Nationally Medical Professional Liability (medical malpractice) premiums have been flat, declining, or had substantial coverage endorsements added over the past decade. What could bring this to an end and again cause premiums for physicians and hospitals to rise? The conventional wisdom is one if not two critical indicators would have to change. Critical indicator #1 is frequency or the number of medical malpractice suits filed. Critical indicator #2 is Severity or size of losses.
The 2011 year brought some interesting developments. According to Hiscox (super losses in US healthcare on the rise), the frequency of catastrophic claims has increased. For example, there were 6 jury verdicts in excess of $50,000,000 since 2010. Michigan (tri-county Detroit area) saw its single largest medical malpractice verdict when a jury awarded a $144 Million dollars in negligence at birth case. Not to be outdone, Florida saw a $168 Million verdict in January of 2012.
While most industry experts believe the marketplace will continue its consistent pricing model, the delivery of healthcare is expected to continue to evolve into the future. How will the following affect your hospital and/or practice?
- Accountable Care Organizations
- Merger + Acquisition
- Electronic Medical Records
- Healthcare Reform
- Communication with Patients + other Providers
- Social Media
- Private Equity in Healthcare
Each change introduces new risk and could potentially impact frequency or severity. The focus of risk management will continue to evolve and must address the new risks that will be created as the delivery of healthcare continues to evolve.