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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
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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 • Healthcare Facilities : Commercial carriers • Hospitals : Multi-line carriers or self-insurance trusts
About Physician Insurers 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
Historical Healthcare Liability Focus • 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?
Premium Comparison Industry Breakdown Medical Mutual Breakdown Source: SNL Financial Source: Medical Mutual
Number of Venues Source: SNL Financial
Healthcare 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.
Healthcare 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
Effect of Healthcare Reform on Providers • 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”.
Advantages of Move to Employment • 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”
Trend to Employed Doctors Source: AHA Annual Survey of Hospitals
Key drivers for Employed Physicians Source: Analysis of AAMC-AMA Survey of Physicians Under 50
Impact of Hiring Physicians as Employees • 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?
Success or Failure within the market will depend on… • Pricing/Reserving • Claims/Risk Management • Continue to provide best Products/Services • Expansion in new Markets/Products
Keith AllenSVP, ActuaryMedical Mutual225 International Cr.Hunt Valley, MD 21030(800)email@example.com