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Aspen Opinion

U.S. Healthcare: New Frontiers

October 31, 2017

Faith Logsdon

Senior Vice President, Medical Professional Liability

Tel: +1 312 239 1949

Faith Logsdon believes that changes in U.S. healthcare provision offer significant opportunities. The rapidly shifting landscape has been fueled by legislative change, cost pressures and increasing consumerism. New frontiers in patient care are being reached and insurance policies that combine the appropriate mix of professional liability, general liability and cyber (liability) have become increasingly relevant.

The Affordable Care Act (ACA) was enacted in 2010 with many of the measures implemented in 2013 against a background of declining supply of primary care physicians coupled with an increasing demand for services that they provide. The Act proved to be a catalyst in the changing medical landscape and three key trends have emerged regarding healthcare delivery in the United States.


In 2013, more than 20 states passed regulation to allow non-physicians to open independent offices and disburse medical care and prescriptions. State regulation has enabled professionals, including certified nurse practitioners and physician assistants, to open independent practices to provide health services including monitoring of diabetes, blood pressure, and cholesterol, in addition to administering testing, bloodwork and vaccines. In these cases, the medical professionals are no longer required to collaborate with a licensed medical doctor to administer defined types of medical care.

Nurse Practitioners (NP), specifically, are gaining recognition and the ability to practice independently by setting up their own practices. Currently, 22 states and the District of Columbia have approved full practice status for NPs allowing them to assess, diagnose, interpret diagnostic tests and prescribe medications independently.[1] Several states have also empowered NPs to sign death certificates and formal health records and prescribe certain medications.

The dismantling of practice barriers has received encouragement from other Government departments. For example, in 2016, The Department of Veterans Affairs (VA) announced the amendment of provider regulations with a relaxation of full practice authority limitations for VA advanced practice registered nurses.


Another trend has been a rapid increase in outpatient medical services formerly consigned to in-patient/hospital settings including urgent care facilities that offer quick, more cost-effective, local medical services for urgent care needs. This growth has been encouraged by the rollout of ACA and advances in preventative treatment, resulting in shorter recovery times and reduced complications in addition to advanced technology and cost containment. The rising cost of inpatient care has also led to the expansion of outpatient care. Complex procedures and surgeries are now possible in outpatient facilities due to new medical technologies and anesthesia and pain control techniques that reduce complications and allow patients to return home more quickly. For many, outpatient surgery has proven to be safe and effective, achieving similar or better outcomes than inpatient procedures while allowing patients to spend less time in a medical facility and recover more quickly.

It is estimated that about two-thirds of all surgeries are now performed on an outpatient basis.[2] Healthcare providers have been setting up free-standing emergency departments as well as partnering with supermarkets and drugstores to offer urgent care.

Telemedicine: Increasing Care and Reducing Cost

In essence, telemedicine is the use of telecommunication and information technology to provide clinical healthcare from a distance. Telemedicine was originally developed in the U.S. as a way to address care shortages, especially in remote rural areas. It is now considered a broadly acceptable way to deliver more accessible and convenient healthcare. The cost of these technologies has dropped significantly, while access to quality, reliable high-speed internet access has expanded, encouraging more doctors to consider using telemedicine in clinical practice. An aging population in the developed world has also increased demand and, by 2021, it is estimated that the global telemedicine market will total more than US$66 billion, growing at a rate of 18.8% per annum during the forecast period (2017-2022).[3]

Telemedicine has been utilized for some time in the field of radiology, but it is spreading to other specialties such as psychiatry, dermatology, cardiology and pain management to name a few. Home-based monitoring devices for blood pressure, glucose levels and medication dosages have become common tools in treatment. While robotic surgery is still relatively uncommon, pre-operative instruction and post-operative monitoring and follow-up has become a useful tool for many surgeons to ensure patient recovery and reduction in re-admission statistics. It should be noted that on-call physicians can service a patient in just a few minutes, avoiding the costs associated with doctor office appointments, urgent care trips or non-emergency visits to hospital emergency departments. Patients can connect virtually to a specialist, or a number of specialists simultaneously, located at a great distance. Patient monitoring as well as prescription and administration of drugs can also be performed remotely. Expenses are accordingly reduced, infection risk is limited, and convenience and comfort to the patient is enhanced.

Recognizing that formalized training in telemedicine is not widely offered to physicians-in-training, the American Medical Association (AMA) has adopted a new policy to ensure medical students learn how to use telemedicine in clinical practice. Furthermore, it supported the Creating Opportunities Now for Necessary and Effective Care (CONNECT) for the Healthcare Act to expand the use of telemedicine in achieving quality patient care.

New Frontiers

The new frontiers of outpatient care, created by the growth of telemedicine and non-physicians independent practices, bring new challenges to the insurer. Policies that combine the appropriate mix of professional liability, general liability and privacy and network security (cyber liability) have become increasingly relevant.

A multi-disciplinary approach will ensure the client gets the relevant comprehensive coverage needed for the exposure. It is imperative that the underwriter is aware of existing and changing legislation that varies from state to state as this sets the rules of engagement. The underwriter check-list must include assurance of an on-site Health Insurance Portability and Accountability Act (HIPAA) Compliance Officer as HIPAA requires healthcare organizations to implement secure electronic access to health data and to remain compliant with privacy regulations. Particular consideration needs to be given to evaluating the size of the account in terms of not just number of lives/records but also patient load to ensure that the compliance systems requirements related to exposures can be met.

Compliance considerations should include legal compliance of the practice with a check on reciprocity agreements between states where the practice transacts business as well as practice restrictions applicable to non-physician healthcare professionals. Informed consent is an essential component to any medical practice. Not only is it a recommended best practice, it is actually a requirement in many states. Some states also have requirements specific to telemedicine either in specific statutes, regulations or state Medicaid policies. It is important that the informed consent includes a description of the service that will be performed and the technology employed together with a provision for alternative care in the case of any technological malfunction. These protocols should be checked and documented in the patient’s record. In addition, the systems review should include Malware defenses, intrusion prevention systems, data back-up protocols, encryption of personal information plus payment and collection.

While outpatient care may have reduced the risk of superbugs and overuse of antibiotics, it has introduced a correspondingly larger exposure to med-tech. (Re)insurers must continue to identify trends and developing regulations in order to evaluate these exposures responsibly and deliver a seamless coverage product to the market.



[1] Alaska, Arizona, Colorado, Connecticut, Hawaii, Idaho, Iowa, Maine, Maryland, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oregon, Rhode Island, South Dakota, Vermont, Washington, Wyoming https://www.aanp.org/legislation-regulation/statelegislation/ state-practice-environment/66-legislation-regulation/state-practice-environment/1380-state-practice-by-type#north-dakota (Accessed 3 October 2017)

[2] The Changing Geography of Outpatient Procedures, Guy David PHD & Mark D. Neuman MD, Issue Brief March 2011v.12/5

[3] https://www.mordorintelligence.com/industry-reports/global-telemedicine-market-industry (Accessed:3 October 2017)

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The above article/opinion reflects the opinion of the author and does not necessarily represent Aspen's views. The article reflects the opinion of the author at the time it was written taking into account market, regulatory and other conditions at the time of writing which may change over time. Aspen does not undertake a duty to update these articles.