Dueling Actuaries
Tim Mosler

Dueling Actuaries

Impact of Health Care Reform on Medical Professional Liability Insurance

Tim Mosler September 12, 2014 Posted in: Blog Posts, Health Care / MPL, Insurance / Insurers

On August 20, 2014, Pinnacle’s monthly APEX webinar focused on health care reform and its impact on medical professional liability insurance. Art Randolph and Tim Mosler, both senior consulting actuaries with Pinnacle, squared off in a series of six debates. Each debate centered on a key health care reform issue and its impact. Elissa Sirovatka provided the background for each issue and moderated the debate.

Access to Health Care Coverage

The first issue debated was the impact of greater access to health care coverage. The 2011 U.S. Census report showed that 15.7 percent of the population did not have health insurance. The dominant goal of the Affordable Care Act was to significantly reduce this percentage. Provisions of the act systematically eliminated the reasons for individuals not having health insurance. The more notable provisions included federal subsidies for the poor, prohibition of pre-existing condition exclusions, and the individual mandate to purchase health insurance.

Will greater access to health care coverage lead to an increase or decrease for MPL costs?

The Optimist’s View

The first view presented was that there would be a reduction. The crux of the argument was that those previously uninsured would now have better health and fewer bad medical outcomes. They would get their illnesses and injuries treated at the onset rather than after the condition had intensified to an emergency.

Additionally, the contact with health care providers could begin to reshape the behavior of the newly insured to include healthy habits and to reduce unhealthy ones. While it’s unrealistic to expect large behavioral changes quickly, any improvement here is better than the status quo.

Finally, those with the early stages of a disease can have it detected and treated. Without insurance, the disease may not have been detected until it reached a critical life-threatening stage.

Because there are going to be fewer bad outcomes that lead to MPL claims, the number of MPL claims will be reduced.

The Pessimist’s View

The optimist argument was followed by a rebuttal argument consisting of the reasons that there would be an increase in MPL costs. Individuals don’t change their behavior over time and free health care could actually lead them to take less responsibility.

Further, conditions exist that will actually make it more difficult for individuals to get appointments with their doctors. Because there are more people with health insurance, it will be harder to get access to health care. And, because the deductibles on some health plans are higher now than before health care reform, many insured patients will put off their doctor’s appointments due to affordability.

These changes could actually result in less medical attention and an increase in the number of bad outcomes leading to an increase in MPL claims.

The Audience Votes

The audience was asked to vote on how they saw increased access to health insurance affecting MPL costs. 81 participants responded and the majority believed that MPL costs would increase as a result:

  • Very likely to increase: 13/81
  • Somewhat likely to increase: 42/81
  • Equally like to increase or decrease: 18/81
  • Somewhat likely to decrease: 8/81
  • Very likely to decrease: 0/81

How would you have voted? To share your opinion, email Tim Mosler at tmosler@pinnacleactuaries.com.

To learn more about Tim, visit his People page.  

Coming Up:

Second in the series:
How will greater hospital and ACO employment of physicians affect MPL costs?

Tags: ACA, MPL, APEX webinar
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