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What’s Next for the Medical Professional Liability Industry? Challenges and Opportunities in an Evolving Market

Insights from Bill Burns, Conning, and Bill McDonough, Constellation


Government Relations

COVID-19 Information Center

Inside Medical Liability

Second Quarter 2020



Cover Story

Leverage Innovation for a Thriving MPL Industry

In a firming market, insurers and providers must adapt creatively to changing circumstances



Many of the Medical Professional Liability (MPL) Association member companies were established in the 1970s so that physicians could protect themselves while caring for patients. Fifty years later, that mission remains.

However, the context in which MPL insurers carry out that mission has drastically changed. Risk has escalated, the provider environment has transformed, and organizations themselves are evolving. The broader landscape of risk and pricing—as well as customer service—is also altering other markets in game-changing ways, through the use of data analytics, artificial intelligence, and machine learning.

But the basic calculus on which the industry rests hasn’t changed. In many cases, risk is still assessed based on a practitioner’s specialty, location, and prior claims record, noted Bill Burns, director of insurance research at Conning, a global investment management firm.

“I think you could take an underwriter who hasn’t assessed MPL risk since the 1980s and that person could step in and feel pretty comfortable doing it today,” Burns said. “The pricing model has not really changed since that time. However, I think healthcare is ready to veer off in a different direction, which presents MPL insurers with opportunities and challenges.”

These opportunities and challenges range from determining new risk-pricing models to deciding whether to expand into different markets and lines of business and everything in between. For MPL insurers and their practitioner clients to thrive, they must adopt innovative and creative ways of evolving their businesses.

Building an agile, innovative organization requires an innovative culture. “Culture eats strategy for breakfast,” said Gloria Everett, President and CEO of The Mutual, an MPL insurer, quoting management guru Peter Drucker. “We set the tone each year with an executive retreat off-site, then open up the process to our staff and discuss specific goals and objectives very openly.”

As she noted, pausing periodically to foster an innovative corporate culture isn’t easy amid the pressures of day-to-day business. “One reason we have great employee retention is that we attend to culture and fostering that spirit of innovation,” she said.

Adopting innovative and creative ways of evolving MPL businesses may mean expanding their markets. For others, it may translate into recruiting a different type of employee. Bottom line: organizations need to examine every aspect of their operations to ensure that they are prepared to meet the needs of the healthcare industry both today and tomorrow.

Determine your direction

It’s impossible to innovate effectively if you don’t understand your market position and haven’t determined your organizational goals and objectives. If those aren’t clear, it is essential that a company’s C-suite and board of directors make it a priority to provide that clarity of purpose. It is usually unwise to promote growth solely for the sake of growth—that’s potentially dangerous, because it can mean underpricing the competition and squandering your capital unproductively. If you decide to grow, you must have a coherent strategy to achieve that growth. For many companies, that involves diversification.

“The healthcare industry and our customers’ needs have changed significantly in recent years, and diversifying our business to meet those needs has been a key focus for us,” said Jason Sandner, chief operating officer and chief financial officer at Curi, an MPL insurer that has diversified into wealth management, well-being programs, and other products and services designed to help physicians and their families in medicine, business, and life.

Coverys is another company that has successfully diversified. “We’ve expanded our geographical reach significantly into the London market through a Lloyd’s syndicates, which gives us access to global markets,” said Gregg Hanson, Coverys CEO. “A longtime leader in medical education, we’re extending those efforts into patient education. We also have been asked to assist a country in the Middle East in helping develop a national health service in regard to medical liability.”

Burns observed that diversification could be a productive strategy, but isn’t for every company. In fact, some insurers might be more comfortable shrinking down to a size where they can comfortably maintain their margins. If you do decide to expand, do it with care because missteps can be costly.

“For example, if your company is primarily focused on doctors, you don’t want to venture recklessly into the hospital market,” Burns said. “It can be a very dangerous pool to swim in because the buyers and the established hospital insurers likely better understand the risk and price trade-offs, which means you could get business, but it might cost you.” He suggests diversifying within your own region, with smaller hospital systems or potentially with complementary services.

Capitalize on talent and human capital

Strategically cultivating the MPL workforce with an eye on the future will help establish and maintain an innovative culture. MDA National, an MPL mutual in Australia, is focused on creating a positive work environment that supports MDA National’s staff in their work with the company’s member physicians. Ian Anderson, CEO of MDA National, which operates three offices, in Perth, Sydney, and Melbourne, with 120 staff members, believes that providing autonomy to staff members facilitates innovation.

“When we support our staff with performance management, appropriate salary structures, a positive work environment, and clarity of purpose, they can do their jobs of making a difference for our medical professional members,” he said.

It is also important to embrace a diverse range of expertise and background in hiring. At Curi, the talent hiring process focuses on broadening organizational perspectives, Sandner related. “Our hires don’t all need to have MPL experience,” he said. “We’re focused on hiring individuals with strategic thinking and leadership capabilities who know how to solve problems and deal with challenges.” Curi hires for these types of softer intrinsic skills, then trains its hires to support the growing organization.

Manage technology and data

A major way that Coverys empowers innovation is through its Innovation Hub App, which can be downloaded in the Apple and Google App Stores, Hanson noted. “Our leaders are passionate about innovation, so we developed the Coverys Innovation Hub App. Anyone with an idea about how to innovate in MPL can share it through our app,” he said. “We have a team who will help think through the ideas and develop them further if they have merit.”

MDA National employs agile project management processes to break projects down into stages and iterate and improve until the project is complete. These same practices are highly applicable to software development and facilitated MDA in upgrading its technology capabilities, Anderson noted. This approach ensures that each project is completed in distinctive stages and then ultimately released to members.

“We’ve introduced a customer relationship management system and are implementing a new phase to improve the experience for our current and prospective members,” Anderson said. “We are also in the process of developing an app that our members can use on nonclaims-related matters and other administrative details, such as amount of coverage changes and download of policy documents.”

An often-ignored aspect of successfully deploying technology is refining processes and procedures for increased effectiveness and efficiency. Workflow and processes are a major current focus for Curi, Sandner said. “After six to eight years of expanding geographically and into new lines of business, refining our operational excellence is front and center,” he continued. “Our customers and our customer mix have changed, and we need to make sure that we have repeatable processes and workflows in place to service those relationships in a way that continually exceeds their expectations.”

MDDUS, a mutual MPL provider, leverages technology in the form of social media to reach diverse markets across the U.K. “Through channels on Twitter, Facebook, and LinkedIn, we can market to millennial and younger physicians with a broader and quicker reach,” said MDDUS Chief Executive Chris Kenny.

Tailor the customer experience

Listening to your client base is critical to innovating appropriately, according to Everett. “We have to listen—we aren’t a mega-company so the stakes are higher,” she said. “How we listen is changing because the ways doctors communicate is changing. Now they text or email—they don’t call like they used to.”

The Mutual’s solution to this sea change in communication ties into managing talent and human capital. “We’ve hired younger people who understand that dynamic so that they can communicate with our physician members where they are,” she said.

In Australia, MDA National offers a personal approach to support doctors who are confronted with a liability claim. “It’s devastating for a doctor and his or her family to be challenged professionally in that way,” Anderson said. “We use technology so we can free up our staff members to support our members in this situation. We also connect our members with colleagues who have gone through this experience who are willing to offer advice. We support them every step of the way—that’s embedded in our DNA as a mutual.”

MDDUS makes doctors available to answer the phone and talk with members about MPL claims. “It might seem bonkers having your most expensive staff handle calls, but when a distressed clinician gets an answer from a doctor it carries a lot more weight,” Kenny said. He noted that MDDUS provides a broad array of services and support to help the member physicians cope with the stress of liability and regulatory claims.

Facilitate an innovative culture

Innovation must be a continuous process. Fortunately for MPL insurers, there are many helpful resources, including those at the MPL Association in the form of support, education, and advocacy.

For Curi, a culture of innovation is baked into every aspect of the business. “Regardless of function or responsibility, everyone is always thinking about how to get better. We’re passionately curious about finding new ways to help the physicians we serve,” said Sandner.

That’s essentially the bottom line—improving your MPL organization on a daily basis while executing for your policyholders, members, and other stakeholders.



Amy Buttell is the editor of Inside Medical Liability.