Michael Welz
Senior Vice President, National Practice Lead
Margins are shrinking. Demands are rising. Across the healthcare sector, the cost of delivering care is increasing faster than the revenue it generates—shifting what started as a COVID-era challenge into a longer-term issue. In this environment, even small disruptions can affect operations and put financial stability at risk.
Marsh McLennan Agency’s Healthcare Risk Report identifies five key forces contributing to the industry’s vulnerabilities: cybersecurity threats, labor shortages, regulatory complexity, technology disruption, and the challenges of value-based care. Each has financial implications, and together, they can compound.
- Cyberattacks now cost healthcare organizations an average of $9.77 million per breach, which is higher than in many other industries.
- Labor shortages are projected to leave the U.S. system short more than 100,000 workers by 2028, increasing wage inflation and turnover-related costs.
- Regulatory enforcement continues to rise, with $1.7 billion in False Claims Act settlements last year.
- Technology disruption and AI adoption are creating coverage gray areas where cyber, errors and omissions (E&O), and malpractice insurance overlap.
- Value-based models expose providers to unpredictable reimbursement tied to outcomes they may not fully control.
Traditional insurance programs weren’t designed for this level of volatility. They manage isolated risks—cyber here, malpractice there—but today’s threats cross clinical, digital, and financial boundaries. The result is gaps in protection, rising premiums, and a growing need for a different kind of safety net.
How to build a broader safety net
Protecting a healthcare organization today means more than renewing policies. It requires integrating financial, operational, and technological safeguards that reflect how risk moves through the business.
Here’s how healthcare leaders can build a broader safety net to close coverage gaps and strengthen resilience.
1. Coordinate coverage across overlapping risks.
Traditional insurance structures were designed for separation—cyber in one policy, malpractice in another, E&O on its own. But today, those lines are blurring. A ransomware attack can interrupt patient care, trigger malpractice claims, and cause regulatory scrutiny—all from one incident.
Coordinating policies across cyber, medical professional liability, E&O, and managed care E&O helps ensure these intersections are covered, not caught in the gaps. This alignment also gives underwriters a clearer, more complete picture of your risk posture, which can improve pricing and terms.
2. Layer protection with financial stability.
Financial resilience in healthcare depends on more than claims protection. It’s about safeguarding revenue streams, cash flow, and credit exposure when external shocks occur. Three often-overlooked coverages can provide that foundation:
- Trade credit insurance protects against customer or supplier insolvency, particularly for MedTech and systems sourcing globally.
- Medical professional liability shields providers and organizations from treatment and care-related claims, which are increasingly intertwined with technology use.
- E&O covers administrative, billing, or tech-enabled service errors that cause third-party financial loss.
Together, these layers create a financial backstop that extends beyond traditional insurance.
3. Integrate data and analytics into every decision.
The most resilient organizations connect data from claims, workforce health, and compliance systems to anticipate risk before it escalates. Tools like Planning & Analytics for Total Health (PATH) and Workers’ Health 360® help healthcare leaders analyze absenteeism, injury trends, and benefits utilization to identify where risk is rising and where early intervention can drive savings. This approach not only improves insurability but also demonstrates accountability to boards and payers.
