While macroeconomic conditions reduced consumer health care utilization and state-level tort reforms have held earned rates and direct written premium pricing for medical professional liability coverage at year-over-year decreases between 0% and 5%, those trends could be on the verge of reversing themselves.
That's according to a presentation by managers with New York-based PricewaterhouseCoopers at the American Society for Healthcare Risk Management's 2012 conference in National Harbor, Md.
For now, the medical professional liability market continues to outperform the broader U.S. property/casualty industry composite on combined ratios, according to PwC's presentation. That is partially due to the rising number of physicians closing their private practices for positions with hospitals, whose tendency to fold newly hired and acquired providers into their self-funded medical professional liability insurance programs has reduced loss experiences for commercial malpractice insurers, said David Kaye, a Philadelphia-based assurance manager at PwC.
However, ongoing provider consolidation, along with projected increases in health care utilization, challenges to state-level malpractice tort reforms and changes to the health care industry at large resulting from the Patient Protection and Affordable Care Act probably will change the medical professional liability marketplace permanently in the next one to three years, Kaye said.