2006 medical professional liability symposium chicago, illinois ~ march 14 & 15, 2006...

Chicago, Illinois ~ March 14 & 15, 2006

2006 Medical Professional 2006 Medical Professional Liability SymposiumLiability Symposium

Miscellaneous Healthcare Miscellaneous Healthcare FacilitiesFacilities

Risk Mixing and MatchingRisk Mixing and Matching

Miscellaneous Healthcare Miscellaneous Healthcare FacilitiesFacilities

Moderator: Paul GreveWillis Healthcare

Practice

Panelists: Rob JurgelAIG/Lexington

Fran O’ConnellShand Morahan

Leslie MillerNational Specialty

UnderwritersBruce Balck

Arch Insurance Group

Miscellaneous Healthcare Miscellaneous Healthcare FacilitiesFacilities

Defined

• By exception: a broad range of healthcare entities that are not hospitals or LTC facilities

• New types of miscellaneous healthcare facility entities are created every year

Miscellaneous Healthcare Miscellaneous Healthcare FacilitiesFacilities

Examples• Alcohol and Drug Rehab

Ctrs• Ambulatory Surgery Ctrs• Ambulance Services• Blood Banks• Clinical Testing Labs• Diagnostic Imaging Ctrs• Dialysis Ctrs• Drug Testing Services• Home Health Care• Home Infusion Therapy• Hospices

• Lithotripsy Facility• MedSpas• Mobile Radiology Units• Nurse Registries• Outpatient Clinics• Pain Management Ctrs• Pharmacy• Public Health Clinics• Public Health

Departments• Urgent Care Ctrs• Visiting Nurse Assoc

Miscellaneous Healthcare Miscellaneous Healthcare FacilitiesFacilities

Why the Move to MHFs?• Aging Population• Utilization Increasing• Increase in Chronic Illness

By 2010, 70M will have 2 or more chronic illnesses• For Certain MHFs, e.g. ASCs, Physicians Can Achieve:

More Volume Better Reimbursement Convenience Lower Costs

• Competition Between Hospitals and Physician-Owned Specialty Services Will Continue

• Growth in Alternative Therapies Will Continue MedSpas Biofeedback Acupuncture

Chicago, Illinois ~ March 14 & 15, 2006

2006 Medical Professional 2006 Medical Professional Liability SymposiumLiability Symposium

Healthcare FacilitiesHealthcare FacilitiesRisk Mixing and MatchingRisk Mixing and Matching

Rob JurgelProduct Line Officer

AIG Healthcare

Miscellaneous Facilities – Miscellaneous Facilities – Industry AnatomyIndustry Anatomy

• $750M Insurance Marketplace

• 50+ Diverse Classes

• 50,000+ Prospects

• 20+ Insurance Carriers

• 5,000+ Brokers

Distribution – 5 ChannelsDistribution – 5 Channels

• National Brokers

• Retailers – 2nd & 3rd Tier

• Wholesalers

• MGAs

• Associations

Product / Coverage IssuesProduct / Coverage Issues

• Basic Forms – 3 Types• Limit Structure – Dual or Single Aggregates• Coverage Trigger – Incident Sensitive vs.

Demand• Sexual / Physical Abuse Coverage• Practitioner Coverage – Drs & CRNAs• Value Added Features – RM, Claims, Crisis

Management

Key Underwriting IssuesKey Underwriting Issues

• Know the Class• Understand the Exposure

Differences between Classes Differences within Classes (Risk Modifiers) Practitioner Coverage (Drs & CRNAs) Venue Differences Loss Experience Quality of Risk Management (Assessments)

Perception: Everybody Makes Perception: Everybody Makes Money in MF?Money in MF?True / FalseTrue / False

PBM Losses $42M – Changed Formulary to Increase Financial Incentives $23M – Rebating Issues $12M – Resold Returned Drugs

Pharmacy Losses $21M – Adult Version of Drug – Brain Injury$ 4M – Detained Shoplifter – Death$ 3M – Wrong Medication

EMT Losses $10M – Asthma Attack - Driver Lost Key to Drug Box$ 5M – Delayed Response, Cardiac Arrest$ 4M – Improper movement, spinal cord injury

Surgi-Center Losses$20M – Loss of Vision (Highly Paid Professional)$ 4M – Anesthesia - Coma$ 3M – Cardiac Arrest

Everybody makes money Everybody makes money (continued)…(continued)…

Hospice Losses $8M – Negligent Care in Nursing Home$3M – Negligent Care$3M – Hired and Non-owned Auto (accident)

Medical Lab $6M – Failure to Detect Cervical Cancer$3M – Failure to Detect Down Syndrome (4 claims)$2M – Failure to Detect Cancer (8 claims)

Behavioral Health$5M – Improper Restraint - death$5M - Failure to Monitor resident – elopement – murder$3M - Failure to monitor – suicide

Dialysis Losses $8M – Exsanguinations (bleed out)$2M - Exsanguinations (bleed out)$1M - Fall / injury

The Big Secret of Underwriting The Big Secret of Underwriting MF Business Successfully?MF Business Successfully?

Charge 25% less than the expiring carrier?

Offer a low premium but make it up on volume?

Charge the Correct Rate for the Exposure!

Chicago, Illinois ~ March 14 & 15, 2006

2006 Medical Professional 2006 Medical Professional Liability SymposiumLiability Symposium

Healthcare FacilitiesHealthcare FacilitiesRisk Mixing and MatchingRisk Mixing and Matching

Fran O’Connell

Vice President

Shand Morahan & Company

Healthcare Facilities Risk Healthcare Facilities Risk Mixing and MatchingMixing and Matching

• What else Is influencing the Healthcare Marketplace?

Advertising/MediaAdvertising/Media

• Nip & Tuck, don’t break a sweat results

• A Pill to improve your lifestyle

Who is being treated?Who is being treated?

• Consumer as Patient

• Consumer’s Concerns Cost Quality Time/Choice Service

What do What do www.getdrugs.comwww.getdrugs.com, , Telemedicine, Matchmakers Telemedicine, Matchmakers

have in common?have in common?

1. They’re scary

2. They’re coming and here to stay

3. Alternative delivery system for drug and/or medical services

New Medical RisksNew Medical Risks

• Telemedicine/e-Health

• Anti-Aging

• Bariatric Surgery

• Pain Management

• New Specialties/Expansion of roles

• Providers who are “bare”

Other Exposures “Creeping” Other Exposures “Creeping” into MPL Risksinto MPL Risks

• “Investigational” Drug Therapies• IT Exposures

Record, transmit and interpret data

• Multiple State or Country Operations• Life Sciences

Molecular medicine Implantable

• Privacy Issues

Coverage ConsiderationsCoverage Considerations

• Claims Made Professional Liability

• Claims Made Professional and General Liability

• Claims Made Professional and Occurrence General Liability

• Deductibles/SIRs• Defense

Inside Limit Outside Limits

• Prior Acts• Coverage trigger

options• Consent to Settle• Territory

ClaimsClaims

• Yes, we get CLAIMS

Surgicenter ClaimsSurgicenter Claims

• Surgicenter becomes deep pocket

• Eye Surgeries Failure to screen (optometrist) Failure to calibrate (technician)

• Emergency Procedures

Medi-Spa ClaimsMedi-Spa Claims

• Laser Hair removal Burns

• Micro-pigmentation Infections

• No Informed Consent

• Allergic Reactions

Chicago, Illinois ~ March 14 & 15, 2006

2006 Medical Professional 2006 Medical Professional Liability SymposiumLiability Symposium

Healthcare FacilitiesHealthcare FacilitiesRisk Mixing and MatchingRisk Mixing and Matching

Leslie Miller

Senior Vice President

National Specialty Underwriters

A Rose By Any Other NameA Rose By Any Other Name

• Ancillary Healthcare

• Spec (specified) Med

• Miscellaneous Medical

Defined By What Defined By What It Is NotIt Is Not

• NOT a provider

• NOT a hospital

• NOT long term care

Miscellaneous HealthcareMiscellaneous Healthcare

• Adult Day Care Centers• Ambulance Companies

(excludes auto liability)• Banks• Cancer Centers (Radiation

Oncology)• Clinics• Community Health Centers• Correctional Medicine• Dialysis Centers• Family Planning• Home Health Agencies• Hospice Care• Imaging Centers• Labs• Lithotripsy• Long-Term Care

• Medical Spas• Mental Health• Nurse Staffing• Perfusion/Auto transfusion• Pharmacies• Product Liability (medical

products only)• Public Health Dept.• Schools• Social Services• Sleep Centers (Apnea)• Social Services• Staffing• Surgery Centers• Therapy• Trauma Rehab

Why All of the Fuss?Why All of the Fuss?

• Surgical Centers – more than 5,500 ASC’s

• Imaging Centers – more than 2,800 facilities

• Home Health Care – more than 11,000 agencies

• Medical Labs – more than 5,000 laboratories

MarketsMarkets

Ace Admiral AIG

Arch CNA Colony

Darwin Evanston GenStar

Hudson Interstate James River

Lloyd’s of London

NAS One Beacon

RSUIUnited

NationalZurich

Surgery CenterSurgery Center

Surgery Center located in Midwest

• Performs bariatrics

• Performs plastic

• $1M / $3M limits

• Prior acts

A Rated Market QuotesA Rated Market Quotes

• Carrier A: $184,000Carrier A: $184,000 $20,000 deductible$20,000 deductible

• Carrier B: $210,000Carrier B: $210,000 $25,000 deductible$25,000 deductible

• Carrier C: $514,867Carrier C: $514,867 $25,000 deductible$25,000 deductible

Social ServicesSocial Services

Social Services located in Florida

• Child Welfare Services

• Package PL/GL

• $1M / $3M

• Claims Made Year 3

A Rated Market QuotesA Rated Market Quotes

• Carrier A: $26,500Carrier A: $26,500 $10,000 deductible$10,000 deductible

• Carrier B: $125,000Carrier B: $125,000 $10,000 deductible$10,000 deductible

• Carrier C: $200,000Carrier C: $200,000 $10,000 deductible$10,000 deductible

Market Selection Market Selection

• Class of business

• Venue

• Minimum premium requirements

• Glamour do’s and don’ts by carrier

Improving YourImproving Your Success Rate Success Rate

• A complete application, with a supplement to be certain that you have all of the information

• Understand what really goes on inside the box

• Know your client’s growth strategy

Pick TwoPick Two

Lowest Premium

Broadest Form

SpeediestUnderwriting

Chicago, Illinois ~ March 14 & 15, 2006

2006 Medical Professional 2006 Medical Professional Liability SymposiumLiability Symposium

Healthcare FacilitiesHealthcare FacilitiesRisk Mixing and MatchingRisk Mixing and Matching

Bruce Balck

Director – Risk Management

Arch Insurance Group

Risk ExposuresRisk Exposures

• Mail-Order Pharmacy

• Ambulatory Surgery

• Dialysis

• Ambulance Services

• Home Health/Hospice

Mail-Order Pharmacy Mail-Order Pharmacy

• Operations: Pharmacist involvement Bar coding Process of clarifying orders Computer Screens/Verification/Photograph Systems to track errors

• The Patient: 24/7 Pharmacy Support Patient Instructions (easy to read)

Ambulatory SurgeryAmbulatory Surgery

• Patient Selection (Risk Factors)

• Staffing competency

• Procedure Appropriate for setting

• Standards of Care Infection Control Monitoring modalities Anesthesia*

Propofol – New Frontier?Propofol – New Frontier?

• It’s an anesthetic• Short acting

sedative effect • Dangers;

Loss of airway reflexes

Oxygenation Aspiration Bradycardia Hypoxia

The Issue/Debate?The Issue/Debate?

• RN’s administering in: Diagnostic Centers Surgical Centers Doctor’s Offices Emergency Rooms

• Patient lose their respiratorydrive without warning

• Supporting airway until the medication “wears off”• No antidote – “Tincture of Time”• Airway management

Must be able to intubate

HemodialysisHemodialysis

• Replaces normal kidney filtration• Causes:

Acute: Trauma, Surgical Complications, blockage to blood vessel

Chronic: Hypertension, Diabetes

Risks of DialysisRisks of Dialysis

The ‘typical’ side effects: Infection, anemia, nausea, headaches, hypotension, etc.

• Electrolyte imbalance• Cardiac arrhythmia• Air embolism• “Bleed-outs”:

Pressure Alarms ‘off’ Lack of vigilance

• Failure to flush Dialyzer (filter) of cleaner (re-use) properly.

• Re-use; Infection/Verification • Falls

Ambulance – Airway Ambulance – Airway Management Management

The Issue: Dislodging the ‘ET’ during transport!

• Primary and Secondary Verifications

• Document placement (ET) during and after transfer.

• Skill set – Practice

Dislodged AirwayDislodged Airway

• Grip-ET • Prevents ET dislodgment for patients who must be moved and transported while intubated.

• Cost: $3.69

CO2 SensorCO2 Sensor

Provides a breath-by-breath indication of exhaled CO2.

No airway = No CO2

Esophageal/Tracheal AirwayEsophageal/Tracheal Airway‘Combitube’‘Combitube’

• Inserted “blindly” and ‘seals’ the oral and nasal pharyngeal cavities.

• Functions in either the trachea or esophagus.

• Normal and abnormal airways

• ‘Trapped’ patients

Home Health/HospiceHome Health/Hospice

• Background Checks• Supervision• Chain of Command/Communication• Job performance evaluations• Skill set that matches job function*

(*Trend towards using more non-licensed personnel)

Home Health Nurse Negligent Home Health Nurse Negligent in Airway Managementin Airway Management

9 Month Old ‘Vent Dependent’ with Trach

• Panic when trach plugged• Failed to follow procedure• 19 minute delay

$2.5M Award$2.5M Award

The Outcome:

• Brain Damage – Died 28 Days later• $2.5M (with an annuity)

Key Elements:

•Training/Experience• Lack of supervision

Miscellaneous Healthcare Miscellaneous Healthcare FacilitiesFacilities

Paul GreveWillis Healthcare PracticeGreve_pa@willis.com615 872 3320

Rob JurgelAIG/LexingtonRobert.jurgel@aig.com617 772 4534

Fran O’ConnellShand Morahanfoconnell@markelcorp.com847 572 6118

Leslie MillerNational Specialty Underwriterslmiller@nsui.com312 924 2819

Bruce BalckArch Insurance Groupbbalck@archinsurance.com651 855 7127

Chicago, Illinois ~ March 14 & 15, 2006

2006 Medical Professional 2006 Medical Professional Liability SymposiumLiability Symposium

Miscellaneous Healthcare Miscellaneous Healthcare FacilitiesFacilities

Risk Mixing and MatchingRisk Mixing and Matching