By: Bill Bower
Jan 07, 2025 — A number of challenges threaten the stability and efficacy of the healthcare industry. We'll take a look at the existing and emerging risks within the healthcare sector, offering insights into how organizations can navigate these challenges. From understanding the implications of cybersecurity threats to addressing workforce shortages and managing workers' compensation claims, this discussion aims to equip healthcare providers with the knowledge needed to safeguard their operations and ensure high standards of patient care.
Healthcare Workforce Shortages
The healthcare industry continues to experience shortages in various roles, including physicians, nurses, and other critical staff. This shortage impacts patient care quality and increases the burden on existing staff, potentially leading to burnout and errors.
The causes of these shortages include higher demand (potentially due to an aging population requiring more healthcare services), burnout and job stress of workers (which leads to employees leaving the industry), and financial constraints (both in the form of higher educational costs that some can't afford as well as lower compensation structures for healthcare workers in some regions and specialties).
Regardless of the circumstances that are driving workforce shortages, the impact of a decreased provider-to-patient ratio can result in additional strain on existing resources and can ultimately lead to workers' compensation claims.
Workers' compensation claims in the healthcare sector are often driven by unique risks and challenges associated with the profession.
The top workers' compensation claims for healthcare workers typically include:
- Musculoskeletal injuries: These injuries are often caused by lifting or moving patients, repetitive motions, and awkward postures. Common injuries include strains, sprains, and back injuries.
- Slips, trips and falls: Healthcare environments can be fast paced and cluttered, leading to a higher risk of slipping on wet floors, tripping over equipment, or falling.
- Needlestick and sharps injuries: Healthcare workers frequently handle needles and other sharp instruments, which can lead to puncture wounds and potential exposure to bloodborne pathogens.
- Violence and assault: Healthcare workers, particularly those in emergency departments or psychiatric units, may face violence from patients or visitors, leading to physical injuries and psychological trauma.
- Exposure to infectious diseases: Healthcare workers are at risk of contracting infectious diseases due to their close contact with patients. This risk includes exposure to illnesses such as influenza, tuberculosis, and more recently, COVID-19.
- Chemical and drug exposure: Handling medications, cleaning agents, and other chemicals can lead to skin conditions, respiratory issues, or other health problems.
- Mental health issues: The high-stress environment of healthcare can lead to mental health issues such as anxiety, depression, and burnout, which may also be covered under workers' compensation.
No matter the type of injury, the handling of claims processes is of utmost importance as it directly affects the health and timely recovery of the injured person as well as the total costs incurred by an employer. A comprehensive approach that balances cost containment with claimant advocacy helps ensure compassionate communication and quality care. Learn more about Gallagher Bassett's workers' compensation claims handling.
Cybersecurity Threats and Liability
The healthcare industry faces significant cybersecurity threats, including data breaches, ransomware attacks, phishing scams, malware infections, fraudulent fund transfers, insider threats, and account takeovers. These threats can compromise sensitive patient information and disrupt critical medical operations. Additionally, due to the highly sensitive and regulated nature of personal health information, penalties for data breaches in the healthcare sector can be severe, with the Office for Civil Rights increasing its investigative efforts.
As reliance on consolidated technology grows, covered entities are increasingly vulnerable to cyber threats through technology supply chain attacks. In early 2024, one of the most severe supply chain attacks in recent history occurred. Change Healthcare, a unit of Optum and a subsidiary of UnitedHealth Group, disclosed that it was targeted by the BlackCat/ALPHV ransomware gang and paid tens of millions of dollars in extortion fees. This attack has had a devastating impact on the healthcare industry and the hundreds of millions of Americans who depend on services provided by affected entities. Physicians and hospitals faced challenges in billing, managing, and issuing prescriptions and healthcare procedures. Pharmacies struggled to fill prescriptions properly, and many providers and individuals experienced financial hardships. The downstream effects and economic toll of this attack are still being assessed, with regulatory investigations and class action lawsuits continuing to grow.
Learn more: Existing and Emerging Cyber Risks in the Healthcare Sector
Legal and Liability Risks
The risk of litigation due to malpractice, negligence, or other legal issues remains high. Healthcare providers must navigate complex legal environments and ensure they have adequate insurance, legal protections, and skilled representation. An experienced partner can help ensure that a proactive approach is taken to managing litigation, claims, and risk management processes. Learn more about GB's specialty solutions: GB Healthcare: We Expect the Unexpected
Medical malpractice. The landscape of medical malpractice is evolving, with increasing scrutiny on claims related to misdiagnoses, surgical errors, and other clinical issues. With catastrophic verdicts on the rise, it's important to understand how to navigate litigation and help avoid inflated damages.
Read more: The Need for Defensive Anchoring in Response to Rising Jury Damages
Patient Safety and Quality of Care
Ensuring high standards of patient safety and care quality is a continuous challenge. Risks include medical errors, adverse drug reactions, and complications from procedures, all of which can impact patient outcomes and a hospital's reputation.
Regulatory Compliance
Changes in healthcare regulations and policies, such as updates to Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act (ACA), and other federal or state regulations, pose risks related to compliance. Failure to adhere to these regulations can result in fines and legal issues.
Financial Pressure
Rising costs of healthcare delivery, coupled with fluctuating reimbursement rates from insurance providers, put financial strain on healthcare organizations. These financial pressures can affect the ability to invest in new technologies, facilities, and staff.
Integration of New Technologies
While new technologies offer significant benefits, they also present risks. Issues related to the integration of electronic health records, interoperability between systems, and the adoption of artificial intelligence (AI) and machine learning must be carefully managed to avoid disruptions and inaccuracies. The use of AI, machine learning, and other advanced technologies in healthcare introduces new risks that insurers must understand and address. This includes evaluating the accuracy of AI-driven diagnostics and the potential for technology failures.
Read more: Healthcare and AI: A Need for a Cautious Approach
Telemedicine and Remote Care Risks
As telemedicine and remote care become more prevalent, insurance companies face new risks related to these services. Issues include ensuring coverage for virtual consultations and understanding the liability implications for remote diagnoses and treatments.
Read more: The Future of Telehealth: A Passing Phase or Here to Stay?
Supply Chain Disruption
The healthcare sector relies on a complex supply chain for medical supplies, pharmaceuticals, and equipment. Disruptions in this supply chain, whether due to global events, natural disasters, or other factors, can impact patient care.
Cost Containment Strategies
There's a growing focus on managing and reducing healthcare costs, which can impact commercial insurance policies. Strategies such as utilization management, preventive care, and wellness programs are being integrated into coverage plans.
Learn more about Gallagher Bassett's claims handling and risk management solutions for the healthcare industry.
Author
Bill Bower
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