Mining Medical Malpractice Claim Data to Improve Health Outcomes

Transcription

1 Mining Medical Malpractice Claim Data to Improve Health Outcomes Transforming Healthcare Swiss Re Centre for Global Dialogue Rüschlikon, Switzerland Michael Maglaras, CIC Principal Michael Maglaras & Company

2 There are no mistakes all events are blessings given to us to learn from. Elisabeth Kübler-Ross, M.D. Born July 8, 1926 Zurich, Switzerland 2

3 Why Is This Copper-plated Door Latch Important to the Future of Health Care Delivery Throughout the World? AND How Is This Door Latch Connected to the Medical Malpractice Liability Insurance Marketplace? 3

4 Today We ll Discuss: 1. The connection between an individual liability claim and the improvement in individual patient care 2. How captive insurers and their reinsurance supporters contain a wealth of claim data that can contribute directly to the success of U.S. Accountable Care and care worldwide 3. How some commercial insurers/reinsurers and captives traditionally market competitors are now collaborating to reduce claims and improve margins 4

5 Whatever TrumpCare Becomes It Won t Change: Hospital merger and acquisition activity Increased emphasis on quality of outcomes Payments to providers based on quality of outcomes Consolidations of U.S. mutual liability insurers The need to mine claim data to improve results 9

6 Total Professionally Active Physicians in the U.S. = 908, ,840 Primary Care Physicians 473,668 Specialists Source: The Henry J. Kaiser Family Foundation, April

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9 Understanding the U.S. Health Care System U.S. health care spending as a percentage of GDP exceeds that of any other developed nation Americans use health care facilities and physicians less than other developed countries but are greater users of expensive technology Despite heavy investment in health care the U.S. has poorer than average results in key measures, such as life expectancy, the treatment of chronic conditions, and fetal death 13

10 It s All About Cost It s All About Quality Infant Mortality (per 1,000 births) * Health Care Cost (as % of GDP) ** Per capita health care costs *** USA: $9,086 Norway: $6,170 Japan: $3,713 France: $4,361 United Kingdom: $3,364 Switzerland: $6,325 * Source: US Central Intelligence Agency 2016 Data ** Source: The World Bank 2015 Data *** Source: The Commonwealth Fund 2016 Data (33 countries sampled) 14

11 Establishing Some Truths: Improving health care quality is a global concern Reducing health care expenditure as a percentage of GDP is a critical concern Improving quality of outcomes, procedure by procedure, and intervention by intervention, knows no boundaries Historical health care liability claim data is an under-utilized quality resource worldwide 15

12 Establishing Some Truths (cont d): A U.S. medical malpractice claim involving true liability is always a patient safety failure, and is: an opportunity to learn an opportunity to improve a clinical process, procedure, or intervention an opportunity to improve reimbursement and corporate margin a reputational concern in the digital age 16

13 We Are Moving from a Health Care Liability Claim Representing an Isolated Event 17

14 To a Matter Affecting Every Aspect of Operations Acquisition Risk Reputational Risk Reimbursement from Payors Morale Risk Staffing Risk Insurance Risk Recruitment Risk Grading Risk 18

15 Embracing Data to Force Better Outcomes Health care has been slow to respond, unlike other industries, to embrace data to force change The nuclear, aviation, and automobile industries have all quickly responded to critical safety failures by using: Data Analytics Process and Design Standardization Technology to Reduce Human Error Monitoring, Testing, and Training 19

16 $900'000 $800'000 $700'000 $600'000 $500'000 $400'000 $300'000 $418' (green) and 2015 (blue) Average Paid Claim Data (Selected Physician Specialties) $418'391 $526'331 $544'212 $502'222 $664'331 $522'223 $665'303 $718'319 $793'719 $829'205 $200'000 $179'617 $100'000 $0 Int. Med. Emerg. Med. Ortho. Surg. OB/GYN Pediatrics Neurosurg. Source: Physician Insurers Association of America claim data (uncapped insurance limits; not inclusive of defense costs) 20

17 Obstetrical Claim Frequency and Severity: 2005 and Average paid OB/GYN claim = Average paid OB/GYN claim = $664,331 (1) $522,223 (1) Number of claims (all causes) = Number of claims (all causes) = 90 per 1,000 births (2) 78 per 1,000 births (2) Average claim (paid by all available sources) for birth injury = $984,156 (3) Average claim (paid by all available sources) for birth injury = $1,201,109 (3) Notes: (1) PIAA 2015 Closed Claim Study (2) The Doctors Company (3) PIAA 2015 Closed Claim Study and Closed Claim Studies from Ohio, Michigan, Virginia, and California 21

18 The Evolution of U.S. Health Care Liability Captives Stage 1: Replacement Capacity (1976 to 2000) Early years dominated by academic medical centers Captive growth driven by Medicare regulation change Insistence by reinsurers on deeper retentions beginning in the early 1990 s 22

19 The Evolution of U.S. Health Care Liability Captives Stage 2: Panic (2000 to 2007) Nationwide claim severity provokes rapid captive expansion St. Paul closes its doors captives step in to replace capacity Increasing claim severity provokes deeper retentions Commercial market abandons certain physician specialties 23

20 The Evolution of U.S. Health Care Liability Captives Stage 3: Market Dominance (2007 to 2015) In some states, captives dominate market segments Consolidations of PIAA companies Emphasis on quality and improved outcomes positively affects captive financial results Employed physician exposures, Accountable Care, etc., drives captive growth 24

21 The Evolution of U.S. Health Care Liability Captives Stage 4: The Age of Accountable Care PIAA companies lose some market share to hospital hiring of physicians Hospital liability exposure growth increases through physician employment Liability captives enter the health insurance arena through capitation programs Captive budgets increase to meet risk management/quality objectives 25

22 The Evolution of U.S. Health Care Liability Captives Stage 5: The Age of Data The mining of captive claim and cause-of-loss data begins What happened? Why did it happen? Who caused it? Will it happen again? The value of captive claim data as a tool in a gloves off marketplace 26

23 Claims Force Change The Old Paradigm: The New Paradigm: Suits, claims, or potentially compensable events are isolated balance sheet events Little transparency with patients and families Little connection between causality and quality improvement No connection between claim activity and the ability for the parent to compete Suits, claims, or potentially compensable events begin to affect reputation and competitiveness A reason for complete transparency with patients and families A stronger connection between causality and quality improvement Using primary/excess claim data to improve the reputation and competitiveness of the parent 27

24 Embracing Data to Force Better Outcomes In the EU, there were an estimated 4.5 million episodes of facility-acquired infection in 2015, with 147,000 deaths * In the U.S., there were 822,000 episodes, with 75,000 deaths in the same period ** Data suggests that 11.3% of the episodes resulted in legal action, including a demand resulting in a claim ** * Source: The European Center for Disease Prevention and Control ** Source: U.S. Centers for Disease Control 29 29

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