Medical Malpractice Insurers Face Uncertainty, Despite Positive Results and Ample Underwriting Capacity
Lockton Market Update warns that the healthcare industry is facing radical change, making it difficult for malpractice insurers to predict the impact on insurance market
KANSAS CITY, Mo., June 2, 2011 /PRNewswire/ -- In a new report, Insurance broker Lockton states that government regulatory changes impacting the healthcare industry are on the top of mind of both providers and insurers.
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Lockton Market Update states that while profitability for medical malpractice insurers outpaces the rest of the industry and capacity in the market remains high, it is a time of uncertainty for the healthcare insurance market.
In the new Healthcare report in Lockton Market Update, Lockton's Dana Switzer says that "the healthcare industry is facing radical changes as a result of government initiatives designed to improve quality and reduce costs, as well as the slow economic recovery and an aging workforce."
As part of the healthcare reform movement and related-legislation, there may be a move towards Accountable Care Organizations (ACOs) to serve patients. This move raises a number of questions for commercially insured patients. According to Switzer, "Management liability underwriters and brokers have expressed concern that formation of ACOs could subject providers to regulatory action on a number of fronts, including antitrust, fraud and abuse, and challenges of tax-exempt status."
The Lockton report also highlights other regulatory developments, including increased government audits of healthcare billing practices, which could pose serious financial risk for healthcare entities. According to the report "Those organizations wishing to obtain some level of risk transfer for defense costs, and in some cases for civil fines and penalties associated with a government audit, may find solutions through specialized insurance products."
The Market Update spotlights other issues that may impact the insurance market for healthcare providers - including developments in tort reform at the state and federal level, legislation promoting electronic health records, and privacy protection and liability related to electronic records.
The insurance broker's Market Update includes snapshots of 25 commercial insurance and employee benefits markets with the latest trends facing risk managers, chief financial officers, human resource leaders, and other executives.
To obtain free copies of these reports please visit www.locktonmarketupdate.com
About Market Update
Editors, feature editors and reporters are invited to quote from these reports and articles to enhance their own reporting. Please contact Dean Davison or Chris Don for permission to reproduce an article in its entirety or to speak to a Lockton expert.
About Lockton
More than 3,800 professionals at Lockton provide more than 15,000 clients around the world with insurance, benefits, and risk management services, offering an uncommon level of client service. From its founding in 1966 in Kansas City, Missouri, USA, Lockton has grown to become the largest privately held insurance broker in the world and 9th largest overall. Business Insurance recognized Lockton as a "Best Place to Work in Insurance." You can learn more at www.lockton.com
SOURCE Lockton
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