Although there is uncertainty about the affect the Affordable Care Act (ACA) will have on medical malpractice insurance, experts use demographic and health industry trends to predict how medical malpractice could change. According to Insurance Journal, the forecasts were presented at the Casualty Actuarial Society’s Seminar on Reinsurance in New York. The session was titled “The Impact of the Affordable Care Act on Medical Professional Liability – an Update”.
Elke Kirsten-Brauer, executive vice president and chief underwriting officer of MGIS, a national insurance program manager for medical professional, said that medical malpractice claims will increase simply because more people have signed up for insurance. She noted that more than 22 million people will gain health insurance within a few years; seven to eight million signed up using exchanges through early April. Previously, about one-quarter were uninsured. Kirsten-Brauer says that the issue will be worsened by the fact that many are not familiar with the healthcare system. “We need to educate them” on issues that may seem minor, she said.
Experts also pointed out that there is less and less doctor-patient interaction. This is an important trend that drives up the number of claims. Casualty actuary Kevin Bingham of Deloitte Consulting describes the hospitalist, a new sort of doctor who monitor the hospital stays of patients, as a prime example. In the past, this job would have been performed by the patient’s physicians. The hospitalist is part of a new model, where patients are treated by several different professionals rather than a single one. This is part of an accountable care organization, or ACO.
The Affordable Care Act has contributed to the rapid rise of ACOs. According to Bingham, this model presents a new set of medical malpractice risks. Because patients are constantly being seen by many different professionals, they lose a personal relationship with the medical community. “That’s how most med mal claims start,” said Bingham, “with a loss of connection with the patient.”
Across the country, hospitals are buying small physician practices and reforming them into ACOs. This leads to a lower market for medical malpractice insurance for physicians. Instead, hospitals absorb most the risk, said Brian Ingle, an executive vice president at Willis Re and Fellow of the Casualty Actuarial Society. This leaves insurers to compete more for malpractice premiums. Ingle also pointed out that ACO will lead to standardized treatment methods. Although they will most often be sound, there may be a situation where a standard treatment will be lead to harm. Deep-pocketed hospitals may be found liable if this happens. In light of this, insurers may expand their medical malpractice coverage to include exposures usually left to errors and omissions or directors and officers policies.
Experts noted important demographic trends that will affect medical malpractice as ACA is implemented. This includes:
- An aging population, which leads to more complaints in a system that is already overburdened
- Aging physicians who want to reduce workloads are shifting from a 60 hour work week to 45 hours or so
- Americans are gaining more weight, leading to a rise in diabetes and joint ailments
Bingham said that these trends likely predict higher med mal exposures.