In the staffing industry, certain coverages are tailored to the type of operations commonly performed by the workers being placed. For healthcare staffing firms, this typically involves Nurse Practitioners (NPs), Registered Nurses (RNs), and Certified Nursing Assistants (CNAs) being covered by a specific type of Medical Professional Liability known as Allied Healthcare coverage.
However, as healthcare staffing firms expand their business model to include additional types of providers, they may find that their existing Allied Healthcare coverage is no longer sufficient. This can leave certain exposures uncovered, even when job duties are nearly identical to those covered by Allied Healthcare coverage. To avoid gaps, it is imperative to understand how coverage applies across different classes of medical professionals.
Know your placement
Recent findings by Allied Market Research suggest that the global healthcare staffing industry is valued at $40 Billion; a valuation that projects to double by 2031. The vast majority of placements industry-wide are Allied Healthcare staff. These professionals “operate in healthcare facilities primarily to maintain the operation of the healthcare system by providing technical, diagnostic, therapeutic, and support services,” including NPs, RNs, and CNAs as mentioned above.
Profit margins for Allied Healthcare staffing continue to decrease for various reasons, including decreased demand, increased competition, and an increase in popularity of MSP/VMS services in favor of direct contracts. Accordingly, healthcare firms are exploring different types of placements that could drive higher revenues, such as dentists, doctors, and surgeons. In fact, Allied Market Research even suggests that Locums could have a roughly equal share of placement type compared to Allied staffing within the next decade.
What’s the difference?
Though Allied staff are not technically doctors, the fact is that they are still skilled advanced practitioners. Often, they can perform almost all the same duties as physicians, including diagnosing illnesses, rendering care, and even prescribing medications.
Accordingly, the coverage forms for Professional Liability (PL) policies covering both types of individuals are very similar. Some clients may suggest that a Medical PL policy built for Allied Healthcare placements (or including an Allied Healthcare endorsement) isn’t “true” Medical Malpractice, but in many respects, the coverage is nearly identical.
Both Medical PL policies and Medical Malpractice policies for physicians are designed to protect and indemnify medical professionals from negligence, errors, omissions, or physical harm done to a patient via medical error in a procedural setting. The primary distinction between the two types of policies is simply that most carriers exclude Medical Doctors (MDs) from their Allied Healthcare coverage, essentially creating two “classes” of healthcare staffing professionals. On one side, you have MDs (physicians, dentists, surgeons, etc.), and on the other, all other healthcare placements rendering care that aren’t MDs.
Putting it all together
Medical PL coverage for Allied Healthcare typically provides blanket coverage for all placements, while Medical Malpractice coverage for MDs requires individual scheduling on a policy. This individual approach allows for detailed claims histories per physician, which is important for credentialing at new facilities. The key difference lies in the classification of the healthcare professional—Locums, MDs, and physicians are treated similarly, but Allied Healthcare staff have different training and licensing, leading to different risk profiles and insurance costs. Effective communication with clients is essential to explain these cost differences. Ultimately, both coverages protect against similar risks but are tailored to the specific classification of healthcare staff, and brokers must ensure clients have the appropriate coverage for their needs.
If you have any questions regarding the PL gap in healthcare staffing, please contact a Marsh McLennan Agency (MMA) advisor.
