Mining Medical Malpractice Claim Data to Improve Health ...d81b6505-d90e-44f5... · Mining Medical...

Mining Medical Malpractice Claim Data

to Improve Health Outcomes

Michael Maglaras, CIC

Principal

Michael Maglaras & Company

Transforming Healthcare

Swiss Re Centre for Global Dialogue

Rüschlikon, Switzerland

“There are no mistakes…

all events are blessings given to us to learn from.”

Mining Medical Malpractice Claim Data to Improve Health Outcomes

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Elisabeth Kübler-Ross, M.D.

Born July 8, 1926

Zurich, Switzerland

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Why Is This Copper-plated

Door Latch Important to the

Future of Health Care Delivery

Throughout the World?

How Is This Door Latch

Connected to the Medical

Malpractice Liability

Insurance Marketplace?

AND

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

Today We’ll Discuss:


4

9


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

Whatever “TrumpCare” Becomes…It Won’t Change:

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Total Professionally Active Physicians in the U.S. = 908,508

434,840 Primary Care Physicians

473,668 Specialists

Source: The Henry J. Kaiser Family Foundation, April 2016

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12

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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

Understanding the U.S. Health Care System

Infant Mortality

(per 1,000 births) *

Health Care Cost

(as % of GDP) **

Per capita

health care costs ***

• USA: 6.1 17.1 $9,086

• Norway: 2.4 9.4 $6,170

• Japan: 2.1 10.2 $3,713

• France: 3.6 11.6 $4,361

• United Kingdom: 3.8 8.8 $3,364

• Switzerland: 3.9 11.1 $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


It’s All About Cost…It’s All About Quality

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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

Establishing Some Truths:

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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

Establishing Some Truths (cont’d):

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We Are Moving from a Health Care Liability Claim Representing…

an Isolated Event…

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…To a Matter Affecting Every Aspect of Operations

Acquisition Risk

Reputational

Risk

Reimbursement

from Payors

Morale Risk

Staffing Risk

Recruitment Risk Grading Risk

Insurance Risk

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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

2005 (green) and 2015 (blue) Average Paid Claim Data

(Selected Physician Specialties)

Source: Physician Insurers Association of America claim data (uncapped insurance limits; not inclusive of defense costs)

$179'617

$418'391

$544'212

$664'331

$665'303

$793'719

$418'112

$526'331

$502'222

$522'223

$718'319

$829'205

$0

$100'000

$200'000

$300'000

$400'000

$500'000

$600'000

$700'000

$800'000

$900'000

Int. Med. Emerg. Med. Ortho. Surg. OB/GYN Pediatrics Neurosurg.


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2005 2015

Average paid OB/GYN claim =

$664,331 (1)

Average paid OB/GYN claim =

$522,223 (1)

Number of claims (all causes) =

90 per 1,000 births (2)

Number of claims (all causes) =

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)

Obstetrical Claim Frequency and Severity: 2005 and 2015

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


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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

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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

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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

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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

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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

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The New Paradigm:

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

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

The Old Paradigm:

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Claims Force Change


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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

Basic Copyright Notice & Disclaimer

©2017 This presentation is copyright protected. All rights reserved. You may download or print out a hard copy for your private or internal use. You are not permitted to create any modifications or derivatives of this presentation without the prior written permission of the copyright owner.

This presentation is for information purposes only and contains non-binding indications. Any opinions or views expressed are of the author and do not necessarily represent those of Swiss Re. Swiss Re makes no warranties or representations as to the accuracy, comprehensiveness, timeliness or suitability of this presentation for a particular purpose. Anyone shall at its own risk interpret and employ this presentation without relying on it in isolation. In no event will Swiss Re be liable for any loss or damages of any kind, including any direct, indirect or consequential damages, arising out of or in connection with the use of this presentation.

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