Peter Reilly 00:00:00 If you understand your risks as a practice, lean into them. And by that I mean, you know, look for solutions and actions and things to do to help mitigate it. Those are there.

Keith Reynolds 00:00:20 Welcome to Off the Chart: A Business of Medicine podcast, featuring lively and informative conversations with healthcare experts, opinion leaders and practicing physicians about the challenges facing doctors and medical practices. I'm your host, Keith Reynolds, and this week we've got a conversation between Medical Economics managing editor Todd Shryock and Peter Reilly, North American healthcare practice leader and chief sales officer at HUB International. They'll be talking about the risks medical practices face in 2025, and will offer up some advice for practice managers looking to stay prepared.

Todd Shryock 00:00:56 I'm here today with Pete Reilly, practice leader at Hub International to talk about risk management looking into 2025. Thanks for joining me.

Peter Reilly 00:01:05 Happy to do it Todd. Glad to be here.

Todd Shryock 00:01:07 So you guys have a new report out, the 2025 US Health Care outlook, risk management and economic viability. And reading through it, it seems like if you're in health care, you might want to hide behind the couch until 2026.

Todd Shryock 00:01:21 I mean, there's a lot of a lot of things to think about coming into the new year.

Peter Reilly 00:01:27 It is indeed. Todd and the like many industries. 2024 2025 is is going to be interesting for a number of reasons. not sure I'd want to say you have to hide behind the couch, but I certainly take your meaning that it is a challenging time. But I think what we at Hubbard particularly are trying to do is to say, if you have an understanding of some of the risks and the dynamic challenges that are going to be there, and there is a process to plan and prepare for it. I hope it's not lost in that. the various outlook reports we have, the the resiliency that can be, there for health care institution will allow you to continue through. But, I'm not sure 2026 is is going to be an easier year per se, but it's, it's a very challenging time in the health care industry as a whole for a number of reasons.

Todd Shryock 00:02:23 One of the things the report touches on is the something I think everybody is well aware of in healthcare is costs keep going up, reimbursements keep going down.

Todd Shryock 00:02:33 you know what's driving this? Do you expect this trend to continue through 2025?

Peter Reilly 00:02:39 Whether the answer to the latter part of your question is, do we expect it to continue? based on what we knew now, the answer is yes. the costs are increasing for a whole myriad of reasons. increased, you know, inflationary pressures on so much that impacts the human or, you know, people's households also impacts organizations and health care. So the cost of doing business has gone up from wages for the not only clinical staff, but also the folks in the various facilities. And that's not necessarily a bad thing. We want to pay these these individuals who work in health care in a good wage, because we have a very robust and good health care system, but we want to continue to keep it that way, and you want it to be a viable career. But that increased labor cost puts additional pressures on so many other things within the care delivery organization that they have to essentially shoulder those burdens. There's also increased use of medications.

Peter Reilly 00:03:48 And, you know, in pharmacy drugs, which are expensive, the, you know, the GLP one and the costs that have gone there, That gets right back to the not only the provider, but the consumers. and there's really a increased usage by an elderly population that, it does cost more to treat people whose bodies are breaking down, be it through surgeries or just general, illness. So all of those factors will continue. We are, in some respects, victims of our own success in terms of extending the, you know, the lifespan of of most people. The reimbursement side is always a challenge because whether it be CMS, you know, the centers for Medicare and Medicaid or private health insurance providers, they are trying to control costs that they then have to pass back on to the consumer in terms of premiums or or tax bills, depending on where you are. And so they are really trying to hold down their reimbursement levels for, again, ideally the right reasons. But it puts sort of the vicious cycle back into continued financial pressures on the providers themselves or their organizations, and the need to increase costs to, you know, almost run in place.

Peter Reilly 00:05:07 there are a number of very good articles that have been published in a number of, fantastic, journals like yours and others that speak to this dynamic push pull. It's very much a, you know, market driven dynamic, but at a macro sense, yes, we expect this to continue because wages, while slowing a bit continue to rise. And then the inflationary pressures that we see both in the US and in Canada persist. And so that's going to make the the payers want to continue to keep their reimbursements down so they don't continue this, you know, sort of never ending vicious cycle.

Todd Shryock 00:05:46 Costs have really hit rural hospitals hard.

Peter Reilly 00:05:49 Oh, yes.

Todd Shryock 00:05:50 Based on the recent struggles of rural hospitals. Should physicians at these facilities, or physicians that do business with them be worried about their future?

Peter Reilly 00:05:59 Sadly, the answer is both yes and no. Yes. To many rural hospitals, critical access hospitals and the smaller community hospitals have closed in really the past decade. And to our discussion on the prior question, the financial pressures that these institutions face continue to really, create a strain for them to continue to deliver the level of care that they have.

Peter Reilly 00:06:29 that is going to persist. And physicians who work in these or work with these facilities should ask some tough questions so that they can protect themselves. I think the the side where I wouldn't be as concerned is I think America is certainly waking up to the reality that when you close a number of these smaller hospitals, these rural hospitals. You take out not only a good employer base. For those localities, but you really create almost health care deserts in many parts of the US where people simply don't get the health care they need. And so I think there's a gradual awakening and a credit to a number of lobbying organizations that are saying that is really unhealthy. In a particularly post-pandemic America, where a lot of people moved out to these more rural locations, the ripples that it will now have, I think go much farther than what they did previously. And so there is some awareness at state and local levels for the need to help protect these institutions. And while that's still a newer trend, if it continues, as I hope it will, and I think it will.

Peter Reilly 00:07:47 I think the fear that these hospitals might close will be lessened, but at the moment I think it is a, appropriate for practitioners to ask questions, know the financial health and ask what are the plans to deal with it? Because these communities desperately need these institutions need those providers. But you have to do it with eyes wide open.

Todd Shryock 00:08:10 The report also points out that the worker shortage and the burnout that comes with it aren't going away anytime soon. Is there anything a physician practice owner can do to help mitigate the mental strain for his or her employees to increase retention?

Peter Reilly 00:08:26 Yeah, this is probably, in my opinion, the single biggest, sort of silent killer, if you will, to health care delivery for physicians offices. Health care delivery is not a rational business. Sometimes from the patient perspective, we want to be cured. And so the pressure is always on the the workforce that, you know, be the doctor, be it the, you know, the a receptionist at the front desk. it is an intense environment in which to work.

Peter Reilly 00:08:56 And I do think this is going to continue because it is a, as oftentimes as much a calling as a career for many people, even those folks at the front desk. So it is going to continue to be a, a pressure and a burnout situation. There are really a number of ways that these practices, I think can help alleviate some of that. We could do an entirely separate article on this, but there are a number of enhanced employee benefits that don't necessarily cost too much, enhanced child care strategies that maybe a community, particularly as we talked earlier about rural hospitals, can coordinate across certain communities. there are a number of, flexible workforce, excuse I should say, you know, flexible timing a number of days that you can three on or say four on and three off types of pieces. But the best advice I can give an answer to that is talk to someone within that firm that provides a number of your employee benefits, because there are a number of underutilized tools that are there. And if nothing else, providing some access to, I'll call it wellness counseling.

Peter Reilly 00:10:15 There are a number of services, not so much the, you know, the services that people have always had for, you know, those who face addiction or other issues, but simply a a platform where workers can talk about this in a very safe and welcoming environment, will. And there's enough evidence in the psychiatric community to say that, you know, when they talk about this and they can grapple with it openly rather than hide behind the burnout and the psychological challenges. It does make a difference. And a lot of those can be done. Those types of platforms can be done virtually. You know telehealth type of arrangements. And they can be very cost effective. But that is going to continue to be. And it's going to vary by location. So there is no one size fits all answer there. But the first and best place to ask is go to. An employee benefits broker who handles your the traditional physical health side of the house and ask about the tools and resources that are now available for, you know, employee resiliency.

Peter Reilly 00:11:22 And there are a number of I keep calling them tools, but their strategies and other approaches that are now beginning to take hold and some with real success.

Speaker 4 00:11:36 Say, Keith, this is all well and good. But what if someone is looking for more clinical information?

Keith Reynolds 00:11:41 Oh, then they want to check out our sister site, Patient care online. Com the leading clinical resource for primary care physicians again. That's patient care online.com.

Todd Shryock 00:11:55 We can talk about risk management physicians without talking about malpractice. So what's happening in the medical professional liability markets. And how do you see that playing out for rates in 2025.

Peter Reilly 00:12:08 Well, the MPL marketplace medical professional liability marketplace continues to underwrite at a loss, meaning for every dollar they take in the larger industry is paying out more. And so that continues to put financial pressures on the insurance carriers and thus pass on premium costs to the providers. There are certain pockets in the country that are now seeing a great deal of more and effective competition, or sort of rate, I wouldn't call them decreases but stabilization.

Peter Reilly 00:12:45 Some will see decreases with outstanding losses. But at least we're beginning to see some more stabilization in a number of places. There are a handful of jurisdictions New Mexico, Georgia, Montana, a surprise, sort of participant in that list that have come about in addition to the traditional, really challenging environments of Cook County, Philadelphia County, the five boroughs of New York, those things. So the market continues to be, a real challenge for both buyer and carrier. I don't believe the answer is always just to go market and to try to find just a lower premium. This is really a process driven decision on the part of underwriters, and I think buyers need to become more actively involved, understand where their losses are coming from, because that's what's driving so much of this. Frequency continues to be stable or down, but severity is up. So why is that happening? And really understanding those cost drivers and taking, mitigation steps to really try and attack those root causes that will bring better long term success and lowering rates than just going out to market every single year and seeking those premium.

Peter Reilly 00:14:04 But I would also encourage doctors to talk with the underwriters and explain to them first hand rate fatigue is real, and I simply cannot continue at this, this pace. I need help. You know, there's a lot of talk of partnerships from underwriters and carriers, as there should be. So it's okay to ask that, hey, I can't take a double digit increase this year. I can only take X. Otherwise, you impact my quality of care, which ultimately hurts them. A very frank dialogue is not only warranted and appropriate, but I think necessary because, unfortunate losses from certain markets have impacted most of the community and that degree of dialogue between the insured and the insurer needs to take place. That is, having reaping better results from what we are seeing than just trying to take a shotgun approach to the marketplace. But overall, it's still tough. It may be getting a little better. Again, in the macro sense, but we're probably still at least a year or two away from really being able to potentially see a broader rate reduction environment.

Todd Shryock 00:15:09 We're seeing a lot more natural disasters that can take a practice offline for weeks or even months. What can a practice owner do to mitigate the risk those types of events posed?

Peter Reilly 00:15:21 There's really two, I think, very important pieces that the practices need to undertake. They need to have a very frank conversation about where they're located, what is their exposure to climate related risks we've always focused very heavily on. You know, hurricane and, you know, catastrophic weather, locations, Florida or the, the wildfires of California. but even now where you see severe cold, which is currently taking place in certain parts of the US, practitioners need to take a very clear eyed view of what are their, you know, weather or climate risks, determine what they are, and maybe it's just a potential of a frozen pipe. But if you look at what happens, you know, in western North Carolina, I don't think anybody in their, fair reflection would say, yes, this is what we thought was going to happen.

Peter Reilly 00:16:19 And so that's number one, is to have a very, frank view of what are your exposures? And then number two, and this is really one that I think the the medical community does not always take advantage of is every single property insurer and even, other many other insurance carriers want to help prepare their clients to mitigate their exposure to risk. Go ask about these resources. They are there if you are in a flood prone area. What are some basic steps that can be done? One for, you know, life safety first and foremost. But then are there simple things that can be done in order to minimize the amount of time in which you are out of operation? Are you properly insured for what that business interruption or extra expense might be? But really tapping into those carrier resources, usually your property insurer that will have a number of guides, ideas, resources to help mitigate. And then if there's a third piece and this one historically was a post-disaster problem, but putting together a disaster recovery plan is in order anymore, simply because we're seeing it happen so much more.

Peter Reilly 00:17:37 This isn't or doesn't necessarily need to be a, you know, voluminous document, but simply it's a checklist at a minimum to make sure you're addressing the things that that which you can mitigate. You do. Because when the disaster hits, often in for obvious reasons, your mind is on just self-preservation for the individual, your staff, their families, etcetera, etcetera. So as a part of utilizing the resources available, putting together at least the beginnings of a disaster recovery plan that can then be utilized in making it meaningful, I think is warranted because unfortunately, I think there's most parts of the country of Vermont just a couple of years ago had horrific flooding there that really shut entire communities. You know, there's almost no part of the country. The extreme heat in the southwest even was closing some offices. And so knowing how to respond, you know, planning for it before it happens is going to be vital. But utilizing the resources you have to help you do that, and even some instances maybe even give you a turnkey options will help address that and will pay dividends, because this is, a huge exposure to the risk management and insurance industry and people want to help.

Keith Reynolds 00:18:59 Oh, you say you're a practice leader or administrator. We've got just the thing. Our sister site, physicians practice your one stop shop for all the expert tips and tricks that will get your practice really humming again. That's physicians practice.com.

Todd Shryock 00:19:16 The report also notes that healthcare continues to be a major target for cybercriminals, and I think everyone's aware of the change, healthcare cyberattack and how it affected the entire healthcare system. How can practices manage the risk not just to their own facility, but also the risk posed by vendors they might rely on to do business.

Peter Reilly 00:19:37 Well, in the heart of your question, Todd, I think is one of the vital pieces that is overlooked, and that is the interconnectivity of systems, certainly, medical practices or facilities that do all the right things of keeping the patches up to date on their their various programs and, you know, having firewalls and security pieces, you know, that's all well and good and that needs to continue. And there should be continuous training for the front line because, you know, people are the best defense to prevent, you know, cybercrime from really impacting you.

Peter Reilly 00:20:12 But an understanding of the interconnectivity and change is the perfect example of how another network could really bring yours down. And speaking to any of your vendors, your contracts, or anyone you were working with where you have that cyber connectivity, understanding their defenses. And it's a step that probably five years ago, people didn't even think about taking at least the general medical practice. Contractually, if those that interconnectivity becomes a problem, you should be reimbursed by them. You should have adequate, you know, contractual protections to go through that. And as we spoke a moment ago about the climate disaster recovery plan, the same should really be there for a data security plan. And if all else fails, and I'm not advocating at all that people go back to paper medical records. But there should always be and this is risk management 101 or 102, almost a, you know, a backup and duplication of a vast majority of the of your records because as the owner, the covered entity under HIPAA and other regulations, you need to take proactive steps so that you can secure your data for your own patient population.

Peter Reilly 00:21:31 cybercriminals know. Health care is one of the, you know, sort of perfect, you know, five points in the road where you have fi personal health information, PII, the personal identifiable information, all the financial data that comes with it. And I had to make a medical appointment just today and had to give out my birthday, confirm my address. And so you are giving away much of that, PII that cybercriminals can use, but it's also back to some basic 101. And that's, as I mentioned, some of the training of don't click on links. If the staff doesn't understand an email or doesn't get it, pick up the phone. Talking to an individual often works better, but we do not see cybercriminals making any less effort to come after health care. And to think that just because you have either embedded insurance and perhaps your, you know, medical malpractice policy or you may buy $1 million of coverage in a standalone cyber policy. That is not enough. There are a number of, let's say, proactive steps that have to be taken.

Peter Reilly 00:22:39 And what we're also seeing is the plaintiffs bar the act that if you don't take those proactive steps, they will come after you for any one of a number of other allegations. So I think cyber is now a or should I say data security is a very well known risk anymore. I still worry that too many providers, particularly physician practices, don't take it seriously enough. They will think I don't own the records. It's off in the cloud with whomever. Talk to a lawyer and let them answer that for you, because you may not like the answer your insurance broker gives, but that's often the case. It's theirs, and they need to protect it as if it was their own, you know, wallet.

Todd Shryock 00:23:21 Assuming we haven't scared everyone off by now. Is there anything else risk management wise. Physicians need to be thinking about going into 2025.

Peter Reilly 00:23:32 Yeah. And Todd, it's hard because we don't want to give the impression that we're trying to scare them off every one of these issues. And it is a scary world when you think about all that could go wrong.

Peter Reilly 00:23:44 But as I mentioned, there are so many resources available to, medical practices and practitioners that can help mitigate that. And oftentimes they are either paid for in the premiums or you work with a, a broker or a consultant or other intermediary who can help address these steps or these risks, rather. And so what I would say that practitioners need to know, or at least take some time, is just as they sit down to do the planning with with patients and their charts and look at the financials. Any efforts taken to understand the risks that are faced. And in our outlook, we talk about leaning into it. it's a little bit like having, you know, wellness for illness prevention, if you understand what the illness can be and lean into behaviors and actions and things that you can do to mitigate. You know, don't smoke. One of the best ways not to get there prevent, lung cancer. If you understand your risks as a practice, lean into them. And by that I mean, you know, look for solutions and actions and things to do to help mitigate it.

Peter Reilly 00:25:00 Those are there. And there's a very robust community that that can help. And so leaning into that as a practice to understand it will allow for and while all this is scary, it's mostly scary when you don't understand it. Once you do, you know, short of a natural disaster which we can't control, so many of the other things are at least knowable. And just like the practice of medicine and the treatment of a disease, there is a process by which you can address them. And then certainly, I think sleep more sadly, knowing that your practice is unlikely to be to have a, you know, absolutely calamitous outcome in the event of a risk coming to fruition.

Todd Shryock 00:25:47 You give us a lot of good stuff to think about going into the new year. As always, thanks for joining me.

Peter Reilly 00:25:53 Todd. Always my pleasure. And I still remain very bullish on health care in America. We have fantastic practitioners and I hope they will reach out for the resources, not just my organization, but there's hundreds of them in their associations and publications like yours to educate them.

Peter Reilly 00:26:10 I think there's, brighter days ahead, despite what we may seem to scare them. And I apologize for that.

Todd Shryock 00:26:19 Alright. Thank you again.

Peter Reilly 00:26:21 Thank you, Todd.

Keith Reynolds 00:26:30 Again, that was medical Economics managing editor Todd Shryock and Peter Riley, a North American healthcare practice leader and chief sales officer at Hub International. My name is Keith Reynolds, and on behalf of the whole medical economics and physicians practice teams, I'd like to thank you for listening and ask. Could you please subscribe on Apple Podcasts and Spotify so you don't miss the next episode? Also, if you'd like the best stories Medical Economics and Physicians Practice Publish delivered straight to your email every single day of the week. Subscribe to our newsletters at medicaleconomics.com and physicianspractice.com. Off the chart: A Business of Medicine podcast, is executive produced by Chris Mazzolini and produced by Keith Reynolds and Austin Littrell. Medical Economics, Physicians Practice and Patient Care Online are all members of the MJH Life Sciences family. Thank you.