The Liability Impacts of Healthcare Reform

liability-impacts-healthcare-reform-250x324February 2014

Advisen hosted a webinar and wrote a white paper that looks at the forces at work in the healthcare sector and how they are changing the liability exposures of hospitals and other healthcare organizations. The 9-page paper sponsored by OneBeacon Professional Insurance also examines the evolving role of the risk manager in this dynamic sector.

Examining Healthcare Reform and the Affordable Care Act (ACA)

Signed into law in March 2010, the Affordable Care Act is only one aspect of broad reforms in how healthcare is delivered and paid for that has swept across the U.S. over the past decade. Hospitals and other healthcare organizations have long recognized the need to reel in costs and improve outcomes. Even without the ACA, healthcare delivery models almost certainly would be much different today as compared to only a few years ago.

Patients seemingly are benefiting from healthcare reform, but changes to delivery and payment models are not without risks to healthcare organizations. The more expansive continuum of care now provided by many organizations has altered their risk profiles, presenting risk managers with new challenges in identifying and addressing new and altered exposures. These changes in risk profiles principally are in the professional liability realm, but also encompass other liability risks including network security risks and the exposures of directors and officers, as well as various types of operational risks.

New healthcare delivery models, including the accountable care organizations (ACOs), relies on a team approach to interdisciplinary care. The success of these new healthcare delivery models relies in large measure on healthcare practitioners efficiently coordinating their activities. As a result, the ACA offers incentives for converting paper records to electronic health records (EHRs) that can be shared across various healthcare settings. According to the U.S. Department of Health and Human Services, “using electronic health records will reduce paperwork and administrative burdens, cut costs, reduce medical errors and most importantly, improve the quality of care.” According to the CDC, in 2013 78 percent of U.S. office-based physicians used some form of electronic record, with 48 percent having systems that met the criteria for a basic system.