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Organizational Changes
This past year we completed the execution of the HCPL organizational structure changes that we announced and launched in 2021 to transform our competitive position and integrate NORCAL. The HCPL five-region organizational structure was implemented in late 2021 to align Underwriting, Claims, Business Development, and Risk Management on a regional basis to deliver superior service to our agency partners and customers. We facilitated collaboration across HCPL’s five geographic regions to increase synergies and business development opportunities. We also fully implemented and staffed the HCPL production underwriting and business development models.
Our position as one of a small handful of specialist HCPL companies with a national platform and the ability to write both standard physicians and specialty business means we are currently ahead of most in the market in despite the challenges.
Challenges
Over the past year, we continued to see a volatile market with outsized jury verdicts and severity prevalent. While the primary driver of increased severity is social inflation resulting from unpredictable jury behavior and attitudes toward institutions/expert authority figures, other contributing factors include higher defense costs such as expert witness fees, higher demands from plaintiff attorneys, and medical care inflation. Although “nuclear verdicts” can be reduced or overturned on appeal, their direct costs are still significant, and the publicity generated by the initial award serves to raise the bar on future plaintiff attorney demands and expectations.
In addition, AM Best maintained a negative outlook on the MPL sector partially due to rate adequacy concerns and rising loss cost trends.
Transformation, Sustainability, and Innovation
Our ability to survive and thrive in a challenging and shrinking MPL industry in a way that is fiscally sustainable through the insurance and economic cycles requires us to transform our business through product, technology, and other innovations.
Over the past year, we have capitalized on the national platform we now operate in via the NORCAL acquisition by gaining efficiencies and reducing expenses through technology beginning with the consolidation of IT systems. We are using technology to deliver best-in-class customer service via the Enterprise Digital Experience team and other units of the newly formed Business Operations, Logistics, and Transformation (BOLT) department.
We have also leveraged the advantage of the data available from being the third largest MPL carrier and our third-party analytics partner relationship for accurate pricing, loss experience stability, and improved customer acquisition targeting.
Growth Initiatives
It’s no surprise that new business has been difficult to come by during the pandemic. Failure to write adequate new business means we shrink—even carriers with the highest retention must replace 10% of their business each year to maintain level premiums. While product development will play a major part in growth and improved retention will lessen the pressure, we believe specific growth initiatives are important. In 2022, these included:
- Completing our production underwriting implementation
- Focusing the Business Development department on revenue generation
- Continued disciplined underwriting, product diversity, and focused creativity
- Hospital growth in core states
- Improving the distribution system in Senior Care
- Increased assumed reinsurance and Inova segregated portfolio cell (captive) business
We did see solid retention and rate gains in the Specialty P&C segment. In this competitive market, the strong retention is a testament to the efforts and dedication of our operational teams, as our customer focus continues to make ProAssurance an appealing choice for our insureds.
Looking Ahead
Our next step is to maintain our momentum into 2023. “We believe all of these efforts are positioning the company well as we navigate the challenges of competitive pricing and economic and social inflation,” said Boguski. “We are confident in our ability to manage through this challenging environment.”
Rand added, “It’s been a couple of years of change for all of us, and we believe that the reliability and customer focus of our operational teams, coupled with a long-standing reputation for excellence, make ProAssurance an appealing choice for insureds in a competitive marketplace.”
We are looking forward to continuing to be the carrier of choice for our agency partners. Thank you for being such an integral part of our growth this year. We can’t wait to see what we accomplish together in 2023.
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Live webinars were held throughout the year.Recordings are also available on-demand by signing into MyACCOUNT or ProAssurance.com.
- January – Fundamentals of Follow-up: Minimize Diagnostic Error and Improve Patient Safety
- March – Difficult Patient Relationships: Rehabilitate vs. Terminate
- March – Cultural Competency: Guard Against Implicit Bias in Patient Care
- April – Violence in the Office Practice Setting: Preparation and Response
- May – Infection Prevention and Control: Improving Patient Safety
- June – Opioid Prescribing: Keeping Patients Safe
- August – Healthcare Regulatory Update: Protecting Your Practice
- September – Crossing the Line: Examining Professional, Personal, and Ethical Boundaries
- October – Healthcare Cyber Security: Increasing Awareness and Understanding Threats
- November – Medication Management: Minimizing Errors & Improving Patient Safety
ProAssurance Insureds can sign in at ProAssurance.com to take a seminar at their convenience.
- Infection Prevention and Control: Improving Patient Safety
- Workplace Violence in the Office Practice Setting: Preparation and Response
- Prescribing Controlled Substances
- Cultural Competency: Guard Against Implicit Bias in Patient Care
Claims Rx provides claims-based learning to improve patient safety and reduce the risk of a claim. View the library.
January – Workplace Bullying: How it Affects Patient Safety & Liability Risk Exposure- February – Is it Safe to Send That Text?
- March – Don’t Fumble the Hand-off
- April – Disruptive Patient Behavior: Mitigation and Management Strategies
- June – Medical Assistants: Strategies for Increasing Patient Safety and Reducing Liability Risk
- July – Advanced Practice Professionals: Understanding Your Exposure to Liability
- August – Diabetes: Risk Reduction Across the Continuum of Care
- September – Sexual Misconduct Allegations: Liability, Ethics, and Professionalism
- October – Treating Family, Friends, and Colleagues, Liability, Ethics, and Professionalism
- November – Delayed Diagnosis of Lung Cancer
Vital Signs provides closed claims studies by specialty. View the library.
February – Psychiatry- March – Long-term Care
- April – Anesthesiology
- May – Healthcare Extenders
- June – General Surgery
- July – Internal Medicine
- August – Radiology
- September – Pediatrics
- October – Emergency Medicine
- November – Ob-gyn
Our popular video series returned in 2022.
Workarounds
Alternative care deliveries may appear to function adequately, until an adverse event occurs. In this video learn about risks when workarounds are utilized in the delivery of healthcare.
Service Animals
What happens when a patient shows up at an office or facility with a dog and claims that it is a service animal? In this video, we review the difference between service animals and emotional support animals.
Advance Directives
Advance directives are one of a number of areas where patients’ rights and healthcare operations intersect. In this video, learn about the potential risk exposures posed by an organization’s failure to properly follow the documented wishes of a patient.
Market Cycle
The Numbers Behind the Shrinking Physician Market - A number of factors play into the state of the healthcare liability market, but the physician “market shrink”—whether from physicians leaving healthcare or choosing to be unemployed—is a major driver of risk and pricing decisions.
A Difference that Makes a Difference
Can Do vs Have Done - Many national carriers boast the same abilities, but there is a difference between the company that started offering a service this year and those that have been in the market for decades.
Risk Management
One-on-One Inspiration - ProAssurance’s Risk Management Consultants spend hours of valuable time with our insureds through consultations, assessments, and other encounters. Our team shares stories of the value of those conversations in their own words.
Telemedicine
Telehealth Use Remains Above Pre-Pandemic Levels While Compliance Risks Remain - The use of telemedicine rose significantly over the past two-plus years. However, quick adoption is rarely seamless, leading to a rise in liability concerns.
Ratios
Accident Year Loss Ratio - This issue took a deep dive into the ratios and figures ProAssurance teams rely on to do their work. Each provides unique value, but our look at the accident year loss ratio provides a helpful intro you can use to train new agents.
NORCAL Year One
Serving a National Market with Local Expertise - One of the largest changes ProAssurance made in the past year was the transition to a regional model—allowing our team to provide local expertise for you and your clients in a more effective way.
50/50
California/Modernizing MICRA - In addition to the likely implications to the California claims environment, we anticipate the MICRA Modernization will become a model for tort reform on a broader scale.
Practicing Post-Roe
Ectopic Pregnancies - The rules and regulations surrounding abortions are changing rapidly on a state-by-state basis. A hot button issue continues to be how to manage ectopic pregnancies while minimizing exposure to liability or criminal allegations.
New Business
Meet Your Underwriter - With the launch of our new series, we introduced you to some of our underwriting team, and what role they play in the organization.
Natural Disasters
Mitigation & Preparation - The effects of natural disasters leave healthcare entities at risk for liability concerns. Our Risk Management team highlights key issues practices should be aware of, and how to mitigate the risk.
Trade Shows and Events
Making Memorable Connections - We share a bit about how live events and trade shows play into our marketing and brand strategy—and how you can take advantage of what we’ve learned.
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As you may recall from our February 2022 issue, ProAssurance conducts an annual retention campaign thanking our insureds and offering them a complimentary resource, usually a book.
Involving a series of direct mails, we’ve seen great success in the past with reply rates up to 25%. Last year’s campaign was largely successful, with an overall response rate of approximately 23%. This year’s campaign saw a bit of a drop-off, with reply rates of around 13%.
2022 CAMPAIGN RESULTS
In 2021, we adapted the retention campaign to welcome NORCAL Insurance Company policyholders to ProAssurance. The response rate from NORCAL insureds was better than expected at 17.5%, which we viewed as excellent given our audience’s limited familiarity, at the time, with ProAssurance. This year, however, the NORCAL insureds’ response rate lagged—at about a third of the rate of ProAssurance insureds—and lowered the total response rate in 2022 to about 13%. We are excited about our upcoming 2023 campaign and look forward to further developing our insured relationships.
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The 2023 retention campaign will feature Deep Medicine: How Artificial Intelligence Can Make Healthcare Human Again by Eric Topol, MD. Topol is a world-renowned cardiologist and executive vice president of Scripps Research. He is one of the top 10 most-cited researchers in medicine. Aside from Deep Medicine, he has published two other best-selling books: The Creative Destruction of Medicine and The Patient Will See You Now. In Deep Medicine, Topol explores how artificial intelligence (AI) could dramatically reshape the healthcare industry, from how illnesses are diagnosed to the ways patients are cared for. He argues that the best outcomes stem from collaboration between doctors and AI, and implores decision makers to leverage AI for routine healthcare tasks. According to Topol, AI has the potential to transform everything doctors do, from notetaking and medical scans to diagnosis and treatment, greatly cutting down the cost of medicine and reducing human mortality. By freeing physicians from the tasks that interfere with human connection, AI will create space for the real healing that takes place between a doctor who can listen and a patient who needs to be heard, he says.
For more information on how our retention campaign works, see our February 2022 issue. If you’d like to receive the complimentary book, email AskMarketing@ProAssurance.com letting us know your mailing address. We appreciate everything you do to place and retain business with ProAssurance. If you have any questions about the retention mailings, feel free to email AskMarketing@ProAssurance.com.
MICRA Modernization: Keeping You Informed
The long-anticipated MICRA Modernization legislation takes effect January 1, 2023. Overall, we believe the new law strikes a sensible balance: It provides compensatory justice for injured patients while maintaining an overall healthcare system that is accessible to all Californians.
Across the country, state tort reform laws are continuing to erode as the constitutionality of such laws is consistently challenged. Overall, we’re pleased that this new law in California will extend the long-term predictability and affordability of MPL insurance for those providing medical care in California, while implementing a fair and reasonable increase to limits on non-economic damages.
Earlier this year, ProAssurance professionals Gina Harris, Lucy Sam, and Shep Tapasak discussed important key provisions of the new law in “Managing the New MICRA: Ways This California Law Affects Health Care” in Risk & Insurance.
To learn more, visit the California Medical Association’s MICRA Modernization 2022 site. The full text of the law is available on the California Legislative Information site.
Written by Mace Horoff of Medical Sales Performance
Mace Horoff is a representative of Sales Pilot. He helps sales teams and individual representatives who sell medical devices, pharmaceuticals, biotechnology, healthcare services, and other healthcare-related products to sell more and earn more by employing a specialized healthcare system.
Have a topic you’d like to see covered? Email your suggestions to AskMarketing@ProAssurance.com.
“As I was reading the Top 10 2023 predictions, the first eight were about the business of medicine (reimbursement, potential mergers and acquisitions, and venture capital dollars), science (impacts of “big pharma” and technology), and care delivery (hospital home). What caught my interest were the last two addressing human capital(physicians, nurses, other healthcare providers, and leaders).
Investing in humans, taking care of humans, and curating leaders who understand providing care is both an art and science might be a game changer? Taking care of our physicians, nurses, and other healthcare professionals first, I believe, is the most important key to unlocking true value-based patient care. Patients and families remember those physicians, nurses, and providers who are compassionate, have time to hold their patients’ hand, look them in the eye, sit with them, and connect human-to-human. They are as the commercial says ... priceless. We have made huge advances in technology and science, and we will continue to do so. As we look to the future, maybe we should invest time in our physicians and care givers by cultivating the art of healing?”
“It is interesting from a risk management perspective to see the effects of private equity investments in healthcare. A recent JAMA article studied insurance claims to identify medical practice changes after acquisition including increased healthcare spending and utilization. Injury from overtreatment can be difficult to defend.”
“My 2023 prediction is that Amazon will acquire a major pharmacy chain or a grocery chain with a pharmacy operation (Whole Foods does not have a pharmacy). And my 2024 prediction is it will be blocked by the FTC. The author addresses Big Tech and healthcare in #7 but thinks an acquisition like this is unlikely.
One more tech-based healthcare prediction: I think Zoom will deploy some emergency health alerts at scale, and eventually all online meeting companies will have some sort of health monitoring embedded in their services. Think ‘what iPhone now does to detect car crashes, Zoom will do for strokes.’”
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