Medical Professional Liability Industry Convenes in New Orleans to Address Unique Challenges, Emerging Trends
side note: This is our annual write-up of all that happened at this year’s Medical Professional Liability Industry’s largest conference. What happens here drives changes to the medical malpractice insurance environment over the next 365 days.
The Annual Conference of the Medical Professional Liability (MPL) Association took place at the Roosevelt Hotel in New Orleans, running from May 17 to May 19. Only the second in-person MPLA Conference since the COVID-19 pandemic, the conference fostered an atmosphere of positivity as professionals from the field congregated to acquire knowledge, establish connections, and exchange valuable perspectives regarding the industry’s most urgent challenges.
“We’re coming together at an important time in the history of healthcare and medical professional liability,” said John Mize, State Volunteer Mutual Insurance Co. president/ chief executive officer and outgoing MPL Association board chairman, during his opening remarks to the conference. “We face some unique challenges. We could probably say that almost every year, but it seems particularly unique right now, and we’re going to discuss many of these challenges over the next two days.
“One is the trend in our verdicts. I think all of us have heard about, and many of us have experienced firsthand, surprisingly large jury verdicts. The MPL Association has made it a priority to work with our colleagues in claims and legal defense to improve judicial outcomes. Another emerging trend that’s a growing concern is artificial intelligence. AI has already been deployed in insurance and healthcare. And it’s important that we gain an understanding of these technologies and their implications.”
Following are some highlights from the educational sessions at this year’s MPL Association Conference.
Keynote speaker John Rossman commenced the conference’s educational sessions by sharing his experience as an executive for Amazon and how its business philosophy drives innovation by challenging conventional thinking. Author of three leadership books based on his time at the online retail giant — “The Amazon Way,” “Think Like Amazon” and “The Amazon Way on IoT” — Rossman posed and answered questions intended to help MPL industry leaders understand and navigate the importance of digital transformation for their organizations.
Perhaps the most-discussed educational session of the conference, Reining in Runaway Verdicts looked at the factors driving the spike in frequency of jury verdicts exceeding $10 million, how nuclear verdicts escalate settlement values and drive reinsurance costs, and how to better defend such cases. MPL defense attorney Robert Tyson Jr., Esq., pointed to a shift in plaintiff attorneys’ strategy away from conjuring sympathy for the injured patient to inciting jury anger as the primary driver of inflated verdicts. He also blamed eroding tort reforms, inflated lifetime care plans, verdict anchoring, litigation funding and a general lack of trust in corporations. Tyson recommended defusing the jury’s anger by accepting responsibility, personalizing the corporate defendant, giving the jury an alternative verdict dollar amount to the plaintiff’s, and arguing pain and suffering damages.
The growth in data privacy requirements is bringing new levels of complication to the process of protecting data. From the European General Data Protection Regulation to the California Consumer Privacy/Privacy Rights Act and beyond, data privacy requirements are coming into play for nearly every business. During the session titled Data Privacy Around the Globe — What Does it Mean for MPL?, panelists discussed strategies for staying on top of current mandates and preparing for future changes.
It may seem like artificial intelligence (AI) entered our collective consciousness just a few months ago, but companies across the insurance industry are already leveraging AI to improve business performance and provide a competitive edge. During the session Perspectives on AI and the Impact of Advanced Technology on Insurance, panelists from the global management consulting firm McKinsey & Co. tackled how AI investment is shaping the business of insurance and the practice of healthcare. Perhaps the greatest impact AI will have on the insurance industry will be when it gains the ability to “predict and prevent” future claims, which the panelists estimated could become a reality as soon as 2025. In this scenario, manual underwriting will cease to exist for most personal and small business products; agents will use GenAI-based smart personal assistants to optimize their tasks as well as AI-enabled bots to find potential deals for clients.
The session titled Mistake or Crime? The Criminalization of Healthcare Errors focused on the 2022 prosecution of RaDonda Vaught, a nurse who was found guilty of criminally negligent homicide and gross neglect for a fatal drug error made during her employment at Vanderbilt University Medical Center in Nashville. The case highlights the gray area between civil and criminal negligence. At issue was whether it is ever appropriate to pursue criminal charges in cases of medical error, noting that doing so could inhibit the open communications necessary to improve patient safety, or whether some mistakes are so egregious that only criminal prosecution would deliver actual justice. The panelists also offered MPL insurers strategies for reducing the risk of criminal prosecution for their insureds.
During a session on enterprise risk management (ERM), executives from four hospital systems discussed the evolution of their ERM programs through the extreme turbulence of recent years in order to continue to delivering valuable insights and navigational guidance for their organizations. Topics discussed included the impact of recent macro forces on risk profiles and organizational attitudes toward risk, the move to capture and measure ESG risks, the interest of outside stakeholders in ERM programs, and how ERM is viewed internally as a value creator across organizations as varied as health insurers, healthcare providers and medical liability insurers.
Because when medical staff have a positive, respectful and safe work environment their level of care increases and adverse outcomes decrease, it is incumbent on healthcare systems to identify improvements that can reduce caregiver burnout and stave-off resignations. During the session Designing Health Systems for Optimal Caregiver Wellness, University of Florida and Harvard trained psychologist Dan Shapiro shared insights from his 15 years specializing in the treatment of physicians and nurses. Shapiro, who has led multi-hospital, multi-disciplinary holistic burnout assessments and interventions, discussed practical solutions and programs that MPL insurers and healthcare systems can adopt to create safer environments and support the talent that is necessary to deliver high-quality healthcare.
During a session on the future of healthcare and MPL claims, moderator Ana Cifuentes, Aspen Re America senior vice president, guided chief executive officers from three major medical liability insurance companies through a discussion of the outlook for medical and hospital liability claims. Richard Anderson, MD, Edward Rand and Lisa Calder, MD, chief executive officers of The Doctors Company, ProAssurance Corp. and the Canadian Medical Protective, respectively, answered questions from the audience on topics ranging from social inflation to artificial intelligence.
During the always highly anticipated session MPL Industry Financial Update, Chad Karls, a principal and consulting actuary at the international consulting firm Milliman Inc., described the industry’s 2022 financial results as “decent” and the MPL market as “mostly” firm.
According to Karls’ presented data, the physician segment’s direct premium written averaged 1% growth from 2001 through 2022, but it averaged a more productive 5% growth from 2020 to 2022. Still, that number lagged behind the 8% and 11% average growth in direct premium written experienced by the hospital and other facilities segments, respectively, during that same 2020 to 2022 period.
Claims frequency was down 58% last year relative to 2001, but those gains have been partially offset by the number of jury verdicts in excess of $10 million climbing from 19 in 2014 to 52 in 2019. After the COVID-affected years of 2020 and 2021, there were 50 verdicts in excess of $10 million last year. There had been 17 such verdicts in 2023 as of April 30.
