April 10, 2006 by Canadian Underwriter
Technological advancements in the medical field may improve hospital performance and safety leading to lower medical malpractice and professional liability costs but panelists told the Sixth Annual PLUS Medical Professional Symposium that such advances may also expose hospitals and doctors to emerging risks leaving underwriters hurting.
This new technology impacts productivity and revenue, principal of Integro Insurance Brokers Louise Bitting says. Underwriters are cautioned that while these innovations may lower malpractice insurance costs, “it could also pose some real challenges in the underwriting process for PC and E&O underwriters.”
Crystal Brown, assistant vice president, CNA HealthPro, says technological advancements can have direct exposures, particularly for hospitals that don’t have the budget to allocate towards technology improvement. “Is there identification and determination of the impact of the exposures? Are they underwriting for these exposures?”
Brown says that Electronic Medical Records (EMRs), a new technology that’s flooding into hospitals, should improve quality of care and safety. However she wonders, ” what happens if this system malfunctions or there is down-time? What if the hospital doesn’t have this technology? Are underwriters up-to-date on the latest equipment? Do they understand the advantages and disadvantages of this new technology? How do they address the pricing, structure and coverage?”
Brown says underwriters must utilize risk control departments. “They are the eyes and ears of the organization.” She notes that there needs to be hospital contingency plans and a system to disclose failures.
According to Brown, new technology should have a positive impact on loss history. “Expect to see a decrease in frequency and severity. Whether or not there will be a decrease in pricing hospital professional liability is unclear. There most likely will be changes in coverage terms. Will underwriters look at professional liability in general coverage or other areas?”
Brown suggests underwriters establish a task force to keep track of technological advancements in health care. “Look at your own internal tools and prepare to address the exposures; formulate an underwriting guide; evaluate the impact as it relates to the historical loss data. Is there a need for an expert underwriting system that can aid in the process?”
Drew Bartkiewicz, assistant vice president, Darwin Professional Underwriters, Inc. says hospital risks have caught up with technological advancements over the last five years, “This can be a good thing as it puts hospitals in a position to learn from the mistakes of others.,” Bartkiewicz says. “What are the hidden liabilities and exposures in this technology?”
According to Bartkiewicz, hospitals outsource certain IT intensive activities, such as data processing, storage, coding and hosting, which now exposes them to technology risks. “These include Network Security Wrongful Acts which fails to prevent hospital interruption; Internet/Content Wrongful Acts which affects hospitals’ online activities, including libel, slander, defamation, advertising, infringement and e-mail; and cyber liability products.”