We don't need Ph.D.s to identify the current huge impact or predict the tremendous growth of the alternative medicine and wellness industries. Laser eye surgery, Botox treatments, Medspas for the rich and famous (and not-so-rich and famous)–it is marketed to us heavily, with great response.
With this convergence of the beauty and the health care industries, new modes of therapy, new categories of providers and new medical delivery systems often cross the conventions understood and able to be handled by the traditional medical malpractice arena.
In some cases, the therapies are delivered by licensed physicians and other licensed health care providers, but the treatment modes–lasers and other new technologies–or the delivery settings are unconventional.
In other cases, nonprofessionals are administering "health care-like" treatments or services. Examples of the latter include health spas, diet and nutrition centers, or natural healing or homeopathic medical centers. Having one's toenails trimmed, a back massage and a minor face tuck all on an extended lunch hour visit to a nearby spa is not so far-fetched any longer.
Even when treatments are administered by professionals, they would not be covered by their general liability policies for the actual procedures they are performing, yet they also fall outside medical malpractice coverage.
Enter the creativity and risk responsiveness of the excess and surplus lines marketplace with specified medical coverage. A kind of medical malpractice for those not covered by medical malpractice, specified medical is one of the fastest-growing areas of coverage right now, expected to only grow larger, perhaps exponentially, and a great practice builder for agents choosing to learn this area.
All signs–demographic, social, technological and economic–point this way.
o New clientele
First, as it eases into senior status and retirement, our baby boom generation–more than 70 million of whom will reach the age of 65 during the year 2011–is leading the way to wellness. Accustomed to having things go their way, these folks are taking control as much as possible when it comes to looking better, being healthier and living longer.
They also have the discretionary income to spend on such wellness services. Look no further than the cover of a recent AARP Magazine: "Special Report, Add 10 (Healthy) Years to Your Life," or "Beat Pain, 5 Easy Stretches You Can Do Anywhere."
The miracles of modern medicine haven't done anything to discourage this generation's "beat-the-odds" mentality. Today's 60 really does seem to be yesterday's 40 for baby boomers.
The wellness industry offers an abundance of opportunities for agents who take the time to become familiar with the big names and big money that have come together to create this fertile new territory. The signs are everywhere, with many therapies or activities that once seemed distinctly on the fringes of society now entering the mainstream.
o New medical devices
While the wellness industry has its back-to-nature aspects, one of the prime movers of specified medical has been the introduction of new technology to medicine. Lasers have found their way in a number of treatment areas, including eye care, dentistry and the ever-growing confluence of appearance and dermatology, such as hair removal, varicose vein removal and tattoo removal. It's not a coincidence that many of these procedures are elective, not regularly covered by health care insurance programs.
An already classic example is laser eye surgery, which the traditional med-mal carriers wouldn't cover–although that is changing as the technologies and procedures are better understood and loss experience is more firmly established.
Specialized imaging "businesses" are also starting to appear, offering a roster of non-invasive scans and promising early detection of atherosclerosis, impending aneurysm and so on.
Still, many areas that look to the specified medical insurance market are non-intrusive or minimally intrusive. Nonprofessional technicians may deliver a lot of the care or treatments, but the risk of untoward events isn't really that great.
The expanding "business" opportunities presented by new technology, new medical devices, new protocols, or new medications and supplements hasn't been lost on the medical profession itself. Consider Botox (basically a mild form of curare, a paralyzing agent), which can now be found administered by cosmetic surgeons, ophthalmologists, dermatologists and even dentists.
o New owner/operators
In a related manner, specified medical has grown as the economic model for health care has become more complex. Entrepreneurs now market franchise operations to health care providers, including the increasingly popular medspa and laser hair removal categories.
Just as most pharmacists no longer operate independent drug stores within which they conduct their pharmacy practices, more health care professionals in general are employed by health care organizations or businesses owned by nonprofessionals. For example, a chain of veterinarian clinics may feature vets hired by a non-vet business operator, who actually owns the clinics.
o New situations
The specified medical specialty insurance market has also helped provide professional liability coverage for many nontraditional programs or special environments that provide service to society.
Examples include drug treatment clinics, clinical trials, organ banks, orphan drug programs, or free clinics set up by church groups and other nonprofit organizations to administer to the underprivileged. Often, insurance agents for the sponsors will need to turn to the specified medical market to obtain professional liability for such clinical activities, including protecting health care providers donating their time and services to the clinic.
Allied health professionals may also turn to the E&S markets, especially those whose roles or responsibilities have expanded in the modern health care delivery system. Examples include physical and occupational therapists, physician assistants, or certified nurse practitioners.
o New treatments for old problems
While the lust for life or vanities catered to by the wellness industries amply explains the growth of specified medical, it will also likely be propelled by more serious issues.
The impulse to conquer maladies, learning disabilities, the obesity epidemic and the impending Alzheimer's epidemic are four examples that come quickly to mind, which may also drive people to alternative medicine or novel therapies, much as we may have seen in previous decades with stop-smoking clinics or cancer clinics.
There is one final point to consider. Many of the areas we have touched on are heavily advertised and promoted and seem to carry an implicit–if not downright explicit–promise of benefit or success. At present, these new health businesses don't seem to be deluged with lawsuits alleging malpractice or nonfulfillment of a guarantee, but it will be interesting to see if that changes.
Is it health? Is it beauty? Is it a pot of gold at the end of the rainbow?
As never before, the threads are running together, creating an environment well suited for the E&S marketplace and presenting outstanding opportunities for agents. Specified medical is coming to its own New Age, providing the necessary insurance cure for the burgeoning wellness industries.
Insurance agents would do well to take note. Get smart on the coverages, locate the business (which shouldn't be hard to do), and join in the success that an explosive growth industry can provide.
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