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Telehealth Continues to Evolve and Shape the Healthcare Insurance Industry

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The practice of telemedicine—healing at a distance—dates back over a century and has come a long way since. In 2023, the telehealth industry market value was estimated at $194 billion and is projected to rise to nearly $870 billion by 2030, according to the February 2021 Telehealth Market Research Report by Market Research Future.

It comes as no surprise that healthcare organizations and medical professionals recognize the operational efficiencies and cost savings associated with telehealth services and are therefore investing heavily in associated technologies to facilitate care—including Artificial Intelligence (AI).


Key Takeaways:
  • Telehealth is an intertwining of healthcare and technology that will continue to evolve and shape the industry.
  • Adoption rates continue to rise with 77% of primary care physicians believing they can utilize telehealth to provide better medical care.
  • Legal ramifications of telehealth failures and associated risks still must be sorted out by carriers.
  • Telehealth increases access to healthcare but may not be an efficient method of delivery for all specialties.
  • AI adoption within the sector is coming yet concerns remain about the security of patient data.

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Benefits across the healthcare spectrum

Access and convenience are key benefits of telehealth for both patients and providers. Well visits, the diagnosing of recommended therapies, and the management of chronic conditions are among the many examples of topics commonly discussed between a provider and patient during such a visit.

On the physician side, the efficiencies of telehealth can help reduce burnout and alleviate some of the administrative burden on healthcare professionals, providing a better work environment for clinical staff and possible reduction of errors.

As a result, around 77 percent of primary care physicians believe they can provide better medical care with telemedicine.

Both telehealth and AI continue to alter the state of the healthcare industry and corresponding insurance.

With AI, applications are widely available to help patients adhere to healthy lifestyles including the use of wearable devices that constantly monitor vital signs. AI can be used to interpret the data captured and correlate it to clinical problems.

In addition, current and future healthcare providers can also receive training from augmented reality sources, with more to come in the coming months and years.

Exposures can be an issue

While telehealth has many advantages, it can lead to errors that open up the insured to significant liabilities. Technology system failures as part of the telehealth delivery system and business interruptions and cyber events can all cause problems that have adverse health and monetary impacts.

For example, any of the issues mentioned above could lead to inaccurate diagnoses or some type of bodily injury. Industry statistics have shown that 25 percent of telehealth malpractice claims involve a misdiagnosis of cancer, while around 20 percent of such malpractice claims involve either a misdiagnosis of stroke or infection.

In addition, telehealth patients may fail to develop a relationship with one or more providers they trust, which can lead to such issues as failing to take medications or ignoring important clinical advice.

The AI influence

AI is influencing just about every industry, and healthcare is no exception. “Big tech” firms like Amazon, Google, Microsoft, and Oracle are taking notice as all are creating products that plan to utilize that technology. While investments in AI continue, the healthcare and telehealth industries will have to face certain challenges, including:

  • A wide range of end-user comprehension – the technology may be difficult for some patients to understand, and therefore use effectively.
  • Bias in AI models – as with most technology, any biases that impact the healthcare delivery process will likely get sorted out, but short-term issues are likely.
  • AI hallucinations – this refers to the fact that the output from the AI side may not be based on reality, resulting in harmful inaccuracies.
  • The concern over data collection – it is unclear if HIPAA guidelines or network security will be universally followed with all AI solutions. The processing of AI data will continue to evolve.
  • The impact of governmental and industry regulations – Europe has already created more stringent ChatGPT regulations compared to the U.S. These types of regulations will have a significant impact on the ability of AI to be used in the healthcare and telemedicine delivery system.
Healthcare is faced with consistent hacking threats

Ransomware and cyberattacks pose a constant threat to healthcare organizations. The U.S. Department of Health and Human Services identified 630 relevant ransomware attacks in the healthcare industry in 2023 alone. Two recent attacks in particular are expected to have significant liabilities.

Lurie Children’s Hospital in Chicago began to reactivate its MyChart system for patient families in mid-March, more than one month after a ransomware attack prevented employees from accessing patient records. The bad actors that took credit for the attack claim they sold patient data to a third party. It’s unclear what the exposure will be, with bodily injury fallout likely.

The U.S. Department of Health and Human Services launched an investigation into UnitedHealth Group in mid-March following the cyberattack on its Change Healthcare unit that has disrupted crucial operations in pharmacies and hospitals across the U.S. In late February, Change Healthcare indicated that a ransomware group was behind the attack, with unconfirmed reports indicating that the company paid a $22 million ransom to bad actors. Some estimations suggest that this attack may be costing hospitals around the U.S. as much as $2 billion per week.

With the growth in telehealth, all healthcare systems must be properly ensured for Cyber and technology, along with their standard policies in General and Professional Liability. Telehealth also increases the need for coverage for Errors & Omissions, which may be tied to a technology layer.

Tips for brokers and agents

The goal of any broker and agent is to secure the full amount of insurance coverage a healthcare client needs to weather any liability they may face. Most carriers have developed a checklist specific to the healthcare and telehealth industry. Among the insured specifics that need to be identified are:

  • Scope of healthcare services provided (i.e., family practitioner, pharmacy services, etc.)
  • Type of telemedicine needed (i.e., patient visits, diagnoses)
  • Identification of the party providing the services (individual practice, hospital, specialty clinic)
  • Types of platforms involved (defining the technology that is used in the telehealth process)
  • Identification of the end customers (geographic and demographic locations and overall patient profiles)

While healthcare and telehealth trends will evolve, open and complete submissions remain the best way to position your client for full coverage.

Contributors: Karl Olson, Vice President, Professional & Management Liability Practice Leader, Burns & Wilcox Brokerage; Evan Miller, Broker, Professional Liability, Burns & Wilcox; Laura McCormick, Association Vice President, Regional Practice Group Leader, Professional, Burns & Wilcox.

 

This commentary is intended to provide a general overview of the issues contained herein and is not intended, nor should it be construed, to provide legal or regulatory advice or guidance. If you have questions or issues of a specific nature, you should consult with your own risk, legal, and compliance teams.

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