The Amazing Race

1. The Amazing Race Emerging Trends in Hospital Liability Chicago, Illinois ~ March 11 & 12, 2008

2. Healthcare Facilities: The Amazing Race?? • MODERATOR: Pamela K. Haughawout, CPCU, ARM, RPLU, Senior Vice President, Hilb Rogal & Hobbs • Paul F. McKeon, MBA, Senior Vice President, Transatlantic Reinsurance Company • Donna Modestine, Esq., Shareholder, Marshall Dennehey, Warner, Coleman & Goggin • Joe P. Sullivan, Senior Vice President, Healthcare Group Executive, Zurich

3. 4 Trends to Discuss • The Condition of the Insurance Market • Batch Issues • Never Events • Privacy Liability

4. Market Conditions Riding the Roller Coaster Again!

5. We all know the market is soft . . . But Why? • Declining Frequency of Claims • Tort Reform • Claims Severity

6. Loss Ratios for Medical Malpractice IndustrySource: Bests Aggregates & Averages – Property/Casualty

7. National Practitioners Data BaseNationwide Frequency AnalysisSource: National Practitioners Data Bank public use file, June 30, 2006

8. The Soft MarketMore than Just Price • Coverage Enhancements • Multi Year Deals • Coverage for Punitive Damages • Bariatrics – What Happened to this Issue? • Risk Management Credits – Promotional Hype or Legitimate Underwriting Criterion?

9. Batch Issues

10. Batch/ Systemic Events • Real or Imaginary? • Brokers Pushing or UWs Offering? • Excess layers are softest part of market

11. Systemic Events • Over 30 cases in our inventory with some consistency: • Surgical Techniques • Sterilization (Hepatitis, Others) • Credentialing • Products • Laboratory techniques …various others

12. Underwriting Approaches • Price, Attachment, Wording, or Luck? • Wording - • Policy period(s) • Sole Judge • Split Retentions • …various others

13. Never Events

14. What are Never Events • Payment reform enacted by Medicare • No reimbursement for a condition that never should have occurred during an in-patient stay

15. 8 Conditions • object left in surgery • air embolism • blood incompatibility • catheter associated UTI's • decubitus ulcers • vascular cath associated infections • surgical site infections • falls and trauma

16. ventilator associated pneumonia staph. aureus septicemia deep vein thrombosis / pulmonary embolism 3 More Conditions

17. 3 criteria for deciding what a Never Event Is • High cost/high volume or both • Assignment of a case to a diagnostic related group with higher payment because of secondary diagnosis • Preventable through evidenced based guidelines

18. Will "never events" payment rules impact Medical Malpractice Litigation Some Issues to Think About- Whether CMS regulatory violations constitute negligence per se Whether payments to a hospital under 5001(c) would be admissible evidence to support allegations of negligence Do we still need medical experts now that CMS has specified preventable error and blessed specific preventable guideline? Private Insurers are following suit NEVER EVENTS – NEW STANDARD OF CARE???

19. DOES THIS CONSTITUTE STRICT LIABILITY

20. In the news… Staph infection threatens lives Drug-resistant skin infections spreading fast Over half of ER cases caused by potentially fatal superbug, researchers say CDC seeks to calm schools over ‘superbug’ Best way to fight the bacteria is simply to wash your hands, officials say

21. Emergence of MRSA • First recognized in 1968 • Early 1990’s accounted for 20-25% of Staph Aureus isolates • 1999 - accounted for > 50% of Staph Aureus isolates • 2003 – accounted for 59.5% of Staph Aureus isolates

22. Clostridium Difficile Most common cause of hospital acquired bacterial diarrhea Often triggered by antibiotics Common in hospitals and long-term care facilities

23. Yearly Clostridium difficile-related mortality rates per million population, United States, 1999–2004. Source: Centers for Disease Control and Prevention Emerging Infectious Diseases [online] 2007 Sep [cited 2007 Aug 17]. Available from Internet: http://www.cdc.gov/eid/content/13/9/1417.htm

24. Norovirus “Cruise ship” virus - New strains have caused increased hospital and LTC outbreaks ED visits for acute gastroenteritis increasing (especially since October 2006) Probably under-reported since testing is inadequate

25. Norovirus Estimated total cost for a 3 month Norovirus outbreak clean-up expenses $96,000 staff sick leave and overtime $89,000 lost revenue from closing units and echo lab $418,000. Total: $650,000

26. Patient gowns The floor Bed linens Blood pressure cuffs Over-the-bed tables Stethoscopes Door handles TV remote control Patient bed controls Sources of Superbugs #1 Healthcare Workers

27. Great Britain • No long-sleeve white coats • No ties • No fake nails • No jewelry • No watches

28. Mandatory public reportingPremier. Reducing the cost and impact of infectious disease. June 2007

29. Privacy Liability

30. HIPAA – HOW FAR HAVE WE COME • HIPAA AND HOW IT IS BEING ENFORCED, IF AT ALL • Office of Civil Rights • 24,000 HIPAA privacy complaints • First HIPAA violation trial – Fernando Ferrer, Jr. • HIPAA COMPLIANCE IS NOT SIMPLY A FEDERAL REGULATORY MATTER • State Courts Look to HIPAA as Standard • Acosta v. Byrum 638 S.E.2d. 246 (N.C. Ct. App. 2006) • Bagent v. Blessing Care Corporation, 244 Ill.2d 154 (2007) • HOW HOSPITAL'S ARE PROTECTING THEMSELVES • IS HIPAA HERE TO STAY? (HIPSA) Kennedy/Leahy Bill - S. 1814

31. Discussion Points • The issues surrounding interoperable electronic health records is the biggest privacy and security policy issue on the horizon • Is it possible to balance the desire for electronic medical records/personal health records with appropriate privacy and security issues identified by HIPAA? • The debate on EMRs/PHRs likely will drive a new evaluation of HIPAA • Will the drive of Health Information Exchanges in Hospitals and Health Systems open the door to increased HIPAA based private litigation and what hospitals can do to protect themselves?

32. Thanks for Inviting US ?????