The New Med Mal Crisis
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The New Med Mal Crisis Where have all the doctors gone?
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The New Med Mal Crisis. Where have all the doctors gone?. Types of Medical Professional Liability(MPL) Insurance. Healthcare Professionals : Commercial carriers Dentists/Oral Surgeons : Smaller specialists and commercial carriers Physicians/Surgeons : Mostly PIAA companies - PowerPoint PPT Presentation
Transcript of The New Med Mal Crisis
The New Med Mal Crisis
Where have all the doctors gone?
IABA Meeting – August 4th, 2012
Types of Medical Professional Types of Medical Professional Liability(MPL) InsuranceLiability(MPL) Insurance
• Healthcare Professionals : Commercial carriers• Dentists/Oral Surgeons : Smaller specialists and
commercial carriers• Physicians/Surgeons : Mostly PIAA companies• Healthcare Facilities : Commercial carriers• Hospitals : Multi-line carriers or self-insurance
trusts
IABA Meeting – August 4th, 2012
About Physician Insurers About Physician Insurers Association of America (PIAA)Association of America (PIAA)
• Formation of PIAA (mid-1970s)• Physician Owned/Operated Carriers• Medical Professional Liability (MPL) Crisis• Availability of MPL Insurance• Policyholder Dividends• www.piaa.us
IABA Meeting – August 4th, 2012
Historical Healthcare Liability Historical Healthcare Liability FocusFocus
• Serve a small customer base• Offer a small number of products• Compete in a small number of venues
…with the coming change in healthcare, does this model still make sense?
IABA Meeting – August 4th, 2012
Premium ComparisonPremium Comparison
Industry Breakdown Medical Mutual Breakdown
Source: SNL Financial Source: Medical Mutual
IABA Meeting – August 4th, 2012
Number of VenuesNumber of Venues
Source: SNL Financial
IABA Meeting – August 4th, 2012
Healthcare Liability OutlookHealthcare Liability Outlook
• For now, financially strong based on recent results.
• Fierce Competition in order to retain business.• Provider Consolidation/Integration.• New and emerging risks from healthcare reform
and consolidation will put pressure on loss ratios.
…PIAA companies will need to adapt to the new reality.
IABA Meeting – August 4th, 2012
Healthcare Reform ImpactHealthcare Reform Impact
• Number of Hospitals/Health Systems Decline : Fewer, larger systems
• Physician Groups Decline : Becoming employees• Managed Care/Health Plans Increase : Moving from
FFS to more of a Managed Care delivery system• Miscellaneous Facilities Increase : Primary Care
facilities needed• Allied Health Professionals Increase : Growth in
nurse practitioners and physician’s assistants• Long Term Care/ Aging Service Increase :
Population ages
IABA Meeting – August 4th, 2012
Effect of Healthcare Reform on Effect of Healthcare Reform on ProvidersProviders• Move from Fee For Service Delivery System
– Few incentives to reduce costs– Health care costs exploding– Costs are primary driver of fiscal deficits for federal,
state, local governments
• Pressure on Providers for FFS– Declining Reimbursements– Cost Pressures– Shift in mix of business (aging population, technology
requirements, etc.)
New system is designed to provide “Population Healthcare”.
IABA Meeting – August 4th, 2012
Advantages of Move to Advantages of Move to EmploymentEmployment
• Better reimbursement rates• More time for patient care• Less time spent on business of practice• Work/Life balance• Health system view as a necessity for “Population
Healthcare”
IABA Meeting – August 4th, 2012
Trend to Employed DoctorsTrend to Employed Doctors
Source: AHA Annual Survey of Hospitals
IABA Meeting – August 4th, 2012
Key drivers for Employed PhysiciansKey drivers for Employed Physicians
Source: Analysis of AAMC-AMA Survey of Physicians Under 50
IABA Meeting – August 4th, 2012
Impact of Hiring Physicians as Impact of Hiring Physicians as EmployeesEmployees• Possible rise in frequency and severity?
– Previously two separate policies, now Hospital and Physician exposure combined.
– Joint-Defense.– Vicarious Liability increased.– Physicians providing care under different venues.
• Controllability– Consent to Settle claims go to economic buyer.– Claims staff understanding of who controls claim.– Collaboration regarding defense of claims.– What to do with tail exposure?
IABA Meeting – August 4th, 2012
Success or Failure within the market Success or Failure within the market will depend on…will depend on…
• Pricing/Reserving• Claims/Risk Management• Continue to provide best Products/Services• Expansion in new Markets/Products
Keith AllenKeith AllenSVP, ActuarySVP, ActuaryMedical MutualMedical Mutual225 International Cr.225 International Cr.Hunt Valley, MD 21030Hunt Valley, MD 21030(800)492-0193(800)[email protected]@weinsuredocs.com
