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Q&A: What's trending in healthcare

Katie Caldwell, vice president of allied healthcare, and Correne Dean, director of allied healthcare, took full advantage of the networking opportunities and education panels while discussing the future direction of the industry and the latest developments in healthcare and medical professional liability. Eric Paynter, president of healthcare, interviews Katie and Correne about their experience at the symposium and they offer insight into how the latest trends create both challenges and opportunities for agents.
 

 

Eric: What changes have you seen across the healthcare and medical professional liability industry over the last year?

Katie: We’ve seen a number of changes across the industry, one being a significant escalation in judgments against healthcare providers. Just last year, there were 57 medical malpractice verdicts exceeding $10 million, with 10 of those surpassing $25 million. While hospitals account for a portion of these cases, other healthcare organizations, such as orthopedic groups and nursing homes, have also faced substantial judgments. We’ve seen figures reaching as high as $677 million. At �����, we have also seen a rise in both the frequency and severity of claims within our own medical malpractice book, which aligns with the industry-wide trend. 

Correne: The increased utilization of third-party litigation funding is a big change impacting the healthcare and medical professional liability industry. The amount of money being invested in litigation financing is staggering, amounting to billions of dollars, and we know that private equity firms are reaping substantial returns from these investments. Reports indicate that the returns on litigation financing are greatly surpassing the returns seen in other sectors like private equity real estate, credit and hedge funds. This leads to many frivolous and meritless cases and is causing organizations to have to divert resources to lawsuit-related activities. It can even result in organizations�� reputations taking a hit in the court of public opinion. 

 

 

Eric: What topics do you think will continue to be top-of-mind throughout 2024, and what are the insurance implications that agents should be aware of for their clients?

Correne: Staffing shortages and the aging population of physicians will continue to be top of mind in healthcare as the industry is dealing with major staffing shortages and skill gaps, particularly with pharmacists, nurses and employees at nursing homes. These shortages can lead to increased patient wait times, decreased quality of care and workforce burnout. This can impact patient care, safety and overall healthcare costs. From an insurance perspective, these staffing shortages can lead to lesser quality of care, a diminished patient experience, and errors or mistakes, resulting in professional liability claims. These shortages are only going to worsen because fewer students are choosing to study healthcare—it’s expected that there will be a shortage of 3.2 million healthcare workers by 2026.

Katie: Speaking of shortages, we are facing a significant shortage of certain prescription medications, causing disruption in supply chains, hospitals and pharmacies. Switching between drugs is not an easy solution, as it often requires a change in treatment regimens, which can lead to different outcomes and potential side effects. This can impact patients' overall well-being and the effectiveness of their treatment, and also has an impact on their overall perception of healthcare. On a related note, certain medications are being highly marketed on social media, compounding the shortage issues. When patients are not able to get the medication they need, some turn to social media to express their frustrations. This further influences public perception of healthcare, which has already been declining in recent years due to shortages like this, staffing challenges, documentaries and media casting the industry in poor light.

 

Eric: Given what was discussed at PLUS, what do you see as a key challenge or opportunity for agents in the healthcare space? 

Katie: One key challenge is the current soft market. Most accounts are going out to market at renewal, which can lead to resource constraints. Coverage is more readily available as carriers are re-entering the healthcare space and premiums are highly competitive. But this actually presents an opportunity for agents to help clients understand the importance of selecting appropriate, sustainable coverage from a financially strong, stable carrier that’s committed to healthcare risks through all market cycles. As claims frequency and severity continue to grow, carriers that quickly entered the space may start to leave just as rapidly. 

Correne: There’s an opportunity for agents to help clients address new or evolved risk from medical technology advancements. We’ve seen innovations in surgical procedures, the rise of minimally invasive surgeries and the growth of telehealth. This has led to increased accessibility and convenience of outpatient care. But as clients have introduced new technologies into their operations, they may also be introducing new risks that they may not realize. 

 

Eric: How can agents engage with partners like ����� to navigate evolution in healthcare?

Correne: With the healthcare industry growing in complexity, it's even more important for agents to partner with carriers that actively help clients understand and mitigate risk. ����� has a team of experienced, in-house risk management experts who can provide firsthand knowledge and actionable strategies to address risk head-on and help lessen the likelihood of a malpractice claim for a healthcare client. Additionally, we offer free online risk management training courses that can help ensure quality care for patients. 

Katie: Beyond risk management, the quality and tenure of our dedicated claims team is second to none. We’ve talked about how healthcare organizations are often targets of litigation, and many claimants in this space can have multiple ailments, which can complicate potential claims. Our specialized claims team has years of experience working in this space and is staffed with experienced medical malpractice attorneys and adjusters with clinical capabilities. These experts also pay close attention to what’s going on in the industry, and regularly attend continuing education classes. Finally, we also have a strong network of attorneys who specialize in medical malpractice, providing enhanced protection for clients.