e-Records Make Insurers Jittery

Hospitals and medical practices that implement electronic medical records could end up paying more for liability insurance, at least in the short term, an insurance industry research group has concluded.

Underwriters are concerned that errors will initially increase as EMRs are implemented, driving up claims and the cost of defending against them, according to the executive summary of a new report by Hartford, Conn.-based Conning Research and Consulting.

More than 90 percent of hospitals and medical practices have yet to implement EMRs that meet federal meaningful use standards, according to the report, "Medical Professional Liability in a Changing Health Care Environment - The New Story Unfolds." Use of electronic records will increase, in all likelihood dramatically, as health care providers move to capture federal financial incentives for adopting the technology.

"In the short term, as systems are tested, errors with coding data input and software/interoperability failures may occur," the executive report said. "Insurers need to monitor these new systems as they are implemented, and can use the opportunity to add value to clients by assisting in testing systems." Conning noted that errors are likely to trend downward over the long term.

Claims also could increase as patients gain easier access to their electronic medical records, which include more data than paper files, the report said. Providers who don't follow treatment protocols embedded in EMRs face higher risks of being sued. Specialists will be particularly vulnerable, Conning said. In addition, the cost of defending against claims will likely increase as more lawyers use electronic legal discovery and metadata, according to the report.

"The delivery of health care is changing and this will change the way medical professional liability insurers view and manage risk, defend claims, manage data, price policies, choose markets, and expand," said Stephan Christiansen, director of research at Conning, in a news release. "While we see a deteriorating environment for medical professional liability, tools do exist for better-informed companies to drive future performance apart from industry results. No insurer is immune from market forces, yet the degree to which they can insulate themselves is likely greater than they believe."