TMCnet News
A.M. Best Special Report: Alternative Health Care Practitioners, Medical Facilities Take on Greater Importance in Medical Professional Liability Insurance SectorThe medical professional liability (MPL) insurance landscape is changing rapidly as the carriers' core physician client base is shifting from private practices to group practices or hospitals and hospital affiliations, leading to some insurer profitability issues, according to a new A.M. Best special report. The latest Best's Special Report, titled, "Alternative Healthcare Practitioners and Medical Facilities Take on Greater Importance," notes that MPL insurers have enjoyed more than a decade of strong operating profitability, which has created a wealth of capital. Favorable operating profits and strengthening balance sheets have taken some of the sting out of structural market changes, but with profit margins shrinking, A.M. Best believes MPL insurers need to adapt their strategies to the rapidly changing environment to maintain a strong financial performance. From 2013 to 2016, MPL direct premiums written attributable to physicians declined by nearly four percentage points; however, it rose for other health care professionals and health care facilities. Increases in loss costs and in expenses associated with adjusting and settling MPL claims have resulted in higher direct loss ratios for all insured types other tha physicians, with the increase in the loss ratios for hospitals the most significant. The report states that one of the reasons for the rising loss ratios is persistently soft market pricing. Furthermore, costs associated with tort reform issues and new medical and surgical procedures, as well as the growing use of capital to improve cyber security, have also translated into a decline in results. Acquisitions of physician practices has provided benefits, such as raising market share, cutting supply chain costs and neutralizing competition, but also leads to higher costs. One particular issue affecting insurer profitability is the failure of hospitals to adequately assess the malpractice risks of newly acquired physicians. In some cases, the hospital could be held liable for the doctor's negligent acts or wrongdoing. The health care industry is among the few career fields that have proven impervious to the economic volatility and market woes of the past several years. However, the near future for the health care job market is shrouded by the ongoing effort to repeal and replace the Affordable Care Act. To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=263152. A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170629006321/en/ |
