Parametric insurance: A captivating solution
Parametric policies, which pay based on the magnitude of an event, can bridge coverage gaps that are difficult to insure with a traditional indemnity policy.
Physicians nationwide have begun to brace for the impact of the coronavirus on the healthcare industry. While the health of the nation and world is of primary importance, the medical professional liability (MPL) industry has begun to consider the impact on providers from related MPL claims. Healthcare providers, facilities, and MPL writers can expect direct and indirect impacts from the coronavirus pandemic – with the indirect impact possibly proving more impactful over the long-term.
Paradoxically, the more we as a society are able to address and slow the spread of the coronavirus, the more the MPL industry may see related claims. It might be difficult to allege malpractice against a hospital short on ventilators when thousands of other hospitals are short as well. But if the spread can be slowed to a rate at which most hospitals have the capacity to handle these cases (at least under a crisis standard of care), it may be easier to allege malpractice against those hospitals with overwhelmed emergency departments or that experience adverse results relative to others.
According to a study from Wuhan, China, which began in December 2019, 13.5% of patients hospitalized with the coronavirus developed a hospital-acquired infection.1 The more typical rate among hospitalized patients in China is less than 5%.2 The rate of hospital-acquired infection is typically greater among patients with respiratory conditions3 and hospital-acquired infections are only one measure of complications from treatment. However, this information suggests one way in which facilities or providers may be subject to allegations of medical liability.
As the healthcare system reaches capacity, many providers will work outside their areas of expertise to treat affected patients. In typical circumstances, doing so would be rife for allegations of malpractice. Whether that can happen under a pandemic may depend on the interpretation of Good Samaritan laws, which vary in wording by state.4 MPL writers should consider consulting with their legal advisers and taking steps to ensure that these laws appropriately address pandemics.
More concerning may be the impact of the coronavirus on claims after the pandemic is over. Patients are now delaying non-essential medical care as part of social distancing. Some patients will experience adverse impacts from delays in treatment whether the delay occurred from social distancing or a provider called upon to address greater medical needs. These delays can complicate future medical treatment, possibly in severe ways that the patient may not anticipate. Healthcare providers may experience MPL claims alleging a failure to provide appropriate medical care to patients with less immediate need. In reviewing Good Samaritan laws, MPL writers should ensure healthcare providers are appropriately protected from such claims. A March 15, 2020, editorial in the Washington Post urged legislators to enact such a change, citing emergency physicians who may need to turn away patients in order to maintain available beds for more urgent needs.5
More pressing for physicians and other healthcare workers currently may be the risk to their own health. Providers are among the most at risk for contracting the coronavirus given their contact with sick patients. Among working physicians, 20% are 65 or older6, the age group most at risk for complications from the coronavirus (this compares to 16% among the general population7).
One study found the case fatality rate from the coronavirus in this age group to be about 8%8, but this understates the prospective impact on healthcare as many survivors may have decreased respiratory capacity and may be unable to work prospectively.9 Data on the complication rate from surviving the coronavirus is difficult to come by, in part because it can best be measured over the long-term. Complication rates in this older demographic between 20% and 25% would reduce the number of working physicians by 5% by the end of the pandemic.
Hence the ultimate impact of the coronavirus on the MPL industry may be not in direct claims or even the second wave of delayed-healthcare claims that follows. It may be in a healthcare industry materially compromised by the disease caused by the coronavirus and its associated complications.
The final wave: The effect of the coronavirus on the medical professional liability industry
Healthcare providers, facilities, and MPL writers can expect direct and indirect impacts from the coronavirus pandemic—with the indirect impact possibly proving more impactful over the long term.