Medical professional liability underwriters face new environment

Expect new exposures as practitioners replace physicians as supervisors and nanotechnolgy and stem cell research grow

An ever-expanding health care and quasi-health care services environment has placed the role of physicans in a constant state of flux. So, what new exposures will be faced by medical professional liability underwriters over the next 10 to 30 years?

Also, with nurse practitioners and RNs in supervisory positions (instead of physicians) and health care distribution centers popping up in Wal-Mart and Walgreen’s, will there be an impact on the quality of health care?

“The American public has always had high expectations on the quality of health care from doctors,” said Eugenie Shea, principal officer, Catlin, Houston, Texas at a recent Professional Liability Underwriting Society (PLUS ) conference. “However, with more health care extenders such as nurse practitioners and assistants playing a bigger role in the system the quality of health care may change and not necessarily for the better.”

Shea added that as physicians bow out and allow practitioners in, a whole wave of new exposures will emerge.

Claims increase
Lack of supervision of new health care professionals and lack of documentation from physicians were listed as new exposures that would likely increase the number of claims in the future.

“When you have a nurse practitioner in a supervisory role, the underwriter will want to assess that situation in a different way than when a physician is involved. The underwriter will also need documentation for services provided both by the practitioner and the physician. All of these areas are new territory for the underwriter,” said Hal Kinsey, senior vice president, Gallagher Health Care Insurance Services in St. Louis, Mo.

The more medical diagnosis and treatment is transferred to practitioners from physicians the more claims the industry will see, agreed Robert White, president, First Professional Insurance Co., based in Jacksonville, Fla. “Claims will increase because there is a lack of supervision in many of these new settings and lack of documentation about diagnosis and medications given to patients by practitioners,” White said. “This scenario opens up the door to more lawsuits.”

The group agreed that in the end — the physician is still the one who will be called to the witness stand if the diagnosis is incorrect or the medication is not taken as it should have been — because the practitioner is still under his or her supervision.

“Doctors will still remain on the front line in litigation. Physicians need to get up to speed with newer and better electronic technology to keep records not only for themselves but for any other health care professional in their office or clinic. If the doctor employs nurse practitioners and other health care assistants, he or she will need better record keeping for those providers as well,” White said.

Standard coding for all medical records is another area that needs attention, White said. He added that at least medical coding is one area that is moving slowly in the right direction.

Other frontiers that will open up new exposures include nano technology, stem cell research and antibody research, the group said.

The changing role of physicians
Physicians will also pay closer attention to their own “bottom lines” in coming years.

“More focus will be on the financial end of things as physicians view their practices as businesses,” said Craig R. Rowland, vice president of Underwriting, Hospital and Physicians Groups, Fort Wayne, Ind.

“For years they (doctors) have had to deal with insurance utilization reviews, as well as handling the uninsured in emergency rooms and fighting for insurance reimbursement for many new and innovative cancer and cardiology procedures. With all the battling going on the natural next step is to start protect themselves — financially,” Rowland said.

In addition to looking at their practice with different eyes financially, several other factors will have an impact on physicians’ liability.

First, 20 percent of the population will be 65 years old or older by the year 2030. How will that impact doctors and the types of exposures they will face with an aging population?

Second, the number of uninsured in 2007 reached 47 million — will that number increase? Will there be a national health plan in the United States? If so, how will a system that is seeing fewer doctors graduate handle more patients if a national health plan allows more insureds into the system?

Third, the number of physicians going into primary care practice has dropped dramatically since 1998. How will the decrease in the number of primary care physicians impact professional liability issues for doctors as well as patient care overall?

All of these demographics and statistics will have an impact in how professional liability trends and exposures change in the next 30 years.

Alternative medicine
From the quick facelift at the mini-spa to a prescription given by a nurse practitioner at Wal-Mart, to the tattoo parlor — the world of medicine is changing. Many insurance companies are willing to write professional liability risks for these new quasi-medical, alternative markets, but enter at your risk, warns one insurance mogul.

“Everybody else is doing it,” are probably the five most dangerous words in business, according to Warren Buffet of Berkshire Hathaway.

Despite Buffet’s warning, companies are jumping right in.

“More and more companies will be willing to take on these new risks and adapt underwriting principles to the new alternative markets,” said Nicolas Gralton, Guy Carpenter, London. “And the truth is they are not even blinking.”

“Professional Liability — Is It Tougher to Underwrite Now?” was discussed by panelists at PLUS Medical Professional Liability Conference in Chicago, March 13, 2007.

Topics Underwriting Medical Professional Liability