Eric Lowenstein of Tego Insurance tells IB about the significant opportunities for brokers who dedicate themselves to ensuring medical practices and practitioners have the right insurance
Medical-related insurance can be a challenging space to work in – there are limited insurers, and even fewer are writing life sciences and clinical trials. Appetite is drying up amongst some insurers, and several others have retreated. Those still writing business are becoming more conservative about issues like vicarious liability and abuse liability, as well as restricting cover or adding sub-limits.
“It’s a complex area of insurance law, and removing cover can create significant uninsured losses and potentially expose brokers to E&O risk,” says Eric Lowenstein, CEO of Tego Insurance.
But not everything is dire, by any means; in many cases, the truth is that underinsurance tends to result more from the need for client education rather than limited capacity. Specialist insurers are still dedicated to providing coverage for the field – and Lowenstein believes brokers are key to helping plug the knowledge gap among Australian medical professionals.
“At the moment, we’ve got thousands of Australian medical practices with no entity medical malpractice insurance,” he says. “That creates untapped potential for brokers.”
Helping close the gaps
Medical practices often rely on individual medical practitioners to have their own insurance, which covers any adverse outcomes from their patient care, Lowenstein explains. But this coverage isn’t necessarily comprehensive, and practices can also face risks that fall outside of practitioners’ individual policies.
Medical practices interact with patients, support practitioners and ancillary services, all of which can cause potential issues. Additionally, practice protocols, staff errors and system failures can create or contribute to poor patient outcomes, exposing practices to legal action or complaints. Some common areas where issues can arise include:
“These interactions aren’t necessarily covered by a practitioner’s individual professional indemnity insurance,” Lowenstein says. “So there are other varieties of insurance available to cover these gaps and help ensure that medical practices are able to continue operation without interruption.”
Medical malpractice insurance, for example, covers the risk assumed of patient injury arising from care and treatment in a medical setting. Medical malpractice includes the liability of the entity and its healthcare and medical staff, providing a safeguard beyond the practitioner themselves and leaving less room for potential exposures.
The opportunity for brokers
Given the magnitude of these risks, the healthcare sector is highly reliant on advice from brokers. Lowenstein is keenly aware that brokers have expectations of their own.
“Brokers are trying to achieve the best outcome for their clients, so they want competitive pricing, innovative product coverage and customisation, and access to knowledgeable underwriters,” he says. “Insurers need to be making sure they’re bringing their best to the table if they’re wanting to operate in this field, and we take a lot of steps to ensure that we can help brokers however they need.”
For brokers who are willing to engage with the complex challenges facing the industry, there are numerous opportunities, including among existing clients.
“AHPRA [the Australian Health Practitioner Regulation Agency], for example, has a register of practitioners containing the name, qualifications and registration details of any health practitioner that falls under the 15 national boards,” Lowenstein says. “So a broker looking after a GP clinic may find numerous leads through the individual medical practitioners working at the clinic.”
Lowenstein also recommends several other key spaces brokers can tap to reach out to potential clients, including social media, industry conferences, annual scientifi c meetings [ASMs] and practice visits.
“We regularly engage with our broker network to provide specific training about the market and product specifics to arm them with the tools they need to win business,” he says. “It’s an industry where marketing emails and fl iers do little for engagement, but engaging warm leads through an introduction by a peer or dropping into a practice to provide insights has been incredibly successful.”
Risks to watch
Healthcare is a fast-moving industry, and advances in treatments and legislative reform both have a constant and ongoing impact on insurance in the field. Some of the common challenges centre around life sciences and clinical trials, including ageing populations; increasing life expectancy; a rise in diseases; and fragmented, complex regulatory regimes across borders.
“New treatments, major scientific breakthroughs, technology and AI play increasingly important roles as companies evolve,” Lowenstein adds. “They’re changing how research is conducted and how companies innovate, manufacture, and distribute products and better meet consumer expectations.”
Currently in Australia, increased legislation and scrutiny for cosmetic services are presenting a number of challenges for practitioners. AHPRA and the Therapeutic Goods Administration [TGA] are taking a closer look at businesses that offer these services to ensure that they aren’t breaching TGA’s advertising code and AHPRA guidelines.
“We’re seeing other shifts, too,” Lowenstein says. “In some states and territories, all cosmetic surgery – such as liposuction – must be conducted at certified licensed premises. There are also proposed changes requiring doctors to be consulted and on-site when cosmetic procedures like injectables and fillers are performed. This may have a significant impact on beauty clinics.”
Other changes can have immediate and serious consequences. “For example, in September this year, the TGA suspended eight models of breast implants,” Lowenstein says. “These developments may have wide ranging consequences for practitioners – if they’re using unapproved medical devices, they can fi nd themselves liable.”
Lowenstein is quick to note that these considerations are important for protecting the integrity of the industry, but they also present an opportunity for brokers to discuss these and other issues with clients.
“It’s an opportunity for them to ensure they’re aware of their obligations – and also that they have the right insurance in place in the event of a patient complaint,” he says.
It’s not solely the cosmetic side of the industry that’s facing change. July 2019 saw the introduction of the Shared Debt Recovery Scheme, which aims to introduce a fairer approach to organisational billing practices.
“The scheme enables the Health Department to hold organisations responsible for a portion of debts incurred from incorrect Medicare claims,” Lowenstein says. “A lot of practices will be looking to ensure that they’ve been compliant over the years, and concerns have been raised around whether there is insurance available to cover their portion of the debt refund.”
On that point, Lowenstein notes that while legal costs may be covered, the mandatory debt refund (which could run into the hundreds of thousands) is currently uninsurable in the market, something his firm is looking to address.
Nonetheless, he stresses that changes like this shouldn’t be cause for panic – rather, it’s an opportunity for organisations to get themselves up to speed and ensure that previous issues aren’t carried into the future. Brokers can add a steering hand to the process.
“If you’re committed to learning a lot about the field, it’s an opportunity to really enhance the overall industry,” Lowenstein says. “Helping organisations get the fundamentals in place means they can pivot to future changes with much greater ease – and with the support of a good insurer, that’s where you can step in.”
