The Amazing Race

2008 Medical Professional 2008 Medical Professional Liability SymposiumLiability Symposium

Chicago, Illinois ~ March 11 & 12, 2008

The Amazing RaceThe Amazing Race

Emerging Trends in Hospital LiabilityEmerging Trends in Hospital Liability

Healthcare Facilities: The Healthcare Facilities: The Amazing Race?? Amazing Race??

• MODERATOR: Pamela K. Haughawout, CPCU, ARM, RPLU, Senior Vice President,

Hilb Rogal & Hobbs

• Paul F. McKeon, MBA, Senior Vice President, Transatlantic Reinsurance Company

• Donna Modestine, Esq., Shareholder, Marshall Dennehey, Warner, Coleman & Goggin

• Joe P. Sullivan, Senior Vice President, Healthcare Group Executive, Zurich

4 Trends to Discuss

• The Condition of the Insurance Market

• Batch Issues

• Never Events

• Privacy Liability

Market Conditions

Riding the Roller Coaster

Again!

We all know the market is soft . . . But Why?

• Declining Frequency of Claims Tort Reform

• Claims Severity

Loss Ratios for Medical Malpractice Industry

Source: Bests Aggregates & Averages – Property/Casualty

0%

20%

40%

60%

80%

100%

120%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CY LR AY LR(SchP)

1

National Practitioners Data BaseNationwide

Frequency AnalysisSource: National Practitioners Data Bank public use file, June 30, 2006

2.93.1 3 2.9

2.6 2.62.4 2.3 2.4 2.4 2.5

2.2 2.22 1.9 1.8

1.6

0

0.5

1

1.5

2

2.5

3

3.5

Cla

ims

Per

100

Phy

sici

ans

The Soft MarketMore than Just Price

• Coverage Enhancements Multi Year Deals Coverage for Punitive Damages

• Bariatrics – What Happened to this Issue?

• Risk Management Credits – Promotional Hype or Legitimate Underwriting Criterion?

Batch Issues

Batch/ Systemic Events

• Real or Imaginary?

• Brokers Pushing or UWs Offering?

• Excess layers are softest part of market

Systemic Events

• Over 30 cases in our inventory with some consistency: Surgical Techniques Sterilization (Hepatitis, Others) Credentialing Products Laboratory techniques

…various others

Underwriting Approaches

• Price, Attachment, Wording, or Luck?

• Wording - Policy period(s) Sole Judge Split Retentions …various others

Never Events

What are Never Events

• Payment reform enacted by Medicare

• No reimbursement for a condition that never should have occurred during an in-patient stay

8 Conditions

• object left in surgery• air embolism• blood incompatibility• catheter associated UTI's• decubitus ulcers• vascular cath associated infections• surgical site infections• falls and trauma

3 More Conditions

• ventilator associated pneumonia

• staph. aureus septicemia

• deep vein thrombosis / pulmonary embolism

3 criteria for deciding what a Never Event Is

• High cost/high volume or both

• Assignment of a case to a diagnostic related group with higher payment because of secondary diagnosis

• Preventable through evidenced based guidelines

NEVER EVENTS – NEW STANDARD OF CARE???

• Will "never events" payment rules impact Medical Malpractice Litigation

• Some Issues to Think About- Whether CMS regulatory violations constitute

negligence per se Whether payments to a hospital under 5001(c)

would be admissible evidence to support allegations of negligence

Do we still need medical experts now that CMS has specified preventable error and blessed specific preventable guideline?

• Private Insurers are following suit

DOES THIS CONSTITUTE STRICT LIABILITY

In the news…

Staph infection threatens lives

Drug-resistant skin infections spreading fast

Over half of ER cases caused by potentially fatal

superbug, researchers say

CDC seeks to calm schools over ‘superbug’Best way to fight the bacteria is simply to

washyour hands, officials say

Emergence of MRSA

• First recognized in 1968

• Early 1990’s accounted for 20-25% of Staph Aureus isolates

• 1999 - accounted for > 50% of Staph Aureus isolates

• 2003 – accounted for 59.5% of Staph Aureus isolates

Clostridium Difficile

Most common cause of hospital acquired bacterial diarrhea

Often triggered by antibiotics

Common in hospitals and long-term care facilities

Yearly Clostridium difficile-related mortality rates per million population, United States, 1999–2004.

Source: Centers for Disease Control and Prevention Emerging Infectious Diseases [online] 2007 Sep [cited 2007 Aug 17]. Available from Internet: http://www.cdc.gov/eid/content/13/9/1417.htm

Norovirus

“Cruise ship” virus - New strains have caused increased hospital and LTC outbreaks

ED visits for acute gastroenteritis increasing (especially since October 2006)

Probably under-reported since testing is inadequate

Norovirus

Estimated total cost for a 3 month Norovirus outbreak

clean-up expenses $96,000 staff sick leave and overtime $89,000 lost revenue from closing units and echo lab

$418,000.

Total: $650,000

Sources of Superbugs

• Patient gowns

• The floor

• Bed linens

• Blood pressure cuffs

• Over-the-bed tables

• Stethoscopes

• Door handles

• TV remote control

• Patient bed controls

#1 Healthcare Workers

Great Britain

• No long-sleeve white coats

• No ties• No fake nails• No jewelry

• No watches

Mandatory public reportingPremier. Reducing the cost and impact of infectious disease. June 2007

Privacy Liability

HIPAA – HOW FAR HAVE WE COME

• HIPAA AND HOW IT IS BEING ENFORCED, IF AT ALL Office of Civil Rights 24,000 HIPAA privacy complaints First HIPAA violation trial – Fernando Ferrer, Jr.

• HIPAA COMPLIANCE IS NOT SIMPLY A FEDERAL REGULATORY MATTER State Courts Look to HIPAA as Standard Acosta v. Byrum 638 S.E.2d. 246 (N.C. Ct. App. 2006) Bagent v. Blessing Care Corporation, 244 Ill.2d 154 (2007)

• HOW HOSPITAL'S ARE PROTECTING THEMSELVES

• IS HIPAA HERE TO STAY? (HIPSA) Kennedy/Leahy Bill - S. 1814

Discussion Points

• The issues surrounding interoperable electronic health records is the biggest privacy and security policy issue on the horizon

• Is it possible to balance the desire for electronic medical records/personal health records with appropriate privacy and security issues identified by HIPAA?

• The debate on EMRs/PHRs likely will drive a new evaluation of HIPAA

• Will the drive of Health Information Exchanges in Hospitals and Health Systems open the door to increased HIPAA based private litigation and what hospitals can do to protect themselves?

Thanks for Inviting US