Capacity and creativity


Capacity and creativity

Coverys Custom Accounts is Coverys’ response to the impact of the Affordable Care Act on healthcare providers, as Joe Zorola, chief underwriting officer, describes.

The Affordable Care Act (ACA) has significantly changed the business of healthcare delivery, and the impact of these changes on hospitals, health systems and physician groups is certain to continue over the final three years of its implementation.

Clinical and financial integration of this new healthcare delivery system is posing challenges for providers on all levels, thus bringing with it a trend towards structuring delivery of care on a larger and broader scale, with a focus on accountable care generally emphasising increased quality and reduced cost. Of note are the significant challenges to physicians in private practice resulting in a great migration from the independent sector to employment with large systems and hospitals. These systems and hospitals provide physicians with tools and support, such as access to electronic medical record technology already tested for ‘meaningful use’, that are simply not available or cost-prohibitive in the small to medium-sized independent practice setting.

In turn, hospitals continue to consolidate with other hospitals or be absorbed in established health systems, at the same time as acquiring independent practices to expand their scope of services. Ultimately, the risk profile of these larger and more complex organizations is increasing, corresponding to an increase in overall medical professional liability risk.

Traditional medical professional liability insurance products will need to be enhanced in order to address the insurance protection needs of the evolving healthcare delivery model. In response to the needs of this rapidly changing industry, Coverys, a leading provider of medical professional liability insurance and related services, has established Coverys Custom Accounts (CCA). CCA is a large account underwriting facility uniquely focused on offering solutions to large health systems, hospitals, and multi-specialty group practices that address the specific risks associated with these complex structures.

The formation of CCA provides this complex market segment with a redesigned combination of insurance capacity and program creativity. Features include large claim and aggregate deductible programs, excess insurance and reinsurance coverage for healthcare liability captive insurance companies, and capacity and services supporting self-insured retentions including tailored coverage endorsements that either broaden current protection or address risk exposures not offered in traditional primary policy coverage.

Additionally, CCA provides resources needed to evaluate and structure loss portfolio transfers from captive and self-insurance programs that may no longer meet the needs of consolidating hospitals or large multi-specialty practice groups migrating to hospital system employment.

CCA marries Coverys’ deep experience in working directly with the insurance and risk management needs of the physician population—and the accompanying wealth of data analytics in the physician space—with extensive hospital underwriting experience. Specifically, as hospitals acquire physician practices and actively recruit physicians to expand clinical capabilities, CCA provides a complete perspective on the risks associated with this strategy and can better predict the impact these new exposures will have on a hospital’s risk profile. The result can be reduced claim exposure, improved quality of outcomes and bottom line margin enhancement.

Coverys Custom Accounts (CCA) will strongly address the needs of captive reinsurance and excess coverage to support the long-standing captive programs that many of the larger health systems and hospitals have maintained over the years. Furthermore, CCA will be the point of contact for accessing Coverys-owned segregated cell captive programs for entities and providers seeking to structure self-insured solutions.

As many health systems are growing in scale, some are also growing geographically, straddling more than one state. Systems with recognized centers of excellence are joining forces with small to mid-sized hospitals to expand their market and deliver services that were not previously offered to communities in their region. CCA also responds to this geographic complexity, deepening Coverys’ relationships with brokers who have a multi-regional or national footprint.

Healthcare reform is all about shifting the industry to patient-centered care through a greater emphasis on the treatment of whole populations. CCA aligns with this philosophy by providing health systems with the insurance capacity and supporting risk management services that they need in promoting this holistic approach to population management and healthcare cost reduction.

CCA provides dedicated resources that help large healthcare providers understand, coordinate, and mitigate risk, inevitably resulting in better patient care and reduced costs. In this new, evolving and often murky healthcare landscape, it is becoming increasingly clear that the future of healthcare rests squarely on the effective management of larger patient populations. Coverys is uniquely positioned to partner with large healthcare providers and help them navigate this new terrain with the establishment
of CCA.

Risk management services

CCA clients will also have access to the Coverys suite of comprehensive risk management and patient safety educational programs, as well as online and in-person educational programs that provide continuing medical education credits for physicians, nurses and other healthcare providers. The depth of Coverys’ clinical risk management offerings, such as its newly acquired ELM Exchange, are unmatched in the underwriting industry.

For example, the risk management services offered to CCA clients will assist hospital administration in assessing existing protocols, policies, and procedures, resulting in significant clinical recommendations aimed at improving how care is rendered and risk is managed, and reducing risk profiles and increasing patient satisfaction. These assessments provide an unfiltered and first hand account of the facility’s existing clinical and business risk mitigation strategies.

By embracing a true partnership with the healthcare organization, Coverys can identify the essential and often overlooked areas in clinical risk management improvement. At its core, CCA understands that innovative program design must emphasize the necessity of risk management, risk mitigation, and risk education services. Coverys underwriting and risk management services, provided through CCA, can help large healthcare systems reach their organizational and institutional goals, such as reduced readmissions and improved quality metrics which directly impact reimbursement levels and ultimate financial performance.

To further ensure a full understanding of emerging risks and capacity needs under the new era of accountable care, Coverys has retained veteran healthcare captive and professional liability insurance consultant Michael Maglaras of Michael Maglaras & Company to work alongside Brad Lonsberry, senior vice president of custom accounts for Coverys, to help develop and refine CCA and its strategy. Under their guidance, and with team members’ vast experience in large account underwriting program design, captive insurance industry, risk management, client support, and physician needs, CCA is not only designed to service current needs, but to evolve as those needs grow and adapt in real time to the ever-changing healthcare landscape.

As the ACA continues to force changes in how healthcare is delivered, larger, consolidated healthcare providers of all types are facing increasing and evolving risks. Many existing traditional medical professional liability insurers are not adequately prepared or sufficiently experienced to address the risks emerging on a daily basis and those yet to emerge as the future unfolds.

With CCA, Coverys has created a new industry standard for the understanding of these needs and the delivery of dynamic and thoughtful solutions for meeting and adapting to the unique needs of the new, large provider, now and for years to come.

Joe Zorola is the chief underwriting officer at Coverys.

Joe Zorola, ACA, Coverys, US