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HUB International 2022 Outlook

Healthcare Industry

 

Stability, Creativity and Growth

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Returning to Equilibrium After a Difficult Year

With labour shortages, changes in the delivery of care and cyber security threats, healthcare will embrace new approaches to risk management and turn 2022 into a year of opportunity rather than survival.

Risks and opportunities abound

Risk management and insurance will be essential in 2022 as delivery models and cyber security change — meaning enterprise risk management (ERM) will take on a new urgency to help manage risk and prioritize opportunities.

For providers who are prepared, 2022 will be a year of opportunity rather than survival.

The healthcare delivery model has been turned on its head, forcing providers to reassess risk management

As hopes for a quick end to the COVID-19 pandemic faded, the Canadian healthcare industry focused on its most pressing problems in 2021: an ongoing labour shortage, worker burnout, a surge in cybercrime and other seemingly intractable issues.

The result has been a reassessment of how healthcare providers view and manage risk while providing quality care and a safe working environment. And because COVID-19 exacerbated the shortage of direct care professionals in 2021, routine safety measures may have been delayed.

But forward-looking organizations that embrace an enterprise risk management strategy (ERM) will be best able to manage the issues that will dominate 2022. A holistic approach to risk can serve the organization like a holistic approach to health serves patients.

Here's what to expect in the healthcare industry in 2022:

An unexpected result of vaccine mandates will be a rise in workers’ compensation claims

Healthcare and government entities are taking concrete steps to alleviate the labour shortage

1. The healthcare labour shortage will not abate

If any industry needed “Help Wanted” signs, it's healthcare.

At the end of 2020, healthcare job vacancies were up 57% over the previous year;1 the shortage is particularly acute in nursing, where 13% of young nurses and nearly 5% of late career nurses are planning to leave nursing now or immediately after the pandemic.2

Senior care is really struggling. Finding sufficient healthcare workers to care for aging seniors is one of the most pressing issues in Canadian healthcare3 — and that was before the pandemic. Vaccine hesitancy among healthcare workers could further squeeze labour markets as vaccine mandates take effect.

Perhaps just as troubling: The mandates’ effect on labour may lead to a rise of workers’ compensation claims, as existing staff work longer hours to make up for employees who are no longer working (i.e., those who leave because they refused vaccination or have been burned out by stress).

But healthcare providers and government are responding. For instance, a widespread embrace of mental health services in 2022 will help reduce burnout. Improved pay, benefits and working conditions can start to alleviate nursing shortages.

Government partnerships with colleges and trade schools are providing tuition support for healthcare programs; government entities are moving towards setting standards for recognition of foreign healthcare designations. In addition, government support is helping institutions re-educate current healthcare workers, giving them upward mobility in the sector, which will encourage new entrants.

This is where a holistic view of risk management comes into play; a strong base of workers has ripple effects across the enterprise, improving patient and employee safety, quality of care and employment liability risk. ERM can help devise solutions to labour shortages through directing providers where and how to invest in its employees.

1 Canadian Medical Association Journal, “Hospitals grappling with nurse exodus,” April 19, 2021.
2 Registered Nurses’ Association of Ontario, “Results of nursing survey point to an alarming exodus from the profession following the pandemic, says RNAO,” March 31, 2021.
3 BC Care Providers Association, “The Perfect Storm: A Health Human Resources Crisis in Senior Care,” January 2018.

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It doesn’t matter if the practice, hospital or senior care facility is large or small: Everybody is at risk of cyberattack

2. Cybercrime will get worse 

There’s no pleasant way of saying it: The wave of cybercrimes directed at the healthcare industry in 2021 will get worse in 2022.

Ransomware, the practice of locking up provider and patient data until a ransom is paid, is an enormous issue in particular. Empowered by the pandemic, ransomware comprises nearly half of all cybercrimes against healthcare providers.4 Canada has the dubious honour of being second in the world in the number of attacks.5

And it doesn't matter if the practice, hospital or senior care facility is large or small: Everybody is at risk.

In fact, it’s been estimated that ransomware attacks quadrupled from 2017 to 2020 and will subsequently quintuple in 2021.6 Premiums on cyber policy renewals are rising 20% or more. Of course, that’s for those organizations that can renew. Those that have made a previous cyber-related claim may not be able to renew at all.

Ransomware and cybercrime are threats that encompass all healthcare practices, whether it’s hospital systems paying out millions in ransom or small practices forced to close.

As a result, improved firewalls, multi-factor authentication, regular training and third-party vendor security audits won’t be optional in 2022. These will be mandatory steps to ensure continued operations and patient health — and providers will have to take those steps in order to obtain cyber insurance.

4 Medical Economics, “The cyberwar against health care practices,” March 5, 2021.
5 Global News, “Ransomware demands double amid COVID-19, with health care industry a key target: report,” March 17, 2021.
6 TechJury, “29+ Alarming Healthcare Data Breaches Statistics 2021,” September 9, 2021.

Regular safety protocols may have gotten delayed or ignored during the COVID-19 pandemic

3. It’s going to be about enterprise risk management

Healthcare organizations have tended to silo their risk management within individual functions such as clinical risk, human resources risk and safety risk. The pandemic revealed siloed risk only aggravates problems.

When a pandemic is raging and providers are overwhelmed, employees become burned out and quit, meaning regular safety protocols can get delayed or ignored. To date, regulators have been less strict on adherence to safety measures during the pandemic.

But that’s going to change in 2022. Organizations that have adopted an integrated ERM approach to safety will achieve multidisciplinary accountability and ensure organizational readiness, especially to manage uncertainty. For instance, understanding how one risk, such as the labour shortage, influences risks across the enterprise is the first step toward stronger risk management, lower insurance premiums and less litigation.

In the end, they will have a much better story to tell regulators, patients, residents and, of course, their insurers.

Read our 2022 Employee Benefits Outlook and learn how benefits can support recruitment and retention.

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Moving forward in 2022

Since the pandemic emerged, healthcare providers have faced management challenges they never anticipated. And there aren’t any silver bullets to solve labour shortages or cyber risk, much less the risk involved in safety issues that may have been ignored.

However, even if these risks can’t be eliminated, they can be managed, controlled and insured. To thrive, the capabilities of a good broker will be invaluable — not merely in securing the right insurance, but in helping healthcare organizations get ahead of the curve in managing risks in an uncertain environment.

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