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Topics

5-pillar asset protection for physicians

Physicians can use life insurance as a key financial tool for supporting school debt and building personal security.

Life insurance: A financial solution for generational wealth for health care professionals

Cyberattacks on health care call for a security refresh. Here are common challenges and their solutions.

Information security and compliance: Solving for 3 security pain points

Specialty cyber coverage and tailored liability insurance products sold to health care providers is available to protect affected organizations hacked or threatened through cyber extortion schemes. 

Quality liability insurance coverage needed for deluge of cyberattacks on health care ecosystem

The importance of a thorough credentialing process cannot be understated.

Getting it right the first time: The importance of thorough medical credentialing

The challenge of declining reimbursements amid rising costs

The risks of rural hospitals

The risk of burning out your staff

The risks from a volatile medical malpractice insurance market

The risks natural disaster pose to practice viability

The risk cybercriminals can pose to your practice

Additional risks 2025 poses to medical practices

 to medical practices in 2025 are many, according to HUB International's 

2025 Healthcare Outlook and Insurance Market Rate Report.

, practices face an uncertain future. But understanding the risks is the first step to protecting your practice from these variables. 

 spoke with HUB's Peter Reilly about the biggest risks in 2025 and what practices should be doing to protect themselves.

Videos

The biggest risks medical practices will face in 2025 - and what you can do about them.

The top risks medical practices face in 2025

What are the risks practices face in 2025?

 for medical practices. What are the biggest threats and how should practices prepare? Peter Reilly from HUB International discusses 

Medical practices in 2025 face several significant risks, including cybersecurity threats, regulatory changes, and financial pressures. To mitigate these risks, practices should implement robust cybersecurity measures, stay informed about evolving regulations, and adopt financial strategies to maintain stability. Emphasizing staff training and development is crucial to ensure compliance and enhance patient care. Additionally, leveraging technology and data analytics can improve operational efficiency and decision-making. By proactively addressing these challenges, medical practices can better navigate the complex healthcare landscape and ensure long-term success.

2025 presents many unique risks to medical practices. Here's what you need to know.

What are the other risks practices face in 2025?

What are the cybersecurity risks to your practice in 2025?

 for hackers. Smaller practices are particularly vulnerable because they lack the security resources that larger organizations have. Pete Reilly of HUB International discusses the 

Cybersecurity threats in healthcare are escalating, with smaller practices being particularly susceptible due to limited security resources compared to larger organizations. As healthcare remains a prime target for hackers, the need for robust cybersecurity measures is critical. Pete Reilly from HUB International emphasizes the increasing risk to healthcare practices by 2025, highlighting the importance of proactive strategies to mitigate these threats. The focus is on enhancing security protocols and awareness to protect sensitive patient data and maintain the integrity of healthcare services in the face of evolving cyber threats.

Health care continues to be a top target for hackers. Here are the risks for 2025.

Are you prepared if a natural disaster shuts down your practice?

 are becoming more common and more severe. What are the dangers to your practice and how can you prepare? If your practice is shut down for weeks, could your business survive? Pete Reilly of HUB International discusses the ramifications and the 

Natural disasters pose significant risks to medical practices, potentially leading to prolonged shutdowns and financial instability. It is crucial for healthcare providers to assess their vulnerability and implement comprehensive disaster preparedness plans. This includes securing adequate insurance coverage, establishing communication protocols, and developing contingency plans to ensure continuity of care. By proactively addressing these challenges, practices can mitigate the impact of natural disasters and enhance their resilience. Engaging with experts in risk management can provide valuable insights and strategies to safeguard the practice's operations and financial health.

Natural disasters are becoming more common and more severe. What are the dangers to your practice and how can you prepare?

What will happen to malpractice rates in 2025?

 insurance market is facing a number of challenges, including "nuclear" verdicts in some states that are affecting 

. What does this and other challenges in the market mean for your rates in 2025? Pete Reilly of HUB International discusses the current market trends.

The malpractice insurance market is currently experiencing significant challenges, notably the impact of "nuclear" verdicts, which are disproportionately large jury awards that are driving up insurance rates. These verdicts, particularly prevalent in certain states, are contributing to increased premiums and affecting the overall stability of the market. As a result, healthcare professionals may face higher insurance costs in the coming years. Market trends indicate that these challenges will persist, potentially leading to further rate increases by 2025, necessitating strategic planning and risk management by healthcare providers.

The malpractice insurance market is facing a number of challenges. What does that mean for rates in 2025?

What can physicians do to prevent burnout on their staff?

 is a problem for physicians, but it is also a problem for support staff. With a workforce shortage in health care, 

 your employees can lead to unnecessary hardships for a practice. Peter Reilly of HUB International discusses what can be done.

Burnout affects not only physicians but also healthcare support staff, exacerbating workforce shortages and creating additional challenges for medical practices. Addressing burnout is crucial to maintaining a functional and efficient healthcare environment. Strategies to mitigate burnout include fostering a supportive work culture, implementing flexible work schedules, and providing mental health resources. By prioritizing employee well-being, healthcare organizations can enhance job satisfaction, reduce turnover, and improve overall patient care. Effective burnout management is essential for sustaining a resilient healthcare workforce amidst ongoing industry challenges.

Burnout isn't limited to physicians. What can be done to make sure your staff doesn't burn out?

Physicians doing business with rural hospitals need to be concerned about their future

Should physicians be worried about rural hospitals?

have really struggled in recent years. Declining reimbursement and increasing costs - along with a shrinking patient base and workforce shortage - have all contributed to the challenges of 

. Pete Reilly of HUB International discusses whether physicians who work at or do business with rural hospitals need to worry about their future in 2025.

Rural hospitals face significant challenges due to declining reimbursements, rising costs, a shrinking patient base, and workforce shortages. These factors have raised concerns about the sustainability of rural healthcare facilities. The future of physicians working in or associated with rural hospitals is uncertain, as these institutions grapple with financial and operational difficulties. The ongoing struggle to maintain services and attract healthcare professionals may impact the viability of rural hospitals by 2025, necessitating strategic planning and adaptation to ensure their continued operation and service delivery.

Rural hospitals have really struggled to stay open in recent years - a trend that looks to continue in 2025. Do physicians affiliated with rural hospitals need to worry about their future? 

Should physicians who work at or do business with rural hospitals be worried?

A discussion about costs in health care and what's driving them

Why is reimbursement going down when costs are going up?

Reimbursement for physicians continues to 

 for Medicare, and even for private payers, 

 levels are not keeping up with rising costs. Peter Reilly of HUB International, discusses the factors behind this trend and what physicians need to understand about risks going into 2025.

Physician reimbursement rates are declining, particularly for Medicare, and private payers are not compensating for increasing costs. This trend is driven by several factors, including policy changes and economic pressures. Physicians must be aware of the financial risks and challenges they will face as they approach 2025. Understanding these dynamics is crucial for strategic planning and maintaining financial stability in the evolving healthcare landscape. Physicians need to adapt to these changes to ensure sustainable practice operations and patient care delivery.

A discussion on the factors driving reimbursement down as costs in health care continue to rise. 

What physicians should ask their broker about medical professional liability carriers

The state of the medical professional liability market

The impact of the physician shortage

How health care consolidation impacts malpractice liability

Nuclear verdicts and social inflation

Malpractice is always a major concern for physicians. 

 spoke with Brad Ash, Senior Vice President, Underwriting and Sales, and Wayne de Nazarie, Executive Vice President, both with liability insurance provider ISMIE Mutual Insurance Co., to learn more about current malpractice insurance trends. The following transcript was edited for length, clarity, and style.

What questions should a physician or administrator be asking their broker about regarding a medical professional liability (MPL) carrier?

The two things that would always be on my list are financial strength and geographic reach. Financial strength is probably the most important, because when you’re buying an insurance policy, you’re essentially buying a promise that the insurance company is going to be there to pay your claim if and when you report one. A carrier’s AM Best rating will indicate financial strength through the assignment of a letter ranging from A to D, and then they’ll add some plus or minus signs after that to further refine that financial rating. A++ is for the very strongest carriers while D is for the weakest.

Geographic reach is important because the practice of medicine today is not the practice of medicine as it was in the 1960s or 1970s. Economic realities of practicing medicine today really do reinforce consolidation pressures, and we see a ton of it within the medical professional liability industry, as practices in one state acquire practices in another state, or as physician groups in one location look to provide health care services to patients in another location. Having an MPL carrier that can ensure the totality of that practice is, I think, very important. If you’re a practice administrator or a physician leader, you’re not going to want to deal with multiple medical liability carriers. I think you want to be insured by a company that you can grow with as your practice grows.

: In 2019 or 2020, we started to hear the medical professional liability market characterized as a “hard market.” What does that mean, and does it continue to be true?

Competition has been one of the leading factors relative to whether the conditions are soft or hard. Over the last several years, the market has become very competitive. In the past 10 years, the rate competition in particular, coupled with a market where the overall base of insured physicians has significantly declined due to consolidation, there are simply fewer physicians to insure, and corresponding premiums have declined within the MPL segment.

I think it’s fair to say that from 2012 to 2019 the MPL market conditions were quite soft. During this period, as companies competed heavily, with aggressive rates and reductions in premium. From a financial standpoint based on earned premium less expenses and losses most companies reported combined ratios well over 100% and continued underwriting losses within the segment. As the underwriting losses continued, many companies were still able to report an operating profit typically by applying investment income and reserve redundancy. During this timeframe, AM Best had placed a negative outlook on the MPL Sector.

In 2019 and 2020, we started to see indications that the MPL sector was stabilizing somewhat, with less aggressive pricing. Most companies focused on improved rates and risk selection aiming toward achieving underwriting profitability and not relying on reserve redundancy and investment income to obtain an operating profit. This led to discussions that characterized the market as moving to a hard market. However, I would not characterize the market as hard, but rather, it has been hardening. I would consider the hospital professional liability (HPL) market of having gone through a definite hard market, but overall we’re seeing a more stable MPL sector, and that’s a good thing. In 2023, AM Best upgraded the outlook on the MPL sector from negative to stable, noting both positive operational changes but also citing several remaining challenges for the industry.

: Many independent physicians and larger groups or clinics have been acquired by hospital systems and private equity groups. What are some of the pros and cons of this change within the market?

It has changed the landscape of medical malpractice, independent physician practices, and hospital systems. Recent estimates reflect that approximately 75% of physicians nationally are now employed either mostly either by hospitals or private equity firms. As to the pros, there are obviously financial benefits for the groups that are acquired related to the sale. Being acquired potentially transfers a lot of the administration and management of practice onto the health care system. Many physicians see the opportunity to have more flexibility and family time with set schedules.

Physicians that are part of a hospital system, the alignment of interest is certainly there. Both are focused on providing the best patient care, treatments and medical advances.

With private equity acquisitions, similar to hospitals, there’s still an alignment of interest in providing the best health care possible and build upon the overall group practice but it’s a little bit different. Hospitals are there to serve the public, while private equity firms, by definition, are there to build upon revenue and profit. That’s not a negative thing — hospitals need to make a profit as well.

There are certainly cons relative to the many acquisitions over the year. Basically, many times it’s just difficult for these physicians to get used to the new process. They need to transition their current patients to the acquirer, go through a whole network of communications and such, and this can sometimes become a difficult task toward adjusting to their new environment. Further there have been potential problems or areas of disagreement, such as contract disputes, expense reductions, revenue increases or decreases, number of daily patient treatments, longer hours or overall differences as to expectations and responsibilities of both parties.

When you look at the MPL sector now and the HPL sector, there has been many changes and adjustments that both have had to adapt to.Due to the significant consolidations, many MPL companies implemented various diversification programs to supplement their core writings. These included writing in new states, diversified product offering, developing joint alliances with other companies and brokers, along with select changes in investments where appropriate. Hospitals had to adjust to all the issues that come with acquisitions, management of larger and many times more complex systems, as well as restructuring insurance programs and captives. Through it all the industry has gone through at least a 10-year cycle of acquisitions and whereas many challenges remain, the MPL sector has transitioned and adjusted to today’s healthcare marketplace.

: There has been an increase in large verdicts against physicians in recent years. What factors are driving this trend?

The average of the top 50 MPL verdicts for the years 2019 to 2023 has increased from just under $30 million in 2018 to just below $50 million in 2023. What’s behind this? Really good plaintiff’s attorneys are experts in being able to channel a jury’s anger and use that to the benefit of the plaintiffs. Another strategy that plaintiff’s attorneys use is what we call anchoring, and that’s basically where a plaintiff puts out a truly exorbitant value on a case, essentially to get the jury or the mediator anchored in some manner such that even if that number is cut in half, it’s still an absolutely crazy figure.

On the risk management side, a significant key would be to have an even quicker assessment of claims from the moment they’re reported in order to identify a successful claim strategy. One thing that claims adjustors have always said to me is that bad claims rarely get better with age, so they need to be settled faster when the underlying facts of the case suggests that they’re a loser. The last risk management strategy identify resides in defense counsel quality. Sometimes insurance carriers will try to rein in costs in areas they can control, and in the realm of claims, that tends to be legal fees associated with defending malpractice claims. We may save some money in our legal expenditures, but we give it all back and then some on the indemnity side. There are subtle issues that can turn a claim from a defense verdict into a plaintiff’s verdict, or that can take a case that might have resulted in a $5 million verdict to a $20 million verdict.

Two experts discuss how emerging trends in health care — market conditions, consolidation, the physician shortage and more — are impacting physician liability risks.

The medical malpractice landscape: What physicians need to know

Do noncompetes have a future?

The FTC banned noncompete agreements nationwide, but that decision is being 

, noncompete agreements can be complex and practices must use them with caution, while also being careful to make sure new employees do not have a noncompete agreement with another organization.

Do noncompetes have a future considering the courts seem to have a poor opinion of them?

Risk Management

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