Balancing innovation and risk in healthcare insurance
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As artificial intelligence revolutionises medical diagnostics and patient care, insurers are grappling with new challenges – but Tego Insurance is successfully navigating this evolving landscape
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IMAGINE AN operating theatre in which artificial intelligence doesn’t just assist but actively participates in the surgical process. That future is rapidly approaching.
“An example of this being explored is in operating theatres which will have AI capability to read and understand prior medical reports of the patient and analyse medical imaging, watch surgical procedures, listen to the conversation in the operating room and interact with the medical team,” says Eric Lowenstein, chief executive at specialist medical malpractice insurer Tego Insurance.
“We’re living in the era of AI in healthcare, where data and algorithms outstrip human capabilities and enable new possibilities for improving health and wellbeing,” he says.
Lowenstein is at the forefront of tackling the challenges and risks that this digital evolution brings and is keenly aware that as AI becomes more deeply integrated into healthcare systems, insurers face a new set of challenges.
Tego is a specialist underwriter offering bespoke malpractice insurance solutions tailored to the healthcare sector’s unique needs. Renowned for exceptional service and proactive support, Tego empowers medical professionals and healthcare organisations to operate with confidence. With a focus on innovation and adaptability, Tego addresses emerging risks by providing comprehensive cover for private hospitals, specialist suites, medical practices, and residential aged care and complex care providers. The product suite includes medical indemnity insurance for doctors, and malpractice and public liability insurance for healthcare entities. For more information, visit tego.com.au.
Find out more
Key elements of Tego’s approach to underwriting
Tego’s healthcare underwriters bring deep industry knowledge, crafting policies that address the unique challenges faced by healthcare professionals and organisations. Underwriting decisions are informed by historical claims data, industry trends and emerging risks.
“We’re living in the era of AI in healthcare, where data and algorithms outstrip human capabilities and enable new possibilities for improving health and wellbeing”
Eric Lowenstein,
Tego Insurance
“At Tego, we’re keeping a close eye on the ongoing developments in this sector by engaging with industry experts and ensuring we remain nimble so we can evolve our policies to include coverage for AI-related errors – and ensuring that liability is clearly defined between human practitioners and technology providers,” Lowenstein says.
While AI presents new challenges, it’s just one piece of a larger puzzle. The healthcare sector is evolving rapidly on multiple fronts, each bringing its own set of risks and opportunities.
Telemedicine, for instance, has seen explosive growth in recent years. “The rise of telemedicine and virtual care has significantly altered the healthcare landscape, introducing new risks that require careful management,” Lowenstein explains. “These include issues related to patient confidentiality, data security and the challenge of providing care without physical examinations.”
To manage these emerging risks, Tego has adapted its approach. “Tego has adapted its policies and underwriting approach to address these emerging risks by offering coverage that includes protection against data breaches; telehealth consultations; and potential misdiagnoses due to limited patient interaction,” Lowenstein states.
Similarly, emerging treatments like medicinal cannabis prescriptions are reshaping the medical landscape. David Leach, general manager for underwriting at Tego, says, “Emerging treatments, including the use of medicinal cannabis and other developmental drugs, introduce uncertainties and risks due to the evolving regulatory landscape and varying clinical outcomes.”
In response to these developments, Tego is taking proactive measures. “Tego is actively monitoring these developments and adapting our policies to cover potential liabilities associated with these treatments,” Leach says. “Our approach includes providing clear guidelines to practitioners, ensuring they are aware of the legal implications and offering coverage that encompasses the unique risks of these emerging therapies.”
In this rapidly changing environment, Tego has positioned itself as more than just an insurer. The company has adopted a proactive stance, working closely with healthcare providers to navigate these new challenges.
“Tego plays a pivotal role in risk management by providing our clients with comprehensive support and resources aimed at minimising potential liabilities,” Lowenstein says. This support includes proactive risk assessments, access to medico-legal advice, and ongoing education and training opportunities.
Tego has recently brought its claims management in-house, a move that Lowenstein believes will significantly benefit clients. “Introducing in-house claims management allows Tego to offer a more personalised and responsive service to our customers and brokers,” he says. “This move improves the efficiency and effectiveness of handling claims by ensuring that our clients have direct access to experienced claims experts who understand the nuances of healthcare malpractice.”
The benefits of this approach are multifaceted. “It also allows for faster resolution of claims, better communication and a more streamlined process, ultimately leading to better outcomes and customer satisfaction. We understand that claims can be stressful, so our priority is to resolve them efficiently while ensuring our customers feel heard and supported throughout the process.”
One of Tego’s key strengths lies in its ability to provide customised solutions for its clients. “We pride ourselves on our tailored approach, meaning we individually underwrite each risk, which allows us to tailor pricing and terms to fit the specific risk profile of each entity,” Lowenstein says.
This bespoke approach extends to Tego’s product offerings. “Our entity medical malpractice policy is unique in the market as we
have a combined professional and medical indemnity policy with public and general liability, allowing our customers to have only one policy covering their liability exposures,” Lowenstein says. “Not only does this have pricing advantages but it can also eliminate gaps in cover in situations where an insured had previously held a separate PI and PL policy.”
The role of insurers like Tego will become increasingly crucial as AI continues to reshape healthcare, requiring a delicate balance that encourages innovation while managing risk and protects healthcare providers while ensuring patient safety.
Adaptability will be key for this new world. As Lowenstein puts it, “Tego’s ability to quickly adapt to changes in the healthcare landscape, such as the rise of telemedicine or the use of AI in diagnostics, ensures that our clients are always protected against the latest risks.”
The future of healthcare is undoubtedly exciting, filled with possibilities for improved patient care and outcomes. But it’s also a future that will require vigilance, adaptability and a
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Other changes in the broader healthcare landscape
Rising costs and future challenges
Published 07 Oct 2024
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“Tego’s ability to quickly adapt to changes in the healthcare landscape, such as the rise of telemedicine or the use of AI in diagnostics, ensures that our clients are always protected against the latest risks”
Eric Lowenstein,
Tego Insurance
Specialist expertise
Recognising that every healthcare client is different, Tego evaluates each client’s unique risk profile to provide tailored pricing and coverage, ensuring fair premiums and long-term stability.
Tailored solutions
Tego is committed to providing outstanding claims support, offering a 24/7 medico-legal hotline for expert guidance at any time. Its team of specialists and healthcare lawyers assists clients through complex situations with clarity and care, providing peace of mind when it’s needed most.
Exceptional claims support
Tego fosters strong, collaborative relationships with brokers and clients, maintaining open communication throughout the underwriting process. This approach ensures flexibility and adaptability, keeping coverage relevant as client needs evolve.
Collaborative engagement
Partnering with Lloyd’s, Tego benefits from the global strength and innovative solutions of the world’s leading insurance marketplace. This partnership enhances Tego’s ability to help businesses and communities build resilience for the future.
Global strength and security
Guiding principles for health practitioners using AI
Practitioners remain responsible for safe, quality care
Human judgement must be applied to AI outputs
Accuracy of AI-generated records must be verified
Accountability
Know AI tools training and their intended use and limitations
Understand data usage, storage and privacy implications
Understanding
Inform patients about AI use in their care
Provide an appropriate level of detail based on AI application
Transparency
Obtain consent for AI tools using personal data
Document patient’s response in health records
Crucial for AI scribing tools using generative AI
Informed consent
Ensure patient privacy and data protection
Be aware of potential biases in AI applications
Comply with relevant legislation and regulations
Understand governance arrangements in your practice
Verify professional indemnity insurance coverage for AI use
Ethical and legal considerations
Source: Ahpra, Meeting your professional obligations when using artificial intelligence in healthcare
“While AI can enhance diagnostic accuracy and efficiency, it also introduces new risks, such as errors in AI algorithms and questions about liability in cases of misdiagnosis,” Lowenstein points out.
These issues are not merely theoretical. As AI systems become more autonomous in their decision-making, questions of liability become increasingly complex. Who is responsible when an AI system makes a mistake – the healthcare provider, the technology company, or someone else entirely?
With a portfolio covering over 30,000 medical and healthcare professionals and businesses, Tego has a unique vantage point on the intersection of technology and healthcare liability.
Another area in which AI is proving particularly valuable is radiology. “We’ve seen AI models improving the quality of radiology reports by performing an analysis of the reports for diagnosis, highlighting critical and actionable findings and identifying mismatches in the radiology report and the information in the metadata of the report,” Lowenstein says.
But the potential of AI extends far beyond image analysis. Lowenstein points to an exciting development on the horizon: “Multimodal generative AI is an example of an emerging model designed to handle multiple types of data processes and generate text, images, audio and even video, integrating these diverse streams of information into a coherent output.
“In healthcare, this could mean creating a more complete and nuanced understanding of patient data, leading to better diagnostics, personalised treatment, improved patient outcomes and ultimately more insurable risk,” Lowenstein says.
The AI revolution in healthcare
Lowenstein elaborates on Tego’s risk management approach: “We work closely with our clients to identify potential risks specific to their practice or organisation. This proactive approach allows us to tailor our policies and provide targeted advice that mitigates those risks before they escalate.”
Education forms a crucial part of this strategy. “We provide ongoing education and training opportunities for healthcare professionals, helping them stay up to date with best practices and regulatory changes. This empowers them to manage risks more effectively in their daily operations,” Lowenstein explains.
A proactive approach to risk management
Power of in-house claims management
As the healthcare landscape evolves, so too do the financial pressures on the industry. Rising claims costs present a significant challenge for both healthcare providers and insurers.
Lowenstein identifies several factors contributing to this trend: “Rising claims costs in healthcare are driven by several factors, including increased litigation, higher patient expectations and the complexity of modern medical treatments.”
To manage these increasing costs, Tego employs a multifaceted strategy. “Tego manages the impact of these costs by implementing proactive risk management strategies, offering training and support to reduce the likelihood of claims, and adjusting our pricing models to reflect the changing landscape while remaining competitive and fair,” Lowenstein explains.
willingness to grapple with complex ethical and legal questions.
Lowenstein is optimistic about the future. “AI in healthcare can help us understand complex patterns, generate insights and provide recommendations that can enhance clinical decision-making and automate tasks to improve productivity.”
However, he also acknowledges the challenges ahead. “AI in healthcare also comes with many challenges, such as ensuring the quality of model-training data, privacy, security and compliance, as well as addressing ethical, social and legal implications.”
For insurers like Tego, navigating this complex landscape is both a challenge and an opportunity. By staying ahead of trends, fostering close relationships with healthcare providers and maintaining a flexible approach to risk management, companies like Tego are helping to shape a future in which innovation and patient safety go hand in hand.
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Find out more
Tego is a specialist underwriter offering bespoke malpractice insurance solutions tailored to the healthcare sector’s unique needs. Renowned for exceptional service and proactive support, Tego empowers medical professionals and healthcare organisations to operate with confidence. With a focus on innovation and adaptability, Tego addresses emerging risks by providing comprehensive cover for private hospitals, specialist suites, medical practices, and residential aged care and complex care providers. The product suite includes medical indemnity insurance for doctors, and malpractice and public liability insurance for healthcare entities. For more information, visit tego.com.au.
The role of insurers like Tego will become increasingly crucial as AI continues to reshape healthcare, requiring a delicate balance that encourages innovation while managing risk and protects healthcare providers while ensuring patient safety.
Adaptability will be key for this new world. As Lowenstein puts it, “Tego’s ability to quickly adapt to changes in the healthcare landscape, such as the rise of telemedicine or the use of AI in diagnostics, ensures that our clients are always protected against the latest risks.”
The future of healthcare is undoubtedly exciting, filled with possibilities for improved patient care and outcomes. But it’s also a future that will require vigilance, adaptability and a willingness to grapple with complex ethical and legal questions.
Lowenstein is optimistic about the future. “AI in healthcare can help us understand complex patterns, generate insights and provide recommendations that can enhance clinical decision-making and automate tasks to improve productivity.”
However, he also acknowledges the challenges ahead. “AI in healthcare also comes with many challenges, such as ensuring the quality of model-training data, privacy, security and compliance, as well as addressing ethical, social and legal implications.”
For insurers like Tego, navigating this complex landscape is both a challenge and an opportunity. By staying ahead of trends, fostering close relationships with healthcare providers and maintaining a flexible approach to risk management, companies like Tego are helping to shape a future in which innovation and patient safety go hand in hand.
As the healthcare landscape evolves, so too do the financial pressures on the industry. Rising claims costs present a significant challenge for both healthcare providers and insurers.
Lowenstein identifies several factors contributing to this trend: “Rising claims costs in healthcare are driven by several factors, including increased litigation, higher patient expectations and the complexity of modern medical treatments.”
To manage these increasing costs, Tego employs a multifaceted strategy. “Tego manages the impact of these costs by implementing proactive risk management strategies, offering training and support to reduce the likelihood of claims, and adjusting our pricing models to reflect the changing landscape while remaining competitive and fair,” Lowenstein explains.
Rising costs and future challenges
Tego has recently brought its claims management in-house, a move that Lowenstein believes will significantly benefit clients. “Introducing in-house claims management allows Tego to offer a more personalised and responsive service to our customers and brokers,” he says. “This move improves the efficiency and effectiveness of handling claims by ensuring that our clients have direct access to experienced claims experts who understand the nuances of healthcare malpractice.”
The benefits of this approach are multifaceted. “It also allows for faster resolution of claims, better communication and a more streamlined process, ultimately leading to better outcomes and customer satisfaction. We understand that claims can be stressful, so our priority is to resolve them efficiently while ensuring our customers feel heard and supported throughout the process.”
One of Tego’s key strengths lies in its ability to provide customised solutions for its clients. “We pride ourselves on our tailored approach, meaning we individually underwrite each risk, which allows us to tailor pricing and terms to fit the specific risk profile of each entity,” Lowenstein says.
This bespoke approach extends to Tego’s product offerings. “Our entity medical malpractice policy is unique in the market as we have a combined professional and medical indemnity policy with public and general liability, allowing our customers to have only one policy covering their liability exposures,” Lowenstein says. “Not only does this have pricing advantages but it can also eliminate gaps in cover in situations where an insured had previously held a separate PI and PL policy.”
Power of in-house claims management
Lowenstein elaborates on Tego’s risk management approach: “We work closely with our clients to identify potential risks specific to their practice or organisation. This proactive approach allows us to tailor our policies and provide targeted advice that mitigates those risks before they escalate.”
Education forms a crucial part of this strategy. “We provide ongoing education and training opportunities for healthcare professionals, helping them stay up to date with best practices and regulatory changes. This empowers them to manage risks more effectively in their daily operations,” Lowenstein explains.
In this rapidly changing environment, Tego has positioned itself as more than just an insurer. The company has adopted a proactive stance, working closely with healthcare providers to navigate these new challenges.
“Tego plays a pivotal role in risk management by providing our clients with comprehensive support and resources aimed at minimising potential liabilities,” Lowenstein says. This support includes proactive risk assessments, access to medico-legal advice, and ongoing education and training opportunities.
A proactive approach to risk management
While AI presents new challenges, it’s just one piece of a larger puzzle. The healthcare sector is evolving rapidly on multiple fronts, each bringing its own set of risks and opportunities.
Telemedicine, for instance, has seen explosive growth in recent years. “The rise of telemedicine and virtual care has significantly altered the healthcare landscape, introducing new risks that require careful management,” Lowenstein explains. “These include issues related to patient confidentiality, data security and the challenge of providing care without physical examinations.”
To manage these emerging risks, Tego has adapted its approach. “Tego has adapted its policies and underwriting approach to address these emerging risks by offering coverage that includes protection against data breaches; telehealth consultations; and potential misdiagnoses due to limited patient interaction,” Lowenstein states.
Similarly, emerging treatments like medicinal cannabis prescriptions are reshaping the medical landscape. David Leach, general manager for underwriting at Tego, says, “Emerging treatments, including the use of medicinal cannabis and other developmental drugs, introduce uncertainties and risks due to the evolving regulatory landscape and varying clinical outcomes.”
In response to these developments, Tego is taking proactive measures. “Tego is actively monitoring these developments and adapting our policies to cover potential liabilities associated with these treatments,” Leach says. “Our approach includes providing clear guidelines to practitioners, ensuring they are aware of the legal implications and offering coverage that encompasses the unique risks of these emerging therapies.”
Other changes in the broader healthcare landscape
Another area in which AI is proving particularly valuable is radiology. “We’ve seen AI models improving the quality of radiology reports by performing an analysis of the reports for diagnosis, highlighting critical and actionable findings and identifying mismatches in the radiology report and the information in the metadata of the report,” Lowenstein says.
But the potential of AI extends far beyond image analysis. Lowenstein points to an exciting development on the horizon: “Multimodal generative AI is an example of an emerging model designed to handle multiple types of data processes and generate text, images, audio and even video, integrating these diverse streams of information into a coherent output.
“In healthcare, this could mean creating a more complete and nuanced understanding of patient data, leading to better diagnostics, personalised treatment, improved patient outcomes and ultimately more insurable risk,” Lowenstein says.
The AI revolution in healthcare
“While AI can enhance diagnostic accuracy and efficiency, it also introduces new risks, such as errors in AI algorithms and questions about liability in cases of misdiagnosis,” Lowenstein points out.
These issues are not merely theoretical. As AI systems become more autonomous in their decision-making, questions of liability become increasingly complex. Who is responsible when an AI system makes a mistake – the healthcare provider, the technology company, or someone else entirely?
With a portfolio covering over 30,000 medical and healthcare professionals and businesses, Tego has a unique vantage point on the intersection of technology and healthcare liability.
“At Tego, we’re keeping a close eye on the ongoing developments in this sector by engaging with industry experts and ensuring we remain nimble so we can evolve our policies to include coverage for AI-related errors – and ensuring that liability is clearly defined between human practitioners and technology providers,” Lowenstein says.
IMAGINE AN operating theatre in which artificial intelligence doesn’t just assist but actively participates in the surgical process. That future is rapidly approaching.
“An example of this being explored is in operating theatres which will have AI capability to read and understand prior medical reports of the patient and analyse medical imaging, watch surgical procedures, listen to the conversation in the operating room and interact with the medical team,” says Eric Lowenstein, chief executive at specialist medical malpractice insurer Tego Insurance.
“We’re living in the era of AI in healthcare, where data and algorithms outstrip human capabilities and enable new possibilities for improving health and wellbeing,” he says.
Lowenstein is at the forefront of tackling the challenges and risks that this digital evolution brings and is keenly aware that as AI becomes more deeply integrated into healthcare systems, insurers face a new set of challenges.
Published 07 Oct 2024
Key elements of Tego’s approach to underwriting
Tego’s healthcare underwriters bring deep industry knowledge, crafting policies that address the unique challenges faced by healthcare professionals and organisations. Underwriting decisions are informed by historical claims data, industry trends and emerging risks.
Specialist expertise
Recognising that every healthcare client is different, Tego evaluates each client’s unique risk profile to provide tailored pricing and coverage, ensuring fair premiums and long-term stability.
Tailored solutions
Tego is committed to providing outstanding claims support, offering a 24/7 medico-legal hotline for expert guidance at any time. Its team of specialists and healthcare lawyers assists clients through complex situations with clarity and care, providing peace of mind when it’s needed most.
Exceptional claims support
Tego fosters strong, collaborative relationships with brokers and clients, maintaining open communication throughout the underwriting process. This approach ensures flexibility and adaptability, keeping coverage relevant as client needs evolve.
Collaborative engagement
Partnering with Lloyd’s, Tego benefits from the global strength and innovative solutions of the world’s leading insurance marketplace. This partnership enhances Tego’s ability to help businesses and communities build resilience for the future.
Global strength and security
Guiding principles for health practitioners using AI
Practitioners remain responsible for safe, quality care
Human judgement must be applied to AI outputs
Accuracy of AI-generated records must be verified
Accountability
Know AI tools training, and their intended use and limitations
Understand data usage, storage and privacy implications
Understanding
Inform patients about AI use in their care
Provide an appropriate level of detail based on AI application
Transparency
Obtain consent for AI tools using personal data
Document patient’s response in health records
Crucial for AI scribing tools using generative AI
Informed consent
Ensure patient privacy and data protection
Be aware of potential biases in AI applications
Comply with relevant legislation and regulations
Understand governance arrangements in your practice
Verify professional indemnity insurance coverage for AI use
Ethical and legal considerations
Source: Ahpra, Meeting your professional obligations when using artificial intelligence in healthcare
“We’re living in the era of AI in healthcare, where data and algorithms outstrip human capabilities and enable new possibilities for improving health and wellbeing”
Eric Lowenstein,
Tego Insurance
“Tego’s ability to quickly adapt to changes in the healthcare landscape, such as the rise of telemedicine or the use of AI in diagnostics, ensures that our clients are always protected against the latest risks”
Eric Lowenstein,
Tego Insurance
Copyright © 2024 KM Business Information Australia Pty Ltd
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Contact us
About us
Conditions of Use
Privacy policy
Terms & conditions
People
Contact Us
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Best in Insurance
Resources
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AU