The digital healthcare revolution has taken the country by storm – an exciting new area, where opportunities abound for commercial agents. This rapid growth, was fueled by a combination of changing lifestyle trends, technological advancements and a shortfall in healthcare professionals. And digital healthcare has delivered – from remote consultations and patient monitoring, to electronic health records and health information exchange (HIE). But there is a dark side to this revolution – The potential for a corresponding explosion in malpractice claims.
This rapid growth of technology within healthcare has introduced new dimensions of professional liability that are as yet uncertain and unregulated. From misdiagnosis due to the limitations of examination by webcam, to the potential hacking of online medical monitoring systems, the vulnerabilities are numerous and unsettling.
When this is combined with the insatiable American appetite for litigation and the increasing severity of claims, it opens a Pandora’s box of potential liabilities — and uncertain E&O exposure to commercial agents.
The Promise of Convenience vs. The Risk of Misdiagnosis
Telehealth consultations have certainly made it easier for patients to seek medical advice, especially when they’re unable to travel or in remote locations
They have also helped alleviate wait times brought about by staff shortages in the industry. However, there are still questions about the quality of care provided remotely.
Real-World Case: Webcam Diagnosis Leads to Wrong Treatment
In one real-world example, a New Jersey patient was prescribed antibiotics via a telehealth consultation for what the physician presumed to be a bacterial skin infection. Weeks later, the problem persisted and was correctly identified as a fungal infection through an in-person visit, delaying proper treatment.
A 2019 study published in JAMA Dermatology, for instance, found that teledermatology misdiagnosed certain skin conditions 17.6% of the time compared to in-person consultations.This rate is unlikely to have changed since then, as image quality limitations, combined with the inability of patients to properly photograph liaisons remains the major hurdle.
Data Integrity and Online Medical Monitoring
The convenience of remote patient monitoring with Internet of Things devices can’t be overstated, but this comes with a whole new set of cybersecurity vulnerabilities. Medical devices like pacemakers, insulin pumps, and continuous glucose monitors can be accessed remotely for real-time data, but this also opens up the possibility of hacking. Ransomware cases take on a whole new level of urgency when the lives of patients attached to the hacked monitoring devices are at stake.
Real-World Case: Hospital Sued Over Pacemaker Data Breach
In a groundbreaking case, a hospital in California faced legal repercussions when its online patient monitoring system was hacked, compromising the data and settings of pacemakers for multiple patients. While in this instance, no physical harm came to the patients, the breach exposed the hospital to significant liability concerns around data privacy and the integrity of remote monitoringx.
AI Algorithms and Clinical Decision Support
Artificial Intelligence (AI) has been increasingly integrated into diagnostic procedures, and while it holds great promise, its use is fraught with potential legal complications. AI is only as good as its algorithm programming. When slight variations of a condition — not yet built into this algorithms — reveal something different, the potential for misdiagnosis and resulting litigation is rife.
Real-World Case: AI Misreads X-Ray, Negligence Claim Filed
An AI system at a Texas hospital mistakenly identified a benign tumor as malignant, leading to unnecessary treatment for the patient. A subsequent lawsuit questioned not just the physician’s reliance on the AI but also the accountability of the tech companies providing these AI solutions. becomes a subject of concern, particularly in a country where medical malpractice suits are common.
America’s Insatiable Appetite for Litigation
All these complexities are accentuated by America’s insatiable culture of litigation. According to a 2022 report from the American Medical Association, 31.2 percent of physicians reported that they have had a medical liability lawsuit filed against them at some point in their careers.
More alarming than the number of lawsuits, are the amounts awarded by juries in malpractice verdicts. 2022’s verdicts included a jaw-dropping $111 million verdict in Minnesota involved a young man who suffered permanent injuries due to misdiagnosis and delayed treatment of acute compartment syndrome. Negligence during childbirth in Iowa resulted in a $97.4 million award and a wrongful death in Georgia stemming from a series of errors at a psychiatric facility, resulted in a record-breaking $77 million payout.
These colossal verdicts — among the largest ever seen in medical malpractice litigation — serve as cautionary tales for healthcare providers and point to a growing demonization of the medical establishment by the public; and a desire by jurors to not just compensate, but to enrich the plaintiffs at the expense of healthcare providers.
These cases also highlight the acute risks and devastating consequences of medical errors, adding another layer of complexity to an already uncertain professional liability landscape.
The surge in digital healthcare services, from telehealth consultations to remote patient tracking and AI-driven diagnoses, has unleashed a torrent of unforeseen vulnerabilities that remain ambiguously regulated. As the tide of technology rises in healthcare, commercial agents find themselves navigating treacherous waters, needing to meticulously assess all possible risks. This includes those emanating from affiliations with third-party entities like IT service providers, amidst a convoluted and ever-shifting legal quagmire.
Given the tempestuous nature of this sector, it’s imperative for agents to partner with a seasoned broker like Westwood. We have the resources and experience to keep pace with the constantly changing insurance landscapes and the evolving legal storm fronts.
Don’t risk leaving your Digital Healthcare Clients adrift. Contact Dale Nelson at 855-351-7487 for a comprehensive risk assessment and guidance on the safest, most suitable coverage.
insurance for allied health care
insurance for hospitals
Hospital Insurance typically covers all or part of the potential liability for hospital services. It includes medical malpractice, accidents involving hospital employees and equipment, care during surgery or any other invasive treatment, after-hours care arrangements by staff who need help with their children and more.
insurance for long term care facilities
Long term care facilities must protect themselves against potential liability arising from incidents within their facility. Westwood can help you negotiate a package tailored to your long term care facility client.
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traditional insurance products
Westwood have fostered exceptional relationships with underwriters and we go to great lengths to keep abreast of their latest products, changes in requirements and restrictions, including having weekly calls with the carriers, which you can see here, by joining our insurance insider group.
- Professional Liability Insurance (Medical Malpractice Insurance)
- General Liability Insurance
- Business Owner’s Policy (BOP Insurance)
- Excess and umbrella coverage
- Cyber Liability Insurance
- Telemedicine Malpractice Insurance
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Westwood President, Michael Richards has extensive experience in setting up alternative structures for larger clients. Here are some examples:
- Starting a Single Parent Captive (Pure captive)
- Joining a Protected Cell Captive (Segregated Cell)
- Micro Captive Insurance
- Group Captive Insurance
- Risk Retention Group (RRG)
- Special Purpose Vehicle (SPV) Captive
- Stand alone ERP (extended reporting period)
- Loss Portfolio Transfers (LPTs)
If you think your client could be large and stable enough to benefit from starting or participating in a captive or has a special need for another alternative structure, contact Michael Richards now by phone: 855 351 7487.