Dr. Richard E. Anderson is chairman and CEO of The Doctors Company, a physician-owned medical malpractice insurer in Napa, California, that was formed amid the med mal crisis in the mid-1970s. He has led the insurer since 2003, after serving on its board while he practiced as an oncologist for 25 years and served as a clinical professor of medicine at the University of California San Diego. Dr. Anderson recently spoke with Business Insurance Editor Gavin Souter about increased pressure on doctors, the rise in the severity of med mal losses and risk management steps that can be taken to reduce physician exposures. Edited excerpts follow.

Q: Health care workers were on the front lines during the pandemic. How did that affect your claims experience?

A: We had fewer claims in 2020 than we expected by about 20%. The reason for that is threefold: One, of course, is the heroic work done by physicians, clinicians and all frontline hospital and office medical workers; the second is that there were broad COVID immunities in the majority of states, so physicians were immunized against COVID-related claims; and third, the whole health care system was disrupted by COVID so most “routine” care was delayed, deferred or disrupted. 

Our experience at this point in 2021 is that our expected claims are pretty much back at the point that we would have expected to see them as the legal process has opened up. On the other hand, we have not yet experienced any surge in claims.

The other long-term issue for our members is burnout.

Q: How does burnout affect med mal coverage?

A: There are two aspects to it. The COVID-related aspect was working 24/7/365, literally risking your life at the height of the pandemic and often having to live away from home to avoid infecting the family. 

Before that, though, physicians have been challenged in the practice environment. Electronic health care records have added hours a day to the worktime of an average physician. Many physicians find that they can’t accommodate the clerical aspects of the EHRs in the office, so they come home, have dinner and then spend several hours online updating their records.

The amount of paperwork that physicians have been asked to do over the past 10 or 15 years is choking the practice of medicine. That’s compounded by the production-related environment of medicine, with requirements to see so many patients a day.

Doctors are being starved of time to do the things that we as patients want them to do. That leads to disappointed patients, can lead to adverse events, and those lead to malpractice suits.

Q: How is the increased use of telehealth affecting the sector?

A: Telehealth is here to stay. During the pandemic we went from 1% to 2% of clinical visits being telehealth to a peak of about 70%. My guess is that telehealth will stabilize at something like 20% to 30% of all clinical visits. At the moment, there are two issues: the absence of physical contact and a physical examination and determining how much of telehealth is necessary care or are we giving greater access to unnecessary care. Despite the dramatic increase in telehealth, emergency room visits have not gone down in the U.S.

If we look forward, we will be able to do physical examinations via telehealth. For example, you’ll be able to put an iPhone on your chest and transmit your heart sounds, which can then be analyzed digitally. 

Also, there’s a whole other aspect of telehealth in terms of remote consultations, such as having a neurologist consult in an emergency room when they are in another state.

As with all transitions, transition is fraught. We need better technology, better protocols, and we need the legal system to adapt to the new environment in which medicine is practiced. 

Q: What do your underwriters want to know about physicians practicing telehealth?

A: We’ve been insuring telehealth since the beginning, and overall there’s no extra charge and our risk experience with it has really been quite good. We have very few claims that pivot on telehealth.

On the other hand, there’s another risk of telehealth, which is the possibility of getting bad medicine through telehealth, if you have unqualified clinicians providing casual advice by phone to patients they don’t know and haven’t thoroughly examined. So, when we underwrite we try and make sure that there are appropriate protocols and experience, that the physicians are qualified to provide care at that level and understand the limitations of telehealth. 

Q: Like in many other areas, rates are going up in med mal, what’s driving that?

A: The single biggest factor is severity. We are not seeing more claims than we expected but the cost of claims is going up. Most medical professional liability carriers are paying more in claims costs and overhead than they are receiving in premium. Historically, we could make up some of that gap with investment income, but it’s very hard to do that with low interest rates.

The plaintiffs bar never takes a day off. They are always refining their arguments, they are always pleading for more and more damages, and they are very effective. And courts tend to expand the theories of liability over time, so that’s an issue.

The other reason why severity is going up is that we live in an era now where a $100,000 claim doesn’t sound like very much when we are used to talking in trillions or when billionaires have their own rocket ships. Monetary desensitization is real.

Q: What steps can health care providers take to improve their risk profiles?

A: One is to be present for patients, not being distracted or burned out. Focus on the problems that the patient is presenting with. Two is to think systematically. A really good integrated delivery system has checks and balances, so if you order a consultation or you order some lab work, there’s a system or flag that says you ordered these results and you haven’t gotten them, or pay attention because this one is abnormal. Those kinds of things are really important and in this environment where doctors are asked to see large numbers of patients in a day it’s easy for those kinds of things to fall through cracks.

It’s about taking a systematic look at what you are doing and a personal look at what you are doing and how you are feeling.