Healthcare services were anchored to local physicians offices and regional hospitals, both of which exercised tight control over the prescribed treatments. Most interactions between patient and physician were in person, and administrators maintained mountains of paper records. Manual processes and analog systems limited the seamless transfer of medical information from doctor to doctor or facility to facility. When a patient visited a local physician’s office, there was a good chance the doctor actually knew the patient before referencing their chart. Holistic and preventive care were not a major focus area. Often, this philosophy resulted in lengthier hospital stays, but there was also less prevalence of hospital-acquired infections.
Care is everywhere... and it’s growing! To best serve their communities, healthcare providers have invested in making treatment more accessible and affordable for patients. The number of places where patients can receive care has grown drastically, from emergency rooms and doctors’ offices to in- pharmacy care and urgent care clinics. And with the increased financial responsibility, consumers are re-evaluating how, when, and where to spend on healthcare services.
We’ve also experienced rising demand for healthcare services. Between 1993 and 2010, the total number of doctor visits climbed by almost 40%, while the population only increased by about 19%*. At the same time, today’s healthcare market allows consumers to take charge of their healthcare in novel ways, especially as a result of greater access to information in the digital age. While the accessibility of medical information may carry its own challenges, it allows patients to have open dialogues with their doctors about diagnosis and treatment options, and to be more discerning about treatments, which are becoming more personalized through advancements in genetic, behavioral, and digital tools that are designed to monitor and manage personal health. There is also increased regulatory pressure to reduce hospital readmissions and increase preventive care and wellness.
Additionally, in response to COVID-19 prevention measures, many physician practices have converted to increasing or exclusive,
use of telemedicine. Consumers have adopted these measures, and in some cases, benefitted from temporary discounts on telemedicine copayments. Patients may be reluctant to return to the previous norms of in-office visits. And providers and payers will need to navigate new ways to manage payment criteria.
What this means for providers
As healthcare providers’ offerings expand to better
serve their communities and create additional revenue streams, the strong risk management culture that many providers worked hard to establish is at risk of being diluted. Reviewing licensure and credentialing of staff and making sure employees, as well as the facility’s vendors and partners, meet requirements is paramount.
Furthermore, in response to COVID-19, many hospitals relaxed credentialing protocols to answer the acute need for skilled staff. Some states also eased regulations to allow nurses and other staff to practice across state lines and temporarily honored out-of-state licenses. While this risk has always existed for providers who offer telemedicine services since virtually all states require physicians providing telehealth services to be licensed in the state of the patient receiving care, it’s important that risk managers maintain rigor after the pandemic has passed to ensure all staff are properly licensed and credentialed.
Additionally, once business returns to normal, risk managers need to invest in training for their off-site employees, especially as newer offerings are introduced. And while the costs of providing care in an outpatient setting are lower than the costs within a traditional hospital, outpatient facilities should be held to the same risk management and safety standards as hospitals. Healthcare providers need to understand their limitations and when to refer a patient to a more specialized healthcare provider—and when to call 911.
New technology can provide enhanced risk management but can also lead to increased or unintended risk. Additionally, insureds may be pushed to retain more risk by their insurers, or choose to do so, to reduce premium spend. The financial implications of higher self-insured retentions should be carefully considered with input from brokers and other service providers.
What this means for insurers
As the scope of services offered by healthcare providers increases, healthcare liability insurers need to exercise even greater underwriting discipline. This discipline is exercised in several ways, including:
Acknowledging that insights drawn from prior year loss history is limited and less predictive because current and future operating environments, conditions, and offerings look considerably different than the past.
Carefully evaluating the experience of the operators/ providers to ensure they have the requisite backgrounds and skill sets to effectively manage the provision and level of healthcare services.
An understanding of how controls and other mechanisms meant to ensure well-conceived and effective patient safety and risk management standards are adopted and enforced throughout growing operations.
A consideration of possible alternative risk solutions that offer unique structures to meet insureds’ risk tolerance and financial needs.