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Modernizing Healthcare by Embracing Telemedicine

Telemedicine may be the healthcare delivery model of the future, but in exchange for convenience and efficiency, patients and providers could sacrifice quality of care.
By: | October 3, 2017 • 5 min read

Today, we can request a ride, order groceries, and stream a television show with just a simple click. And increasingly, we can also access healthcare. According to the American Telemedicine Association, more than 20 million Americans will have access to a remote healthcare service by the end of 2017.

Whether receiving or administering care, telemedicine can have advantages. For patients, telemedicine offers convenience and speed, and for healthcare providers, it allows medical professionals to see more patients.

With these advantages come new challenges, such as technical requirements, compliance, and licensing of personnel. By taking a holistic, cross-team approach to implementation and working closely with their insurance partners, healthcare providers can successfully embrace telemedicine and also protect patients, medical professionals, and their own operations from the potential downsides.

A New Model to Meet Patient Needs

A variety of factors drive the need for telemedicine. Many people live in areas where getting to a healthcare facility is challenging, or where there’s a shortage of physicians and specialists. And, those who benefit most is also growing: the number of elderly Americans has increased from 35 million to 49 million1 in the past 16 years. This group typically needs more care, but often has difficulty getting to a doctor’s office.

“Many senior care facilities are using videoconferencing to access telemedicine. Physicians see the senior citizens at the facility, diagnose ailments, and prescribe treatments remotely,” said Kristin McMahon, President, U.S. Liability and Regulatory Healthcare Products, IronHealth.

Cutting out the need for transportation means faster care for patients, which could also translate to fewer hospital readmissions.

“Faster diagnosis and treatment could translate into fewer professional liability claims. For example, you could more quickly address pressure sore ulcers or recommend appropriate fall precautions to minimize the risk of resident bodily injuries,” said Jeff Duncan, Chief Underwriting Officer, Healthcare Practice, Liberty Mutual Insurance.

Healthcare providers can also potentially see more patients in a day by addressing more minor ailments through videoconferencing or telephonic methods.

“Organizing the logistics of face-to-face consultations with multiple patients takes time,” Duncan said. “By addressing less serious cases using telemedicine, doctors have more time to analyze and treat complex cases.”

But significant clinical and technical risks go hand-in-hand with these benefits.

Risks to Telemedicine Providers

“Healthcare can’t be treated like any other consumer product; it’s much more complicated than requesting a ride to the airport,” Duncan said. In exchange for convenience and efficiency, patients and providers may sacrifice quality of care.

Without in-person interactions with patients, medical professionals may run the risk of misdiagnosis, which can cause physical harm to the patient and professional liability to the healthcare provider.

Traditional malpractice policies cover the medical professional for an error in judgment or treatment that fails to meet the standard of care. Technology introduces another layer of uncertainty.

“If the clinician fails to diagnose an abnormality on a CT scan, is it due to his or her professional error, or did the technology contribute to the oversight?” McMahon asked. “Perhaps the internet connection was weak or the image quality wasn’t high enough, which resulted in the clinician missing an area of shading that could suggest cancer, for example.”

There have not been many claims stemming from this type of technology failure, but McMahon and Duncan are keeping a close eye on this potential issue as telemedicine grows more prevalent.

Delivering healthcare online also increases cyber and privacy exposures that could land providers on the wrong side of HIPAA compliance. Electronic records shared with third-party telemedicine technology platforms may be at greater risk.

Licensure issues also arise when state lines can be so easily crossed in the cloud. Medical professionals must be properly licensed in the states where they provide care, but using telemedicine means that a patient’s location could be anywhere. Telemedicine regulations can vary by state in areas such as informed consent, standard of care, credentialing of providers, and remote prescription practices.

A Cross-Functional Approach to Mitigate Risk

Telemedicine may be the healthcare delivery model of the future, but providers should implement it strategically, with the help of a cross-disciplinary team.

“Billing and finance team members should be involved to determine how telemedicine-related reimbursements will work. Currently, 29 states and D.C. mandate reimbursement for some telemedicine services, but amounts vary,” Duncan said.

Clinical input is necessary to determine what staff will use it for which types of injury, and what patient population it might serve. The IT group should discuss the cyber and information privacy exposure, as well as the technical aspects of implementation. Legal and compliance teams can weigh in on contractual, jurisdictional, and licensure issues.

The full team needs to monitor the quality of care—is it the same or better than before?

“No one discipline has enough perspective to solve these challenges effectively in isolation. You need to engage cross-functional teams early, and then think about where telemedicine can be effective,” Duncan said.

Manage Liability Holistically

Insurance is the final piece of the puzzle.

Organizations should work with insurers and brokers to make sure current policies will meet their needs. Cyber and professional liability limits may need to be increased. Technology partners should also have the appropriate cyber and E&O coverage.

In particular, professional liability policies should respond to both the traditional exposure of a physician making a medical error, as well as exposures introduced by the telemedicine technology itself.

“If the technology malfunctions and that leads to a misdiagnosis or bodily injury, the healthcare provider can still be held liable on a negligent credentialing theory,” McMahon said.

One solution is to have the medical malpractice exposure and the technology E&O coverage from the same insurer, to avoid potential conflicts if there is a liability claim implicating both parties. Said McMahon, “We are looking very closely toward developing an integrated product to provide a comprehensive solution.”

Notes Duncan, “Telemedicine is here to stay, and we want to help protect our healthcare clients as they embrace it.”

To learn more, visit https://business.libertymutualgroup.com/business-insurance/industries/health-care-providers-insurance-coverage.

 1 United States Census Bureau. https://census.gov/newsroom/press-releases/2017/cb17-100.html

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.






Liberty Mutual Insurance offers a wide range of insurance products and services, including general liability, property, commercial automobile, excess casualty and workers compensation.

More from Risk & Insurance

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Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.