INDUSTRY DYNAMICS

According to the National Center for Injury Protection and Control, up to 98,000 people die in the United States each year as a result of medical malpractice. Each year more than one million people suffer an injury that could be determined to be a medical mistake.

It is estimated that 31 million people will have an accidental injury that will lead to an emergency room visit each year leading to potential litigation. Personal injury costs are well over $200 billion dollars each year. The number of personal injury cases filed each year increases by an approximate average of 20 percent per year. This figure does not include the majority of cases since most are settled without ever having been filed in court. A majority of all lawsuits involve personal injury in some form or manner.

Healthcare spending is the fastest growing segment of the country's GNP hitting $1.3 Trillion in 2001. Insurance plans pay out more than $310 billion dollars each year, while Public funding exceeds $450 billion dollars annually for medical care. To further complicate the market forces, the Federal Patients' Bill of Rights is directing managed care providers and insurance companies to dramatically step up their quality review programs.

It is little wonder why insurance companies, attorneys, doctors and other health care providers are desperately seeking ways to minimize their risk by increasing protection of their business interests, assets and clients. Add to this equation, claims paid by casualty insurance carriers and it is obvious that an enormous demand exists for quality peer review assistance and medical litigation support from reputable medical experts.

PRMA will initially focus its attention on defense and plaintiff's attorneys, insurance companies, managed care organizations, hospitals and nursing homes as its primary Subscribers.

For personal injury attorneys, increased profitability means more efficient caseload management. With the litigation support provided by PRMA board members, attorneys can achieve their goals of quickly eliminating non-meritorious cases (those cases that, because they have very little probability of receiving a positive verdict, the attorney will NOT be compensated) and expediting settlement of meritorious cases. By settling a case as soon as possible, an attorney saves time and money while creating the opportunity to handle a larger caseload. An effective and efficient search for medical experts that specifically matches the unique needs of the case will also strengthen the case for the attorney's client.

Plaintiff's attorneys are aware that less than thirty percent of all medical malpractice cases result in some level of indemnification and that insurance companies prevail in eighty percent of the cases that eventually go to a verdict. These statistics compel attorneys to obtain medical expert reviews as quickly as possible when taking on a new case to determine the validity of a case and to allow a successful disposition in the shortest time possible.

Insurance companies rely on PRMA services in an increasingly diverse manner including quality and utilization review, quality oversight, medical case management and peer evaluation. In matters pertaining to treatment decisions being evaluated by the Peer Review Organization (PRO), the insurance company or health care provider will be able to easily obtain impartial, objective third-party support and expert medical testimony from members of our Peer Review Board. PRMA provides its clients with valid, reliable and credible defense assisting them in reaching their desired outcome.

In the ever-increasing litigious environment surrounding the healthcare and insurance industries, Peer Review Mediation and Arbitration offers an essential resource for attorneys, insurance companies and other health professionals.

Legal Consulting

With well over one million attorneys practicing law in the United States and over thirty thousand firms specializing in personal injury, there is a significant market segment of the legal industry ideal for Peer Review Mediation and Arbitration. When a personal injury case is brought to an attorney, that attorney must evaluate liability and causation. He or she must assess damages, place a value on the case, determine the case strategy and obtain expert medical reports. The attorney must also review and organize medical records, interrogatories and depositions, as well as any necessary medical research.

Medical experts are used for legal support by both the plaintiff and the defense. When there is a group of attorneys acting on the behalf of the plaintiff, one will find a like group, acting in a similar manner on behalf of the defense. This means that Peer Review Mediation and Arbitration offers a valuable service necessary and applicable to both sides in a litigation case maximizing the Company's market potential within the legal community.

Casualty insurance companies provide coverage that pays the medical and hospital bills as well as whatever a court might award (up to the limits of the coverage) for someone injured in a situation that a court might regard as negligent in nature, by their client. In these instances, the insurance company would have needs similar to defense attorneys.

Out of the thousands of casualty insurance companies (those covering personal injury) approximately 400 of them belong to the American Insurance Association. Companies belonging to this association alone, write more than $60 billion dollars in premium each year. Private healthcare insurance companies write over $75 billion dollars in premium and pay out more than $60 billion dollars in claims each year. Across the healthcare industry, costs associated with medical negligence are estimated at over $30 billion dollars each year.

An attorney for the plaintiff must file an "affidavit of merit", attesting that the attorney has obtained a written opinion of a physician who finds the plaintiff's claim to have merit. PRMA provides a subscriber swift access to almost 10,000 physicians and medical experts to serve and expedite this process.

Medical experts, in assessing damages and valuing cases, ensure that the attorneys from both sides approach negotiations with a true understanding of the case's settlement value. Experienced experts know what influences insurance companies to settle and, through case evaluation, can help develop case strategy, presentations and materials designed to produce a quick settlement.

In case evaluations, well-qualified expert witnesses will often charge from $300 to $700 per hour to review all the records and render an opinion - with no guarantee that he/she will testify in the case. Attorneys may have to interview as many as twenty-five experts before finding two or three willing to testify for their position. Complex cases often require several expert witnesses. PRMA enables subscribers to avoid the typical hit or miss process of locating appropriate and credible medical experts that will support their objectives and ultimately testify for their case.

Attorneys desire greater efficiencies in this process to achieve their overall financial goals. PRMA helps its subscribers to reduce the time and effort necessary in these types of cases, creating a far more cost-effective process. PRMA facilitates an advanced search methodology allowing attorneys to rapidly identify a number of potential medical experts from the Peer Review Board with wide ranging specialties, backgrounds and expertise. For a law firm specializing in personal injury, more efficient caseload management means increased profitability. For other law firms representing clients typically on the defense, a deeper reservoir of medical experts will reduce their liabilities and payouts.

Medical Review

In addition to legal support, insurance companies, Managed Care Organizations (such as HMOs and PPOs), Hospitals, nursing homes and other health care providers are becoming increasingly dependent on objective third-party support for medical decision-making, peer evaluation, quality assurance, utilization review, case management, quality oversight, as well as in litigation cases requiring case valuations and expert testimony. Peer Review Mediation and Arbitration assists insurers and health care companies achieve their goal of assuring their members, patients and the public of delivering proper and necessary health care without quality compromise. This has become a critical foundation for continued business for all health care providers, but especially for HMOs and insurers as legislation supporting a Patients' Bill of Rights is passed in various states, and soon to be enacted at the national level.

Peer Review Board Members are ideal for developing and monitoring quality assurance programs for a variety of health care entities. Standards for quality review for health plans and Medicare providers intensify every year, necessitating the assistance of independent, objective specialists external to the organization.

PRMA is especially beneficial to managed care organizations, hospitals and nursing homes undergoing utilization review and case evaluations brought before the Peer Review Organization. The Peer Review Organization (PRO) program is administered by the Health Care Financing Administration (the branch of the federal government that administers Medicare and Medicaid) and is designed to monitor and improve utilization and quality of health care for Medicare beneficiaries. Their mission is to ensure the quality, effectiveness, efficiency, and economy of health care services provided. The PRO responds to quality of care complaints from consumers and appeals filed if an insurance company denies a service, or terminates, or refuses to pay for a service that the insured believes should be covered.

When an HMO, for example, is being investigated for quality of care concerns or is defending a medical decision, the HMO can obtain documentation, develop supportive defense and locate appropriate medical expert witnesses, independent from the organization, to back up their cases. The appeal process allows insurance companies to demonstrate why a treatment may not be medically necessary or appropriate. Peer Review Mediation and Arbitration can play an invaluable role by extending third party, objective corroboration.

Another one of PRO's many objectives is to improve the quality of healthcare services to ensure routine delivery of high-quality medical care. With this being a prominent objective, PRMA can also be tapped by health care providers to assist in development of quality improvement programs. Publicizing their achievements in quality improvements and their association with Peer Review Mediation and Arbitration, health care providers gain enhanced credibility, public support and patient confidence, leading to improved sales and customer loyalty, so critical to long-term viability in the market place.

Peer Review Mediation and Arbitration offers a unique opportunity for hospitals, insurance companies and other health care providers to differentiate themselves in their respective markets while achieving greater cost efficiencies and positively impacting corporate goals.