New Health-Care Technologies Raise Malpractice Risks

June 6, 2005

New health-care technologies are helping people live longer, better-quality lives but also increase medical liability exposures, a panel of experts concluded at the Crittenden medical insurance conference in New Orleans last month.

One of the first panel discussions at the conference focused on health-care technology’s impact on medical malpractice with Kristin McMahon, special counsel for Kerns, Pitroff, Frost & Perlman serving as the panel moderator. Other panel members included: Jack McCarthy, president of the Risk Management Foundation of the Harvard Medical Institutions; Robert W. Goodson, a partner in the law firm of Wilson, Elser, Moskowitz, Edelman & Dicker LLP; Joshua Stein, chief underwriting officer at OneBeacon Professional Partners; and Dianne O’Donnell, vice president of AVRECO.

McMahon began the discussion by noting that millions of people have been able to live longer, better-quality lives because of new treatments, surgical procedures, drugs and vastly improved diagnostic procedures. But, she said, all technology introduces new errors, even when its sole purpose is to prevent errors. While technology prevents errors by replacing fallible humans with automated systems, learning to implement new healthcare technologies can be hazardous.

McMahon cited the medical profession’s experience with Laparoscopic cholecystectomies for gallstone disease. This procedure gained popularity in the early to mid-’90s. Before such a minimally invasive technique was developed, removing the gallbladder required painful and disfiguring abdominal surgery with a lengthy recovery period and was done only when absolutely necessary.

Since the laparoscopic cholecystectomy reduces these effects, there was an increase in the frequency with which this procedure was performed. However, less visibility and unfamiliar instruments with the procedure led surgeons to injure the common bile duct, perforate the bowel, etc. These risks resulted in more malpractice claims and larger damage awards than in the era before the laparoscopic cholecystectomy was available.

McMahon concluded that technology is a positive development in health care in that it extends the length and improves the quality of life but it also is also has a negative impact on healthcare in the sense that it is causing a rapid increase in health care expenditures, and for healthcare providers, considerably more exposure to liability.

Next, Jack McCarthy discussed technology from a risk management perspective, offering some of the Harvard institutions’ collective experiences in the technology arena. McCarthy noted that after investigation, claims are often found to be the result of a system failure. For example, a last-minute change in the surgical operating room schedule may result in a room not being properly set up for the next scheduled surgery.

McCarthy also noted that the Harvard facilities have begun to utilize simulator training for obstetrical and other clinical services with some decrease in claims noted. To round out the approach, RMF offers a premium discount to physicians who participate in a combined regimen of team training, simulator training and continuing education courses.

Joshua Stein presented some thoughts on technology from a professional liability underwriting perspective. In particular, Stein discussed the fact that underwriters are slow to give credit in pricing based on new technologies and procedures, because while those procedures may ultimately improve the quality of care, there is also the likelihood that they will increase the number of claims until appropriate standards of care are established to govern their usage.

Stein also pointed to the tension that exists in hospitals between potential revenue production from new technologies and procedures on one hand, and the cost of training, oversight, risk management and specialization on the other hand, which can lead to claims. For example, some facilities have begun to offer bariatric surgery, which can be a major revenue generator, to patients but may not yet have instituted the requisite policies, practices and procedures to mitigate potential liability exposure.

Finally, Stein opined that the professional liability underwriting community does not do enough to encourage hospitals to implement new technologies that have a demonstrated track record of improving liability exposure. For example, simulator training that allows physicians to practice, and become proficient in, new procedures can be very beneficial to a hospital’s exposure profile, and underwriters should be doing more to encourage their use by giving premium credits and other incentives to the hospital that uses them.

Dianne O’Donnell followed up on the underwriting perspective from an insurance broker’s viewpoint, offering some observations based on discussions with various professional liability underwriters. As examples of how underwriters assess the premium impact on technology, O’Donnell discussed electronic patient records and bariatric surgery. With respect to electronic patient records, it was noted that there is an inherent expectation of better information, improved patient care and consequent reduced loss exposure.

However, there is also the offsetting potential for system failure. As a result, the impact on premium is negligible. Underwriting considerations for bariatric surgery may include such factors as whether the facility is properly equipped, the extent of staff training, a hospital’s motivation in developing the program and the potential health complications often associated with bariatric patients, such as diabetes and high blood pressure.

As a result, a carrier may choose from one of several options ranging from charging additional premium, imposing no change in premium, increasing the underlying retention or excluding coverage altogether.

O’Donnell also discussed teleradiology, which involves creating a radiological image at one location and electronically transmitting it to another location, where it will be read and/or interpreted. Often, the second location is in a different state or country.

One of the biggest concerns expressed by various underwriters is whether the radiologist who is interpreting the image is licensed in the jurisdiction where the image was first taken. If not, a carrier may be unwilling to offer coverage.

Robert Goodson focused on technology from the perspective of defense counsel. In his practice of representing physicians, hospitals and managed care organizations, Goodson has seen an increase in claims for the lack of informed consent due to new technologies. Defending the informed consent claims can be problematic due to the absence of a real standard as to what is a “material risk” for some new technologies.

In addition, the expectation of juries that patients should be fully informed as to the success rate and the risks involved on all new procedures presents another obstacle to the successful defense of these claims. Some claims of informed consent revolve around the lack of experience and training on new procedures and many doctors are reluctant to disclose his or her level of experience, or lack thereof.

Topics Claims InsurTech Tech Underwriting Training Development Medical Professional Liability

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