MPL Insurance

Artificial Intelligence (AI)-Generated Healthcare Content; Understanding the Limitations

By Kaelin O’Reilly, ProAssurance communications specialist

Artificial intelligence (AI), including chatbot tools like the popular ChatGPT, has made possible many useful applications in the healthcare sphere. ChatGPT’s ability to generate human-like responses to natural language inputs has made it an attractive tool for professional and student writers.1 The application can help develop quality and informative content in the form of articles, reports, blogs, tweets, and emails.2 This content may be produced in less time than traditional writing, and the burden of arduous research tasks can be reduced. In the fields of medicine and science, healthcare providers, researchers, and academics can access valuable medical education; supplement record documentation; and produce journal articles, clinical studies, and research papers with assistance from the tool.1

ChatGPT’s natural language processing model builds on older technologies of speech recognition, predictive text capability, and deep learning.3 It can function as a search engine, providing direct responses to user queries by applying specific criteria to locate appropriate resources. ChatGPT can aid in topic generation and provide translation for some medical and technical jargon. Because its algorithm is “trained” on a robust dataset of conversational text, the tool can address and generate practical written responses for a broad range of prompts, capturing many of the nuances and variations unique to human speech. It can also present language that is clear, easy to follow, often eloquent, and in the appropriate, specified structure.1

While AI tools like ChatGPT present significant advantages for writers, these applications are not without shortcomings. AI-generated content raises the following concerns4:

  • Authorship and Accountability
  • Inaccuracies and Errors
  • Biases and Prejudices
  • Lack of Regulations, and Privacy and Security
  • Dependence and Job Displacement

Moreover, developing and fine tuning the ChatGPT algorithm necessitates the collection and analysis of huge volumes of text data across the internet. Notably, these data collections have been relatively sporadic, with the last two collections covering information only up to September 2021, then up to April 2023 with its newer model. This may result in the information generated by ChatGPT being erroneous or out of date, or perpetuating an incomplete or distorted picture of the subject matter.1,5 Misinformation may be overlooked or unknown, and inadvertently passed on in published work.2 As AI implementations become even more commonplace, both readers and writers should be mindful to question the validity and reliability of content and familiarize themselves with the functional limitations of chatbots like ChatGPT.1

The Limitations and Concerns of ChatGPT-Generated Content

Authorship and Accountability

AI-generated content invites questions about authorship and accountability and, specifically, whether tools like ChatGPT should be applied in research and writing, including healthcare works. Credit for published material has traditionally been given to the individual contributors for their work in applying intelligence to idea generation, research and analysis, design, and execution. It is suggested that definitions of authorship may need to be revisited and specified, considering use of ChatGPT and other AI tools in the healthcare ecosystem is only growing. However, most journals will not allow designation of ChatGPT as an author, suggesting that although the tool does mimic human thought progression and language, create a logical and well-developed piece of writing in an appropriate format, it may not have the capability to produce information that is 100% reliable. As AI is non-human, it cannot be held responsible for its content in the same way as individuals with intention and legal obligations.1,4

Supporting the argument of accountability is an acknowledgment of the continued need for human intervention with use of these tools, despite their impressive capabilities. Specifically, processes like editing and applying reason and specialized expertise lie beyond the product’s scope of training but are nevertheless essential in writing It may be acceptable, however, and even beneficial for writers to include references to such AI tools along with the other resources they have used in the development of their work. Doing so might establish greater transparency while allowing the author to claim appropriate responsibility for the validity of their content. Further, such citations may bring awareness to the merits of AI resources like ChatGPT as supplemental assistants to the research and writing processes.1,4

While AI algorithms evolve with new and expanding data collections, opportunities for misuse and plagiarism emerge. In one study, plagiarism detection software and detection tools used to identify AI-generated content (“AI output detector”) were applied to 50 research abstracts that were generated solely by ChatGPT. The ChatGPT had created these abstracts following its review of excerpts from journals like JAMA and The New England Journal of Medicine. The plagiarism detection software found no plagiarism by ChatGPT, while the AI-output detector recognized only 66% of the abstracts as being AI-created. It is encouraging that ChatGPT was not found to have plagiarized the journal articles. However, as ChatGPT seemed to be able to pass through the AI-output detector checks with relative ease, it may be deduced that an individual reader would be unable to make the differentiation.1

Inaccuracies and Errors

Accuracy and reliability of text generated by AI models depend on the quality of data used in training the models. ChatGPT, like any AI model, may have errors or biases built into its core algorithm and, as a result, its output based on these inaccuracies will sometimes be incorrect.1 Language models are inherently intricate, complex, and potentially difficult to understand. A user may lack the foresight or knowledge necessary for gauging the correctness of an AI-generated answer or spotting specific errors, especially if the user is not aware how the tool arrived at these conclusions.4 There may be ambiguities in the user’s prompt or question (i.e., vague wording, meandering, or unfocused speech), resulting in an answer that is in turn, also ambiguous.1 In addition, using preset calculations to parse through data and elect the “best” answer in mere fractions of a second—even when there is no clear or easy answer available—can result in incomplete, skewed information. These types of outputs, known as AI “hallucinations,” are presented as factual but are really more of an improvised best guess generated by the chatbot, and have a high potential for inaccuracy.6

ChatGPT has a limited ability to apply deductive reasoning in its approach to answers, or to deconstruct and prioritize answers to layered questions. It can have trouble inferring underlying meanings or handling complex, “niche” topics. This weakness becomes even more challenging in detailed areas of science and medicine, which require subject matter expertise and an acute awareness and ability to analyze the constant changes and developments characteristic of these fields. Though ChatGPT is skilled in performing some language translation and adjustment to make medical conditions and treatment terminology more digestible for the average person, the tool may have a hard time interpreting or “understanding” certain medical phrases or jargon specific to a lesser-known subject or subspecialty.7

Biases and Prejudices

Data used in the development of AI algorithms may be limited to over- or under-represent certain groups, genders, ages, races, and cultures.8 A close examination will reveal that this overgeneralized and unbalanced data base fails to properly include certain populations. Therefore, the results from AI chatbots may be unreliable as applied to those groups. The potential biases and discriminatory attitudes that may be apparent in data collected across the web, and that inform the outputs generated by tools like AI chatbots, reflect not only society’s culture but also the potential culture of technological innovators of the AI-assisted product. A lack of diversity among these teams, as well as collective misconceptions or prejudices can become “embedded” in product development, meaning that product may exclude sizable groups of the population. As well, an unintentional flaw in the product design or in the algorithm’s data input can also yield such biases. These biases perpetuate when AI presents flawed conclusions to users, who may rely upon and pass along that skewed information. Large, varied groups and underrepresented communities should be included in research studies, to effectively create more diverse training sets for new algorithms. Doing so will allow ChatGPT and similar tools to provide a more valuable application that generates more accurate, reliable, and inclusive results.9

Lack of Regulations; Privacy and Security

Training of algorithms for ChatGPT and other chatbot implements incorporates access to extensive datasets, which may potentially include health information, particularly if the AI tool is utilized across healthcare facilities through sharing of patient information. Of course, a concern with utilizing health information is the privacy and security of the details within that gathered data, which may be vulnerable to hackers and data breaches. When the underlying data for an AI algorithm contains health information of an actual person, utilizing only properly de-identified data that does not contain protected health information of any individual will avoid violations of HIPAA and breaches of privacy. With no universal guidelines in place to govern the use, efficacy, implementation, and auditing of newer AI tools like ChatGPT in the healthcare sector, legal and ethical debates circulate around the handling and quality of data, patient consent, and confidentiality. A lack of clarity about data models and algorithms plus inadequate training on the user functions of AI equipment invite warranted skepticism and present a need for greater transparency and education across healthcare organizations. It is suggested that collaboration among AI innovators, security experts, and policymakers, as well as healthcare clinicians and providers, is necessary for the development and implementation of rules, regulations, and guidelines to address these novel issues of transparency and security and provide a smoother integration of AI into clinical practices. Specifications in these guidelines could include restrictions on data usage and the sharing of information and impose quality control measures for de-identification, encryption, and anonymization. These specifications would help ensure privacy and security, while maintaining quality of patient care and compliance with existing national healthcare regulations.8,9

Dependence and Job Displacement

There does exist a concern for dependence and overreliance on AI-assisted tools, especially if their algorithm models are flawed, contain biases, or are simply outdated. Leaning too heavily on these tools can result in missed errors, and a complacency around fact checking and quality assurance for documentation and other important practical applications in healthcare. Regarding the production of healthcare and scientific-related written content, it holds that creativity, personal experience, and an individual voice contribute to quality and originality. The potential for overreliance on AI causes deep concern that these attributes may be lost using a tool like ChatGPT. Content generated through a chatbot should be reviewed and edited for factual merit, quality, grammar, consistency, and timeliness. While AI technology advances in functionality and versatility, researchers and writers may fear job loss or a reduction of employment opportunities. However, the elements common to valuable written pieces illustrate integral contributions that can only come from individual authors: demonstrated depth of knowledge, critical and applied thinking, anecdotes and specific deductive reasoning, and a personal connection to the audience. These are human attributes that cannot be fully replicated or recreated by any technology. ChatGPT and other chatbot tools currently work best alongside humans, serving as resources and tools, making the processes of writing and research smoother and more manageable.4,8

References

1. Tirth Dave, Sai Anirudh Athaluri, Satyam Singh, “ChatGPT in Medicine: An Overview of Its Applications, Advantages, Limitations, Future Prospects, and Ethical Considerations,” Frontiers in Artificial Intelligence 6 (May 4, 2023), https://www.frontiersin.org/articles/10.3389/frai.2023.1169595/full.

2. Jodie Cook, “6 Giveaway Signs of ChatGPT-Generated Content,” Forbes, Dec. 6, 2023, https://www.forbes.com/sites/jodiecook/2023/12/06/6-giveaway-signs-of-chatgpt-generated-content/?sh=10b8c9181e7d.

3. “The Benefits of AI in Healthcare,” IBM Education, July 11, 2023, https://www.ibm.com/blog/the-benefits-of-ai-in-healthcare/.

4. Alexander S Doyal et al., “ChatGPT and Artificial Intelligence in Medical Writing: Concerns and Ethical Considerations,” Cureus Journal of Medical Science 15(8) (August 10, 2023), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10492634/#:~:text=Some%20suggested%20uses%20of%20ChatGPT,in%20the%20writing%20of%20medical.

5. Aaron Mok, “ChatGPT Is Getting an Upgrade That Will Make It More Up to Date,” Business Insider, Nov. 6, 2023, https://www.businessinsider.com/open-ai-chatgpt-training-up-to-date-gpt4-turbo-2023-11#:~:text=ChatGPT%20users%20will%20soon%20have,at%20its%20first%20developer%20day.

6. Sindhu Sundar and Aaron Mok, “How Do AI Chatbots Like ChatGPT Work? Here’s a Quick Explainer,” Business Insider, Oct. 14, 2023, https://www.businessinsider.com/how-ai-chatbots-like-chatgpt-work-explainer-2023-7.

7. Bernard Marr, “The Top Limitations of ChatGPT,” Forbes, Mar 3, 2023, https://www.forbes.com/sites/bernardmarr/2023/03/03/the-top-10-limitations-of-chatgpt/?sh=5b49a2158f35.

8. Josh Nguyen and Christopher A. Pepping, “The Application of ChatGPT in Healthcare Progress Notes: A Commentary From a Clinical and Research Perspective,” Clinical and Translational Medicine 13(7) (July 2, 2023), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10315641/.

9. Bangul Khan et al., “Drawbacks of Artificial Intelligence and Their Potential Solutions in the Healthcare Sector,” Biomedical Materials & Devices 1-8 (Feb. 8, 2023), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9908503/.

Originally posted in ProVisions, reposted with permission

Note: This article is for informational purposes only and should not be considered as insurance advice related to your specific policy or situation. Please consult with a qualified insurance advisor or professional before making any policy decisions. Full disclaimer and contact information.

Log in to the new IPFCF portal to ensure compliance

By The WisMed Assure Service Team

The Injured Patients and Families Compensation Fund (IPFCF) has implemented a new policy and administration system. The new system allows participants to review correspondence from IPFCF and pay their bill online.

Currently all carriers have access to file certificates of insurance on behalf of their insureds. Participants will be onboarded in phases and should check the IPFCF website and watch for an email regarding the timeline for getting access to the new system.

The new provider portal can be accessed at ipfcfsecure.oci.wi.gov. The IPFCF encourages physicians to log in and provide their personal email address. Click here for IPFCF provider portal instructions. For assistance logging into the new system or other questions, please contact the IPFCF at 608.360.8001 or via email at OCIIPFCF@wisconsin.gov.

Don’t forget to call your mom, and your insurance agent

By WisMed Assure Service Team

With the intention of easing administrative burden for WisMed Assure client physicians, several of our Medical Professional Liability (MPL) carriers have significantly reduced or suspended asking for renewal applications over the past few years. While this does save time, renewal applications were an opportunity to touch base, review and discuss any changes to your practice that could impact your premium or coverage.

Please contact WisMed Assure if any of the following changes have occurred or are anticipated in your practice:

  • Have any health care professionals changed practice procedures, such as added or reduced surgical procedures?
  • Have you contracted with any independent health care professionals to provide services?
  • Are any physicians changing their practice hours? How many hours per week are they working now? 
  • Have you added or changed your use of telemedicine? 
  • If you are a Wisconsin Medical Society Member with Medical Professional Liability coverage through ProAssurance, you can earn premium credit on your renewal by completing their online risk management coursework. If you are not a member and would like to become one, please let us know.

Contact your agent or insurance@wismedassure.org 608.442.3810 with any questions or changes to your practice.

WisMed Assure is the Wisconsin Medical Society’s insurance agency – profits earned support the mission of the Medical Society.

WisMed Increases Your MPL Choices

More options available even while insurers brace for uncertainty

By Shawna Bertalot, CIC, ACI, President WisMed Assure

A recently published report by A.M. Best says medical professional liability (MPL) insurance providers continue to experience decreased profitability. The rating firm is maintaining its negative rating for the segment and reports a growing amount of uncertainty due to potential increases in claims coupled with premium refunds, both stemming from the COVID crisis.

Even before COVID-19 swept through the country, the market was hardening – which means premiums were on the rise and terms and conditions were become more stringent. (See September 2019 Antidote Article “History Repeats Itself”)

While insurance companies continue to assess what their products cover and the cost of coverage, governments are introducing new laws that can directly and indirectly impact risk and insurance. It is a constantly evolving situation which we are closely monitoring.

To better serve the medical profession, our team has sought out alternative carriers and products to ensure you have the greatest amount of choice possible. Some of the new options we provide are directly related to the changes care givers have had to make due to the coronavirus.  (E.g.: Retired physicians returning to work have new options. Physicians who have increased their telemedicine activity have new options.)

Exploring Options:  What to Look For

When choosing an MPL insurance policy, or when replacing or updating your existing policy, it is easy to put too much focus on premium costs. That is certainly understandable, but it is not the only criteria you should be basing your decision on.  The most important thing to focus on is choosing the broadest coverage with a financially strong insurance carrier dedicated to the MPL market and excellent track record in claims handling.

Your Best Bet

To get what you need, and feel confident about the decisions you make, your best bet is to work with an experienced insurance advisor. The WisMed Assure advisory team has many decades of experience and a commitment to be your financial partner for life. We know your world because we only serve physicians and medical professionals. Plus, we are in it for the long haul as our profits contribute to The Wisconsin Medical Society’s ability to fulfill its mission: To improve the health of the people of Wisconsin by supporting and strengthening physicians’ ability to practice high-quality patient care in a changing environment.

If you have questions, want to learn more, or concerns to address, contact WisMed Assure today.

shawna.bertalot@wismedassure.org

608.442.3738

Shawna Bertalot is the president of the WisMed Assure agency. With her strong leadership skills and knowledge of the industry, our skilled team of agents are motivated and well prepared to find solutions for our clients.

MPL Market + COVID-19 = What Next?

How the pandemic may impact an already hardening market

Consider the degree of uncertainty COVID-19 has introduced while reading this statement by Tom Baker, a University of Pennsylvania Law School professor.

Baker says, “understanding how insurers define cost is, key to understanding the insurance under-writing cycle… when insurers set their prices, most of the costs of the insurance coverage will be incurred only in the future. As a result, insurers constantly have to imagine the future to decide how to price their products today. This situation creates a remarkably high degree of uncertainty. This uncertainty about insurance costs is the fuel that drives the underwriting cycle.”

Baker’s statement was published in a three-part Antidote series on the hardening of Medical Professional Liability (MPL) insurance market months before the world was turned upside down by the pandemic we are still finding our way through.

At the time, no rate-making actuary could imagine a worldwide pandemic would cause such a massive disruption of healthcare delivery, consume the energy and resources of the healthcare system while simultaneously causing many physicians, clinics and hospitals to incur an unprecedented loss of patients and revenue. And it is not over yet.

Underwriting is “stressed out”

The COVID-19 crisis will add pressure to an already “stressed out” underwriting environment. On a macro level, MPL insurance carriers are experiencing higher loss ratios that force increased premiums and more judicious underwriting in an effort to lower claims costs. This is what is referred to as a “Hard Market.” Carriers are now responding to demands of COVID-19 with premium relief and underwriting flexibility (e.g. waiving requests for supplemental information on telemedicine or cross-state boarder practice). This lowers their premium base and handicaps underwriting. The story becomes much more complicated when you consider insurance carriers are collecting premiums now to pay claims that will be made in the future. 

Susan Forray, FACS, MAAA, Principal and Consulting Actuary with Milliman, published an article in May in which she examines the complexity of the COVID-19 impact, writing, “Actuaries are accustomed to pricing future costs based on past losses. But the COVID-19 pandemic has taught us the past is only one piece of data in making these estimates. Modeling the coronavirus pandemic itself is difficult, but modeling MPL costs affected by this pandemic is exacerbated by tort law changes, variations in effect among specialties, and an apparent reduction in current claims that may prove to be only a delay contributing to an increase in future claim frequency.”

What should you do now?

Continue to look for stability and security by renewing your coverage with a financially strong insurer; a long-term player committed to the MPL insurance marketplace. This is where an experienced broker can play a key role in helping you understand the quality of the insurers willing to do business with you and help you navigate your options.

“In this environment, I’ve never been more acutely aware of our mission at the Wisconsin Medical Society and WisMed Assure and I am proud of how we and our community of physicians have responded,” says Shawna Bertalot, WisMed Assure President.  

Please contact Shawna Bertalot to discuss this article or your insurance needs and concerns.

Shawna Bertalot, CIC, ACI, President WisMed Assure
shawna.bertalot@wismedassure.org
608.442.3738

Play Defense and Offense to Win the Medical Liability Game: A game plan for success in a hard insurance market

Part 3 of 3

By Shawna Bertalot, CIC, ACI, President WisMed Assure

“Physicians in Wisconsin will soon be paying more for medical professional liability (MPL) insurance thanks to a cyclical “hardening” of the market.”

(Excerpt from Part 1)

Three of every four primary care physicians will be sued by a patient during the course of their career. The numbers are even worse for specialties.

Which is why physicians as a whole are not willing to take the chance they will be among the lucky few who never get sued. To guard against the financial impact of a law suit, they purchase Medical Professional Liability (MPL) insurance. But, as Wisconsin physicians begin to experience rising MPL premiums along with greater underwriting scrutiny, the question becomes, “How can I get the coverage I need and avoid paying too much?”

The answer is to play defense and offense at the same time; defense by reducing the chances of being sued and offense by managing your insurance purchase.

It’s simple: don’t get sued

Well, if only it was that simple. In reality, a physician can do everything perfectly for a patient and still be sued because of a poor outcome.

Legally speaking, to be successful in court, a patient’s legal team has to prove three things:

  1. The physician committed a breach of duty by not providing medical care another healthcare professional would have provided
  2. The patient suffered emotional or physical injury
  3. The physician caused the damage to the patient

But, even when one or more of these three are not provable in court, no physician wants to end up in court in the first place… nor does their MPL insurer want to pay the legal bills.

How’s your Patient CRED?

Playing defense could be as conceptually simple as applying the “CRED” concept to your medical practice:

C – communication

R – relationship

E – education

D – documentation

Communication

A breakdown in patient-provider communication is a leading contributor to malpractice lawsuits. While it is absolutely essential to obtain adequate informed consent, doing so as part of an open, two-way conversation with the patient and their family when appropriate goes a long way to helping you avoid your day in court.

By taking the time answer questions, address concerns and openly discuss potential complications, you can avoid false assumptions and miscommunication while building patient confidence.

Relationship
Patients and families are much less likely to sue a physician when they feel they have a good relationship. Even if you deliver the best possible care, without a good relationship, its perceived value and effectiveness can be significantly diminished in the eyes of your patient.

That’s why approaching each patient with compassion and empathizing with their concerns and condition throughout the cycle of care, is one of your best defensive strategies. Most of the time all it takes is for you to stop for a few seconds and truly engage with patients. Making eye contact, actively listening, just being there for a moment instead of worrying about where you have to be next, can make all the difference.

Education
When a patient or a member of their family doesn’t understand the diagnosis, treatment or regulations, it is far too easy for them to feel you’ve done something wrong or inadequate.

If you don’t educate them, they instead rely on assumptions, what they read on the Internet, and what their cousin in Oconomowoc heard on the Doctor Oz Show.

To protect yourself, to play strong defense, take time to educate your patients and their family so they understand why you are recommending all tests and treatments ahead. Plus, they need to know what to expect including risks and possible side effects, recovery times, and results.

Clearly explaining why and what helps you avoid having to justify your actions and decisions by making the patient and their family part of the decision-making process.

Documentation.
Malpractice law suits occur when a patient thinks they’ve been harmed and are supported by others in making a case against a physician. Defense then is conceptually simple; you must accurately document the patient’s condition and why your diagnosis and treatment decisions were made.

But, in practice, it’s a lot more complicated. One complicating factor you cannot afford to overlook are the decision-making (or at least decision-influencing) conversations you have with patients and their families. When you use the other three elements of Patient CRED, these conversations gain importance and the need to document them is essential.

Going on the offensive

Inevitably, you will pay more for MPL insurance. But, to avoid an even worse-case scenario, where you can no longer find adequate coverage at all, there are several things you can do.

As the market hardens, underwriters will begin to clamp down on exceptions. This means that if your risk management practices and policies are irregular, you will pay a lot more and your options could be severally limited.

Unfortunately, to protect their profits, some insurers may reduce claims and risk management personnel and services. And some may sell directly and not through licensed insurance agents who can help you play offense. Which makes it even more important for physicians to make sure they have their act together when it comes to risk prevention.

Here is a risk management checklist you can use to improve your offense and be seen as a preferred risk to an insurance company.-

  • I understand and have taken advantage of the premium discounts and credits my insurance company offers.  Yes    No    Not Sure
  • I regularly participate in risk-reduction CME courses and seminars and receive discounts from my insurance company for doing so.  Yes    No    Not Sure
  • I utilize electronic medical records in my practice and receive discounts from my insurance company for doing so.  Yes   No   Not Sure
  • My organization pursues ongoing risk-management efforts such as claims management, quality initiatives, and risk assessments. Yes    No     Not Sure
  • My organization has an effective peer-review process.  Yes     No     Not Sure
  • My organization has practical guidelines for medical record documentation and consent forms.  Yes   No    Not Sure
  • I (we) have chosen the location for our organization by balancing market/patient accessibility and location-specific insurance costs.   Yes    No    Not Sure
  • When completing annual insurance renewal forms, I am careful to answer all questions as accurately as possible and include any and all substantive changes to my practice (e.g.: changes to hospital staff privileges, joining a managed-care network, gaining specialty board certification).   Yes   No   Not Sure
  • I understand the difference between claims-made and occurrence coverage and have chosen the coverage most appropriate for my situation:   Yes   No   Not Sure

It takes two to Tango

Playing offense goes beyond implementing risk management strategies. It also means playing tough with your insurance company. Given that the likelihood of a law suit occurring is so high, you need to be aware of your insurance company’s track record when it comes to managing claims.

Here are some important questions to ask:

  • How many law suits do they defend annually?
  • What is the percentage of cost they spend on defense vs. settlement?
  • How does their success rate in court compare to the national average?

Nationally, only about five percent of cases go to trial. And, of those, about 80 percent are decided in favor of the physician.

What should you do now?

For now, assuming your house is in order, you will want to look for stability and security by renewing your coverage with a financially strong insurer; a long-term player committed to the MPL insurance market place. This is where an experienced broker can play a key role in helping you understand the quality of the insurers willing to do business with you.

As the market continues to harden, it is essential to seek the help and advice of an experienced, committed advisor who can help you improve your underwriting profile if need be and navigate your options.

If you would like to discuss this article or your insurance needs and concerns, please feel free to contact me.

Shawna Bertalot, CIC, ACI, President WisMed Assure

shawna.bertalot@wismedassure.org

Keeping Wisconsin Safe: Why It’s the Best Place to Practice Medicine

Part 2 of 3

There’s a reason Wisconsin is one of the safest places to practice medicine; it’s long been a haven for affordable medical professional liability (MPL) insurance. Which, among many other reasons, also makes it a great state to be a patient in.

But now, as the rest of the country feels the impact of increased MPL premiums, it may only be a matter of time before Wisconsin physicians see similar increases.

The economics behind this growing threat are relatively simple- insurance companies make money by collecting premiums, investing those premiums, and then paying out claims that are less than the income they make on their investments. On a national level, adverse litigation trends, an increased frequency of severe claims, and years of poor investment returns are driving down insurance company profits. As a result, MPL insurers are increasing premiums for the first time since 2001. 

Several states have already seen significant premium hikes and higher deductibles, along with reduced coverage options and fewer (if any) risk management services. It gets worse; some insurers are exiting the market all together.

It’s a classic hard market scenario: if they aren’t already, physicians and employers of physicians will be paying more for less. 

However, because of a number of factors, Wisconsin physicians have been shielded from this trend. 

Wisconsin is different… in a good way

Thanks to the efforts of the Wisconsin Medical Society, the AMA, and the medical-legal community in general, Wisconsin has always been among the top states when it comes to affordable MPL insurance. 

One of the most significant factors was in 1975 with the creation of the Injured Patients & Families Compensation Fund. Physicians and other health care providers pay into the fund, which covers malpractice awards greater than $1 million. Physicians must purchase their own MPL insurance to cover claims less than $1 million. Bottom line: A physician’s personal assets are never at risk in Wisconsin thanks to this fund.

In addition to being instrumental in the creation of the fund, the Wisconsin Medical Society has consistently and effectively lobbied the state legislature resulting in the capping of non-economic damages and other legislation beneficial to physicians.

Wisconsin currently has capped non-economic damage claims at $750,000. The state also guarantees full recovery of economic damages awarded by a jury. This includes awards for past and future medical expenses as well as lost wages. 

When a 2012 malpractice suit resulted in a ruling the cap was unconstitutional, the Wisconsin Medical Society, along with the AMA’s Litigation Center, stepped in. They jointly argued against the ruling and asked the state Supreme Court to review the case. In 2018, the state Supreme Court rejected the lower court’s ruling and confirmed the cap’s constitutionality.

What the statistics tell us 

Consider these statistics for the period of 2004 to 2018 from the National Practitioner Data Bank managed by the Department of Health & Human Services:

  • In 2004, an approximate total of $4.6 billion in claims was paid. This sank to a low of just over $3.5 billion in 2012 and has risen to just over $4 billion as of 2018.
  • In the same time period (2004 – 2018) the number of claims has declined from approximately 17,000 to 11,584.
  • Conversely, the average paid claim has risen from around $260,000 to $348,000

Considering that the last time we saw a hard market was in 2001, these statistics are likely contributing to the national trend away from the historically lengthy soft market.

When it comes to the per-capita medical malpractice costs for all practitioners (from 2012 – 2016), Wisconsin was the lowest with an average of $3. This compared to New York’s number-one ranking of $36.

But, here’s something to watch in light of the national trends and the hardening of the MPL insurance market. Even though the number of claims paid in Wisconsin has dropped (as of 2016, the state ranked #50 out of 51 in the claims frequency category), we’ve seen a spike in paid claims from 2016 to 2017. Total paid claims for all healthcare providers went from 17 to 39 with the total payout jumping from $4.83 million to $14.28 million.

Who you gonna call?

While there are no hard market busting solutions out there, Wisconsin is most likely to remain one of the least expensive insurance havens in the country. Clyde “Bud” Chumbley, MD, CEO of the Wisconsin Medical Society, agrees saying, “The Society is vigilant and will continue to play a significant role in ensuring our physicians are protected from unreasonable and unnecessary insurance premium increases.”

While the Wisconsin Medical Society and others are acting on your behalf, there are some fundamental ways you can protect your ability to acquire and maintain the right amount of professional liability coverage. We will dig a little deeper into what you can do to better manage your risk and the help that you can expect from a dedicated and experienced insurance brokers in the third part of this article.

In the meantime, if you have any questions regarding what the future of MPL holds for you, contact your trusted insurance and risk advisor.

Shawna Bertalot, CIC, ACI, President WisMed Assure

shawna.bertalot@wismedassure.org

608.442.3738

History Repeats Itself: Medical Liability Insurance Premiums on the Rise

Part 1 of 3

Physicians in Wisconsin will soon be paying more for medical professional liability (MPL) insurance thanks to a cyclical “hardening” of the market.

Many younger physicians have never experienced a hard market because we have been in a “soft” market for an unprecedented length of time. The last time premiums increased was in 2001. And, prior to that, 1975 and 1986.

Here’s how it works. The insurance underwriting cycle is determined by the collective behavior of insurers. During a soft market, insurers are willing to provide coverage at or below cost, usually in an attempt to gain market share. But, at some point, insurers get nervous about low premiums failing to cover the payment of future claims.

Tom Baker, a University of Pennsylvania Law School professor, says understanding how insurers define cost is, “key to understanding the insurance under-writing cycle”. He goes on to say that when, “…insurers set their prices, most of the costs of the insurance coverage will be incurred only in the future. As a result, insurers constantly have to imagine the future to decide how to price their products today. This situation creates a remarkably high degree of uncertainty… This uncertainty about insurance costs is the fuel that drives the underwriting cycle.”

Insurers turn a profit by charging their clients premiums, investing those premiums and then paying out claims that are less than the income they make on premiums and investments.

Things are changing because 2018 was the third year in a row the industry’s combined ratio has exceed 100%. In other words, the industry would have been unprofitable each year since 2016 without investment income.

And, according to Don Tejeski, Senior Vice President at AmWINS Group Inc., no insurer is bucking the trend: “Underwriting overall has gotten more disciplined. No one is undercutting the market.”

Despite publishing an article earlier this year that forecast a continued soft market, Susan J. Forray, a principal and consulting actuary at Milliman (one of the world’s largest providers of actuarial and related products and services), when contacted directly cautiously advised, “The closest proxy to a nationwide market would be the market for reinsurance. Most companies would say the reinsurance market has hardened. This was the case when we wrote our article but I think the hardening has broadened across the reinsurance market since then. I think this will continue to contribute to a hardening market in states where the soft market has not yet ended.”

Wisconsin is an insurance haven

Nationally, adverse litigation trends, increased frequency of severe claims, and years of poor market results are driving insurers to look at raising premiums for the first time since 2001. Several states have already seen significant premium hikes and higher deductibles along with a reduction in coverage. It’s a classic hard market scenario; physicians and employers of physicians are paying more for less.

And it gets worse. Some insurers are exiting the market all together.

Because of a number of factors, Wisconsin physicians have been shielded from this trend. But, in the last three months, we have seen that shield start to give way.

Thanks to the efforts of the Wisconsin Medical Society and the medical community in general, Wisconsin has always been among the top states when it comes to affordable MPL insurance. One of the most significant factors was the creation in 1975 of the Injured Patients & Families Compensation Fund. Physicians and other health care providers pay into the fund, which covers malpractice awards of greater than $1 million. Physicians must purchase their own MPL insurance to cover claims less than $1 million. Bottom line: A physician’s personal assets are never at risk in Wisconsin thanks to this fund.

In addition to being instrumental in the creation of the fund, the Wisconsin Medical Society has consistently and effectively lobbied the state legislature resulting in the capping of non-economic damages and other legislation beneficial to physicians.

What can you do about it?

Inevitably, you will pay more for MPL insurance. But, to avoid an even worse-case scenario, where you can no longer find adequate coverage at all, there are several things you can do.

As the market hardens, underwriters will begin to clamp down on exceptions. This means that if your risk management practices and policies are irregular, you will pay a lot more and your options could be severally limited.

Unfortunately, to protect their profits, insurers may reduce claims and risk management personnel and services. Which makes it even more important for physicians to make sure they have their act together when it comes to risk prevention.

This means you’re going to have to be more self-reliant when it comes to risk management because every claim will have an increasingly significant adverse effect on your premiums and even your ability to be insured at all. If you make risk management a top priority, you are much more likely to be been seen as a preferred customer by your insurer.

We will dig a little deeper into what you can do to better manage your risk and the help that you can expect from a dedicated and experienced insurance brokers in the third part of this article.

For now, assuming your house is in order, you will want to look for stability and security by renewing your coverage with a financially strong insurer; a long-term player committed to the MPL insurance marketplace. Here again, an experienced broker can play a key role in helping you understand the quality of the insurers willing to do business with you.

It is essential now more than ever to seek the help and advice of an experienced, committed adviser who can help you improve your underwriting profile if need be and navigate your options.

Shawna Bertalot, CIC, ACI, President WisMed Assure

shawna.bertalot@wismedassure.org

608.442.3738

Medical Liability Insurance Premiums on the Rise: Part 1 of 3 Available in September

For the first time since 2001, the insurance market is hardening. This means Wisconsin physicians will be paying more for their medical professional liability (MPL) policies. It also means you will face stricter conditions, less favorable terms, and have fewer options and insurance companies to choose from.

At WisMed Assure, we know this is a serious matter for our clients. Our president, Shawna Bertalot, has written a three-part series examining what to expect as the market changes and MPL premiums increase. Part one of the series will be released in September with the debut of our bi-monthly newsletter. Be sure to subscribe to stay up-to-date on the financial and insurance matters of utmost importance to you and all of the Wisconsin health care community.

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