from other MPL insurers. Along those lines, I think it’s going to be very important how we evaluate the changing risks in the delivery of medicine in this country. We’ve had a number of great panels today that have touched on this theme. To borrow an expression from Wayne Gretsky, you don’t want to go to where the puck is, you want to go to where the puck is going to be. That is our goal when we put together our programs—whether it be this yearly conference, one of our educational workshops, or a webinar.  We strive to help people assess where the puck is going to be in the next few years, so to speak. Laura Jacobs, our luncheon speaker, captured it well when she was talking about people who are saying, “Oh well, you saw this migration towards acquiring or employing physicians 10 or 15 years ago and then it undid itself.” Some people say that may happen again and others say there is no way that is going to happen again. It was refreshing to hear her say, “You know, no one really knows.” We are in such different, changing times. As our keynote speaker Leonard Schaffer said this morning, the economics and the financials are much different now than ever before, and those factors will drive much of our healthcare system in the future. The sessions we’ve been putting on will stimulate a lot of good discussions and provide people with some insights into where these changes are taking us. MLM: That’s interesting. Last year’s keynote speaker at the PIAA Medical Liability Conference, Ian Morrison, had said that the healthcare reforms have left the station and we’re definitely not turning back. Here, Laura Jacobs is saying that nobody really knows what is and isn’t definite. BA: Absolutely. We know that things will never be exactly the same as they were before, but what we don’t exactly know is where things are going. People need to embrace change. That can mean different things to different individuals, but at a minimum, people need to build-in versatility and flexibility into their business models because healthcare will be delivered differently in the future. For example, there have been many articles written and some of the economic modeling conducted showing there simply will not be enough doctors in the future. However, when you speak to people in the nurse practitioner community, they point out there are not going to be enough nurse practitioners to meet projected needs, either. We know that in the future nurse practitioners, certified nurse anesthetists, nurse midwives and others are going to have greater authority and responsibility in terms of ordering tests or writing prescriptions, and we have no doubt that that will translate into greater liability. It’s a natural sort of evolution, and people need to be prepared for that. MLM: The healthcare delivery system is changing and the medical professional liability industry will change in response to those changes. How is the PIAA and its function going to change? BA: That’s a really good question. As you know, we announced the results of our rebranding efforts today. In many respects, what we’ve really done is updated our brand to better reflect what we have already become over the last 10 to 20 years. It surprises people when we tell them that our members already insure close to 3,000 hospitals, about 2,000 of those in the United States and the others around the world. Our members are not just mutuals anymore. They are reciprocals, exchanges, trusts, risk retention groups, captives, privately held stock companies, publicly held stock companies. There is no one type of PIAA member. What we have started to do in this past year, and we plan to do even more of in the future, is to ensure that our programs – whether they be in-person workshops, the yearly Medical Liability Conference, the many   webinars we are hosting or educational sessions that are available to be played back from our website – provide education, training, and tools for all of our members. That includes self-insured health systems and hospitals. We have health systems whose captives are members; we have risk retention groups that represent groups of hospitals or health systems. Many of their needs and their goals are the same as a mutual or a reciprocal or a cooperative. We are working to ensure that our programs encompass issues and topics that are just as valuable and relevant for them as they are for the traditional member company. We have the unique capability to bring together the greatest expertise in the medical professional liability community, regardless of the shape or size of the organization, the type of healthcare providers, or institutions they are insuring. Implementing our strategic plan over the last year and a half has provided us with a good opportunity to step back and look at the organization in a different light.  To use a familiar analogy, much like an automobile, we put the organization up on the lift to give it a tune-up. That applies to our programs as well. The strategic plan development was a collaborative undertaking between the board of directors and PIAA staff. It was the perfect opportunity for us to analyze the organization and truly assess our position within the MPL industry and also determine how well we are meeting the needs of our members. Every organization, big or small, should do this sort of thing every few years; it helps you become proactive as opposed to reactive. As the new guy in the organization, I found it fascinating to work with the board of directors to collectively step back, go offsite – we did it with our staff for a couple of days, then we did it with the board – and acknowledge that people sometimes – all of us –don’t see the trees through the forest. It’s been a long time since this organization was just “physicians insuring physicians,” and yet when I was talking with people about potentially joining this organization, if I talked to eight or nine friends, colleagues about the organization, by and large it was viewed as the physician mutuals insuring physicians. It had not been that organization in a long time. We had some fascinating discussions among the board of directors, really the best and brightest in this industry, about who we are, who we think we are, and who we want to be. It was really surprising to many of us that who we wanted to be – to some extent – was who we already were. We just hadn’t updated our brand; we hadn’t updated how we described ourselves. So this was a significant undertaking. [PIAA director of public relations and marketing] Eric Anderson and his team did a fantastic job of carrying out the rebranding effort, but it was made simpler because we were just trying to better articulate who the organization already was. As we framed it, certain things became apparent. At a time of dramatic change, it was also a good thing to provide the perception of a bigger tent for those who still think of us in the old vernacular of just physicians insuring physicians. What does PIAA stand for? Everyone on our staff, everyone on our board is now ready and able to collectively say that we are the insurance trade association that represents the entire MPL community who support the quality delivery of healthcare and the practice of medicine. That’s who we are. Probably 50 percent of the time, when we ask others that question, someone is going to say, “You mean you are the group whose members insure physicians.” Old perceptions die-hard. So, we understand the perception is not going to change right away. This is a situation where the brand is catching up with the reality of the organization. We are really excited to have this opportunity to convey our message a little more clearly and have a name and a brand that we can speak to. Of course, we are never going to forget our roots and the founders of this association. The physician component will always be a bedrock element of our organization as we take on a broader role in the evolving healthcare industry. As we addressed the question of whether or not to keep the name, use the acronym or come up with a whole new name, it was interesting how many of the organizations that are in our membership have already gone down this road. There are a lot of companies that have rebranded over the last 10 or 20 years. It takes a little while before the whole world starts referring to you by the new brand, but we’re sure that they will. We’re excited about that. MLM: Your answer reminds me of a conversation I had three weeks ago with Neil Morrell, the president of MagMutual in Atlanta. He said that when he came onboard in April of 2012, the first thing he did was sit down with his team to clearly define what they stand for and what drives what they do. BA: It’s oftentimes just a question of taking the time to step back, turn off the telephones and get your people together to ask, “Who are we?” That was one of the best parts about doing this rebranding. Our staff is about 20 people, and they were all involved in the process.   And I must say that taking this approach  reaffirmed my belief that sometimes it is the most junior people in your organization that have the clearest perception of who you are and what you do. The first day we spent a lot of time asking, “Who are our members? And who do we serve?” We settled on the wording, “We promote. We protect. We educate.” We thought we had it, but at the five o’clock hour, after a late afternoon break, the consultant we worked with came over and told me, “The new junior IT guy, Justin, made an observation that resonated with me. I’d like him to run it by you and the group.” Justin joined the organization only eight weeks earlier. He said, “It seems like a big part of what this organization does – from what I’ve learned so far – is you connect this industry.” We all sat there and realized, “Bing!” So now in everything promotional, you will see, “We promote, protect, educate and connect.” It is a big part of what PIAA has always done. Going back to the early days of PIAA, the purpose was exactly to connect the people who were providing medical professional liability insurance. Before the internet and all the technology that now links everyone together, PIAA literally brought people together to connect. And we still do.

June 29, 2012 by matray

The Supreme Court decision on the constitutionality of the Patient Protection & Affordable Care Act—or as its detractors call it, ObamaCare—was a victory for the President, judicial precedent and the estimated 32 to 50 million Americans who will soon have access to healthcare. As Americans, we care about the health of our brothers and sisters. Today is a good day, but regardless as to which way the Supreme Court had ruled, the United States’ healthcare delivery system was going to continue down the path of change it has been trudging for the last several years. Those involved in healthcare would have to be blind not to notice our system is broken. The United States spends the largest percentage of its gross domestic product of any nation on healthcare expenses, but the World Health Organization ranks its healthcare system at No. 37 when compared to other countries. By contrast, France spends the second largest percentage of its gross domestic product on healthcare, and its healthcare system ranks No. 1 in in the world. I write about healthcare from the standpoint of medical professional liability, and in May, I attended the Physician Insurers Association of America’s Annual Medical Liability Conference in Washington, D.C. During his keynote speech, healthcare futurist Ian Morrison, PhD, emphasized how regardless of the Supreme Court’s ruling, the transformation of our healthcare delivery system would continue unabated. “We are in the midst of a healthcare delivery transformation, which will be unaffected even if the Supreme Court—or the upcoming presidential election—overturns the Affordable Care Act,” Morrison said. “The momentum behind the transformation of the delivery system is immense. It’s very safe to say the train has left the station, and it’s very unlikely to ever go back to the way it was. “The Affordable Care Act stimulated this conversation at the national level, but what is driving this transformation is a relentless pressure from purchasers of healthcare who are dissatisfied with both the quality and performance of American healthcare. We, as Americans, pay more for a system that underperforms in so many metrics.” Earlier this year, I had the opportunity to interview Wayne Lipton, founder and CEO of Concierge Choice Physicians, a New York-based company that helps primary care physicians implement a hybrid model of concierge healthcare. He seemed mildly surprised that people feel the Affordable Care Act has been the driving factor behind the changes occurring in healthcare. “Yes, healthcare delivery is changing, but it’s been changing as long as I’ve been in the industry,” Lipton remarked. “Future change is going to be built around a continued downward pressure on cost and establishing a greater universality to care.” Many in the healthcare industry view the Affordable Care Act and its reliance on accountable care organizations to curb costs as another attempt at managed care, an idea that failed in the 1990s. So why are we returning to it now? First, accountable care organizations are built around healthcare providers rather than healthcare insurers, and accountable care organizations payment approaches will include improvements in quality of care measurement that take into account the continuum of service delivery they are designed to provide. Second, we now have the technology to do managed care right. HIPAA-compliant information technology, specifically electronic health records, will ultimately save the healthcare system billions of dollars by helping doctors reduce the number of redundant or inappropriate tests they order. Each new physician a patient visits will have access to the notes of the patient’s previous physicians or the one that referred the patient to them. Back in March, when the Supreme Court was first hearing oral arguments on the constitutionality of the Affordable Care Act, I had a great conversation with Barry Couch, founder and chief executive of HealthSure, a company that works with hospital boards, physician groups and healthcare management teams to create competitive advantages, control costs as well as put together insurance packages to cover and reduce risks in the healthcare industry. A longtime hospital trustee and licensed risk manager, Couch remarked how regardless as to whether the Affordable Care Act is deemed constitutional, the healthcare reimbursement model moving forward would necessitate physicians participate in some form of managed, or integrated, care. “Whether you are a physician or a hospital, if you are not participating in an integrated model, you simply will not have the patient flow needed to stay in business,” Couch explained. “The health insurance companies, Medicare, Medicaid are all going to contract with large integrated networks and bundle their payments for the defined population in an area. It will be a challenge for the independent, small hospital or independent practitioner not in some sort of direct ownership integration or quasi-collaborative-type of arrangement. There is going to have to be some contractual arrangement to be guaranteed a patient flow.” It’s great news that the Supreme Court recognized the constitutionality of the Affordable Care Act today. Millions of previously uninsured Americans will now have access to healthcare, those with preexisting conditions will no longer be excluded and our healthcare system takes a proud step in the humane direction. That said, the United States’ healthcare delivery system is just continuing down the path of change it has been trudging for the last several years.

July 26, 2011 by matray

I was contacted this morning by the Executive Office of the President and the Library of Congress this morning. Both offices were requesting the Medical Liability Monitor's Annual Rate Survey data. Being the morning after the President and Speaker of the House made televised speeches on how they were at an impasse on the debt ceiling negotiations, and both emphasized a need for compromise, my intuition tells me medical malpractice reform will be part of that compromise. Stay tuned for the latest developments.

June 15, 2011 by matray

side note: Here is the No. 1 quandary looming for the medical professional liability insurance industry. If physicians continue the growing trend towards hospital emplyment rather than solo or group practice, who will the traditional MPLI companies have left as customers? I’m amazed at just how quickly physician employment has swung from small independent practices to hospital-based employment. I’ve heard about it anecdotally from medical societies and malpractice carriers who are seeing their constituents shift, and have certainly observed the shift from individual physicians, but I’m still surprised how fast it’s occurring. A new report from recruiter Merritt Hawkins tells the clearest story I’ve seen: In the last 12 months, 56% of physician search assignments have been for hospital jobs, whereas 5 years ago it was just 23% Just 2% of assignments were for independent, solo practice docs compared with 17% 5 years ago Doctors are becoming more like regular wage earners, albeit high paid ones. There are some strong drivers of this trend including the need to support health information technology, comply with regulations and deal with health plans. There’s also a desire on the part of a younger, increasingly female physician workforce to have a better balance between work and home life. If anything the forces pulling physicians into hospital employment will strengthen in the near term with the arrival of Accountable Care Organizations and other forms of deep integration. Yet when a pendulum swings it tends to swing too far. Especially considering how quickly things have moved, I do expect that there will be some backlash to the rush into employment. It’s really not all that much fun having a boss, especially when that boss is a big, bureaucratic hospital with other things on its priority list besides MD satisfaction and career development. Patients may not like it so much either. I know I’d rather see a physician who’s not too tightly tied to a hospital. continue reading

June 1, 2011 by matray

side note: If you are a political junkie and follower of medical professional liability tort reform, this is a contradiction that cannot be ignored. Democrats and trial lawyers have long been in cahoots; Republicans have consistently been on the side of doctors when it comes to tort reform. Thing is, Republicans also subscribe to the philosophy of Federalism and the sovereignty of states' rights. Here is where the Republican support of federal tort reform with the HEALTH Act of 2011 contradicts federalism and states' rights. Hypocrisy? Or a case of the end justifies the means. What do Federalism and Tort Reform have in common? Well, one of our fellow travelers on tort matters, Walter Olsen, has a thoughtful piece over at Cato on whether federalist principles limit the ability of congress to impose top-down tort reform on the states - although we hasten to point out that even a quasi-libertarian like him sees a role for federal tort reform in products liability and class actions. Here's his point: [T]he Constitution contemplates federal supervision of state courts when they reach out to assert power over transactions and litigants outside their own boundaries. It has far less to say about intruding upon the authority of those courts over disputes that arose between their own residents and are unmistakably under their own law. . . . Where does this leave federal-level liability reform? It suggests a very real difference between areas like product liability and nationwide class actions—in which suits ordinarily cross state lines, and the majority of runaway verdicts are against out-of-state defendants—and more conventional kinds of tort litigation arising from car crashes, slip-and-falls, and medical misadventure, where cases are mostly filed against locally present defendants. As a rough rule of thumb, it’s worth presuming that most of the local suits do not externalize heavy costs across state lines and should accordingly be left alone by Congress unless it is itself vindicating some constitutional right or coordinating the functioning of some constitutionally authorized federal government activity. Walter doesn't say anything in particular about the punitive damages legislation we commented on, we think he'd find them to be OK, since they're tied to FDA regulation, and we think he's agree that federal regulation of the drugs and medical devices (at least those in interstate commerce) is constitutional. But what does he think about malpractice reform? Go read his post for all the details, but basically he thinks the better way to go would be to require anybody who's care is being subsidized by the federal government have to agree to whatever limitations on suit that Congress might think is appropriate. continue reading

May 16, 2011 by matray

By an overwhelming majority, the Republican-ruled Virginia House of Delegates rejected Republican Gov. Bob McDonnell’s veto of a bill that would boost the limit on court awards in medical malpractice lawsuits. The bill represented a compromise among Virginia’s doctors, insurers and attorneys with strong bipartisan support in the House and Senate. The support held in a 93-7 House override in the General Assembly’s single-day session to consider McDonnell’s vetoes and amendments. The result of two years’ worth of negotiations between the Virginia Trial Lawyers Association (VTLA) and the Medical Society of Virginia (MSV), the agreement maintains an aggregate medical malpractice cap for the next 20 years, while providing for a modest $50,000 annual increase to the current $2 million cap—representing an average annual increase of roughly 2 percent—beginning July 1, 2012, through June 30, 2032. The agreement satisfies several key requirements for MSV. It retains Virginia’s total cap; establishes an agreement for a long period of time; minimizes the risk of large premium increases; and delays the effective date of any increases. Overall, the agreement is expected to help strengthen the long-term predictability and stability of medical malpractice insurance, while having a nominal effect on insurance premiums. There will be no legislative efforts by VTLA to eliminate the total cap, amend the cap to apply only to non-economic damages or create a second cap within the total cap. In addition, the agreement preserves potential avenues for further tort reform beyond the medical malpractice cap. MSV’s Medical Liability Advisory Group will continue to explore opportunities for effective reform, such as the pilot programs included within the Patient Protection & Affordable Care Act. “Virginia currently has a climate that has effectively stabilized malpractice premiums, and attracted healthcare service providers to the Commonwealth,” McDonnell explained in his veto. “Virginia's $2 million cap is the highest all-encompassing cap in the nation, and was last raised in 2008. Raising the cap for medical malpractice judgments to $3 million over the next twenty years, without further reforms in the medical malpractice litigation system, will not meaningfully protect against healthcare cost increases. “Federal health reform law mandates, currently in litigation, will cost Virginia an estimated $2 billion over the next 10 years, and is creating great uncertainty in the healthcare system. Adding to system costs at this time without other offsets should not occur. While I commend the affected stakeholders for working diligently together, increasing the medical malpractice cap will ultimately lead towards higher healthcare costs for doctors, hospitals, businesses and, most importantly, patients.”

May 9, 2011 by matray

Last month, the National Conference of State Legislators (NCSL) wrote a letter to both the chairman and ranking member of the House Subcommittee on Health expressing “strong, bipartisan opposition to the passage of the latest federal medical malpractice legislation, HR 5, the ‘Help Efficient Accessible, Low-Cost, Timely Healthcare (HEALTH) Act of 2011,’ pending before the U.S. House of Representatives.” Modeled after the successful reforms contained in California’s Medical Injury Compensation Reform Act of 1975 (MICRA), the HEALTH Act contains a number of reforms considered critical for improving the fairness and efficiency of the medical liability system. These reforms include a $250,000 cap on non-economic damages; collateral source rule reform allowing evidence of outside payments to be made in court; a ban on subrogation by collateral sources; a fee schedule for attorney contingency fees; and periodic payments of future damages. “Medical malpractice, product liability and other areas of tort reform are areas of law that have been traditionally and successfully regulated by the states,” wrote William Horne, NCSL chairman, in the letter to the House Subcommittee on Health. “Since the country’s inception, states have addressed the myriad of substantive and regulatory issues regarding licensure, insurance, court procedures, victim compensation, civil liability, medical records and related matters. In the past two decades, all states have explored various aspects of medical malpractice and products liability and chosen various means for remedying identified problems. Over the past several years, states have continued to revise and refine their medical malpractice laws and procedures.... “NCSL studied this issue in 2005 when the last iteration of HR 5 was being considered by the U.S. House of Representatives. Our review included assessing whether circumstances had developed, or were so unique, that only federal action could provide an adequate and workable remedy. We again examined recent state actions, policy options and experiences. We discussed at length how various proposed or anticipated pieces of federal legislation fared against NCSL’s core federalism goals. Those questions included: (1) whether preemption is needed to remediate serious conflicts imposing severe burdens on national economic activity; (2) whether preemption is needed to achieve a national objective; and (3) whether the states are unable to correct the problem. The resounding bipartisan conclusion was that federal medical malpractice legislation is unnecessary.” Federal reform of the country’s medical liability tort system has been a Republican agenda item for years. The HEALTH Act was first introduced in 2005 and passed by the House. It was sponsored in the Senate by Sen. John Ensign, and co-sponsored by five other Republican senators. The legislation ultimately stalled in committee and never became law. The HEALTH Act of 2011 has been endorsed by the American Medical Association as well as the Physician Insurers Association of America, which represents medical professional liability insurance companies owned and/or operated by healthcare providers.

May 5, 2011 by matray

side note: This is an interesting article on a new phenomena -- physicians and surgeons marketing their services online. How hard -- and in what manner -- should physicians market their services? Why are we moving away from the traditional model of medicine where physicians refer their patients to specialists? And how much should the marketing of healthcare services be regulated? By David Armstrong - May 4, 2011 Bonnie Balch searched online for a back surgeon and found a pitch she called irresistible: Laser Spine Institute LLC promised to ease her pain and have her out the door in a few hours. Instead, her October 2008 surgery at the Tampa, Florida- based center left Balch incontinent, with a dangerous spinal fluid leak, she said. Still in pain, she was off work for almost a year and needed a second surgery elsewhere to get relief. “They should have told me they couldn’t help me,” said Balch, 63, a Longmont, Colorado, flight attendant. “They are in it to make money.” Her insurer paid Laser Spine $90,176 for the operation, a follow-up procedure and some subsequent care. Balch sued Laser Spine, alleging malpractice, in December 2009, one of 15 cases filed against the company in the past 18 months. The lawsuits reflect growing complaints about a new area of medicine: high-volume, doctor-owned spinal surgery centers that market directly to patients on Google Inc.’s search site and others. For Laser Spine, the business model generated a 34.3 percent net profit margin from 2006 through 2009 -- eclipsing even the Internet giant’s 24.8 percent for that period. Laser Spine and its competitors, part of a boom in outpatient clinics operated by entrepreneurial physicians, sell a high-tech version of procedures that have been around for years -- despite a lack of independent research to show that their variations lead to better outcomes. The company commands higher prices than laser-less rivals, driving up the cost of health care. Its number of malpractice claims per 1,000 surgeries is several times the rate for all U.S. outpatient surgery centers, based on insurance industry data. ‘Already Available’ “It strikes me as somewhat of a scam,” says Jeffrey Arle, a neurosurgeon at the Lahey Clinic near Boston who has treated former Laser Spine patients. He’s one of nine surgeons from across the U.S. who told Bloomberg News that the company’s laser surgery was either unnecessary or inappropriate for many patients who get it. “My conclusion is they are offering patients a version of what is already available in the regular medical care system.” Laser Spine’s in-house surveys show positive outcomes for more than 87 percent of patients, though the institute has had trouble recruiting academics to examine those results, said Jimmy St. Louis, the company’s chief operations officer. Its staff screens those who respond to its ads rigorously, he said, and only 10 percent of them end up getting an operation. The company’s standards for safety and quality of care help determine its pricing, said Dotty Bollinger, its chief medical operations officer. Works Every Day “We know it works,” Bollinger said of the surgery. “We see it every day.” Laser Spine declined to discuss Balch’s claims, which it has denied in court filings. Laser Spine often charges $30,000 for each procedure, according to interviews with several patients and copies of billing records. That’s twice as much as Aetna Inc., the third- largest U.S. health insurer, will pay for laser-less surgery. It’s more than twice the average reimbursement for spine procedures at Regent Surgical Health, a Westchester, Illinois- based company that operates 15 outpatient centers, according to Matt Lau, Regent’s corporate controller. Laser Spine’s surgeons, some of whom are investors in the 6-year-old company, perform as many as 5,000 operations a year, using small tubes called endoscopes that are equipped with video cameras. They insert the lasers separately, through catheters. Out of Bankruptcy Founder James St. Louis, 56, was just a year out of personal bankruptcy when he began seeking investors for the company in 2003, court records show. Now he owns multimillion- dollar homes in Pinellas County, Florida and Aspen, Colorado. He declined an interview request. The institute, which rewards employees with trips to the Bahamas when they hit sales and customer-satisfaction targets, has established surgical centers in Scottsdale, Arizona; Philadelphia; and Oklahoma City as well as Tampa. It now bills itself on the web as “the largest spine center in the world” and it had sales last year of $109 million, says Jimmy St. Louis, the COO and the founder’s son. From 2006 through 2009, Laser Spine earned net income of $98.9 million on revenue of $288 million, a 34.3 percent profit margin, according to testimony that chief executive officer Bill Horne provided last year in a lawsuit. In that case, Joe Samuel Bailey, an Arkansas businessman and the chairman of a rival spine center, alleges that St. Louis stole his business plan. St. Louis and Laser Spine have denied that allegation in court. Distributions to Investors The company has distributed at least $77 million to a small group of shareholders, according to an opening statement made by Bailey’s lawyer in the same court case. Another document in the case indicates that James St. Louis was slated to receive a 25 percent interest. That would entitle him to $19.25 million from the distributions. Bollinger said the 25 percent figure is not accurate. She would not disclose individual stakes. Other investors include the private equity unit of Dallas investment firm EFO Holdings LP, managed by William Esping, and two founders of OSI Restaurant Partners LLC, whose properties include Outback Steakhouse. In 2009, Goldman Sachs Group Inc. valued Laser Spine at as much as $428 million, as part of the company’s consideration of an initial public offering, Horne testified in Bailey’s lawsuit. Bollinger said in an e-mail that this estimate and others provided by bankers were “rough guesses” and not reliable. Aetna won’t cover operations at Laser Spine and some of its competitors, citing a lack of research to confirm their safety and effectiveness. Cigna Corp., the seventh largest U.S. insurer, won’t pay for the laser portion of the surgery. Other insurers provide less than full coverage. Second Mortgages Some patients, desperate for pain relief and a short recovery period, say they’ve tapped retirement accounts or taken out second mortgages to pay Laser Spine. They’re not always satisfied with the results. Fifteen former Laser Spine patients -- whose cases came up in court records, in the institute’s materials and in online back-pain forums -- said in interviews that their operations provided only fleeting relief, or no relief at all, from their back pain. The 15 malpractice claims since October 2009 came during a period in which the company performed about 7,500 procedures, based on its 2010 estimates. Nationally, outpatient surgery centers received about six malpractice claims for every 20,000 surgeries, according to data from Zurich North America, a commercial property and casualty insurer. Bleeding Internally Balch and others say that after their operations at Laser Spine they were told to get dressed and leave -- though Balch had suffered a spinal fluid leak and another patient was bleeding internally from two lacerated arteries, according to records in two malpractice suits. A third went to a hospital in need of emergency surgery just hours later, according to a state inspection report. Laser Spine executives say they meet state regulatory requirements. The company is a target for malpractice suits because it’s fully insured, said Bollinger, the medical operations officer. With regard to the claims in those suits, the institute gave Bloomberg News a statement that said: “We do not believe it is appropriate to dispute the facts at issue with a patient in the public forum.” Since July 2009, the institute has paid at least $2.8 million to seven patients to settle cases, according to the Florida Office of Insurance Regulation. Some of the cases were settled at the behest of Laser Spine’s insurer, Lexington Insurance Co., even though institute officials believed the care they provided was appropriate, Bollinger said. continue reading