Med­i­cal li­a­bil­ity in­sur­ers see re­duced pre­mium rev­enue

Modern Healthcare - - CLASSIFIED MARKETPLACE - By Michael San­dler

Med­i­cal li­a­bil­ity in­sur­ers con­tin­ued to face a slug­gish mar­ket, with di­rect pre­mium col­lec­tions down for the sec­ond straight year in 2014, ac­cord­ing to a Mod­ern Healthcare re­view of data supplied by A.M. Best Co. To­tal pre­mium rev­enue dropped 1.3% from 2013 to 2014, af­ter tak­ing a 2.5% dip from 2012 to 2013. The last time the in­dus­try saw growth in di­rect pre­mium rev­enue was in 2006, when it grew by 3%.

A fa­vor­able cli­mate for risks and claims has re­sulted in a slight re­duc­tion in the fre­quency of med­i­cal mal­prac­tice claims for a num­ber of years, said Brian Atchin­son, CEO of the Physi­cian In­sur­ers As­so­ci­a­tion of Amer­ica.

Just seven of the top 25 li­a­bil­ity in­sur­ers col­lected more pre­mium rev- enue in 2014 than in the pre­vi­ous year. Atchin­son said the vary­ing re­sults for premi­ums col­lected are re­lated to car­ri­ers’ dif­fer­ent struc­tures. For ex­am­ple, Berk­shire Hath­away, the com­pany that wrote the largest amount of di­rect premi­ums in 2014, in­cludes a num­ber of or­ga­ni­za­tions that serve dif­fer­ent sec­tors of the mar­ket­place, he said.

Changes in the healthcare de­liv­ery sys­tem are al­ter­ing the types of in­sti­tu­tions that li­a­bil­ity car­ri­ers are un­der­writ­ing, Atchin­son said. Some com­pa­nies are mov­ing ag­gres­sively into non­hos­pi­tal mar­kets such as surgery cen­ters and am­bu­la­tory care cen­ters. All car­ri­ers are mak­ing de­ci­sions about how they are un­der­writ­ing mi­dlevel prac­ti­tion­ers such as nurse prac­ti­tion­ers, mid­wives and physi­cian as­sis­tants.

One car­rier that saw an in­crease in 2014 di­rect premi­ums was the Con­trolled Risk In­sur­ance Com­pany of Ver­mont, which saw a 4.5% uptick. The com­pany at­trib­uted the gain to growth in the num­ber of physi­cians, clin­i­cians and healthcare or­ga­ni­za­tions it in­sures within its mem­ber risk- re­ten­tion group, said Ellen Var­ney, the com­pany’s chief fi­nan­cial of­fi­cer. The car­rier in­sures the Har­vard Med­i­cal School teach­ing hos­pi­tals, their af­fil­i­ates and em­ploy­ees.

Atchin­son ar­gued that even though li­a­bil­ity premi­ums have sta­bi­lized since their rapid growth in the early 2000s, statu­tory caps on dam­ages are still nec­es­sary.

But premi­ums have been flat or de­clin­ing since 2006, even in states that have not im­posed dam­age caps, ac­cord­ing to li­a­bil­ity ex­perts.

They at­tribute the trend to com­pe­ti­tion in the in­sur­ance mar­ket, fewer claims, hos­pi­tals hir­ing more physi­cians, and in­sur­ers’ suc­cess in de­fend­ing against claims.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.