Physicians represent the top risk for re/insurers


Physicians represent the top risk for re/insurers in the evolving US health landscape, but softer criteria and judgement are often the better tools for assessing this risk.

That is according to Kimberly Morgan, senior vice president and healthcare practice leader at Endurance, addressing delegates at the Bermuda Captive Conference held in Bermuda this week (Monday June 8 to Wednesday June 10).

“From our point of view, the biggest risk is around physician behaviour,” he said. “We try to get our arms around policies in place and explore whether other metrics can help highlight risks such as whether they perform too many surgeries or the numbers of patient complaints but it seems there is simply not one answer.

“This is a difficult risk to understand and sometimes you just need to reply on that gut feeling as a underwriter, as to whether the client is focused on this risk. A big thing to consider, for example, is whether they empower nurses to speak up. It often comes down to the culture of an organisation and allowing people to speak up.”

Morgan described a number of emerging risks and challenges that are worrying re/insurers in the sector. She says the growing trend of physician integration into healthcare bodies combined with changes to the way they are reimbursed present significant challenges for the sector.

She specifically spoke at length about multi-claimant batch events where the cases of multiple claimants are combined and dealt with as one. She described these as a reinsurer’s nightmare owing to the potential size of the losses. She said she had seen two batch claims alone cost carriers $290 million in the past two years.

Some of the causes of the claims, she listed as: improper supervision, poor infection control, lack of sterilisations, privacy breaches, equipment error and medical studies errors.

“We are monitoring a number of other batch claims. But most of these problems ultimately stem from the behaviour of physicians and that is very difficult to underwrite. The lesson is that there must be a greater focus on physician behaviour.”

Another growing source of claims has been from cases of sepsis, she said, sometimes resulting in multiple amputations. These too have led to some very big settlements starting from $10 million but often exceeding $30 million.

She said there were a few reasons for this growth in cases including simply better medical procedures meaning that more patients with life-threatening illnesses survive and a greater use of antibiotics leading to more resistance.

This story was originally published on sister site Captive International

Insurance, Bermuda Captive Conference, Kimberly Morgan, US, Bermuda, Endurance