Broadening service lines and M&A activity key themes for 2016


The past year has been characterized by both horizontal and vertical growth in the healthcare arena, with service lines broadening and a rise in M&A activity. These trends will continue to present challenges for risk managers in 2016, according to Kevin Junod, Northeast healthcare practice leader for insurance brokerage firm and risk management specialist, Lockton.

“These themes have brought a host of new challenges for risk managers, which they continue to grapple with,” he said. “Many of our discussions with clients have been focused around the structure of the risk management department, the processes that they employ within these new, larger organizations and how they measure and track patient outcomes so they can measure success.

“I expect that to continue into 2016. These are ongoing processes as organizations continue to evolve.”

Lockton utilizes a formal process, called Strategic Engagement, whereby it engages with the senior leadership of an organization to link the business goals with risk management goals.  The process identifies existing and new risk areas, measures risk in terms of frequency and organizational impact, and then creates actionable plans to minimize the risk.

These plans might include new risk control initiatives, contractual protection, claim mitigation measures and new risk financing solutions such as captives, risk retention groups or new insurance programs. “It’s about optimizing the risk-reward equation,” said Junod.

In order to help risk managers with new challenges in 2016, Lockton is also doubling the number of risk management webinars it is making available for clients and has increased its risk management consulting and support resources.

Junod expects risk managers to face challenges around risk management integration and new operating models as organizations evolve in 2016. Another theme will be the financial risks presented by new payment contracts, as an influx of new capitation and bundled payment programs begin.

“There will be a shift from risk managers looking at patient health and safety, to focusing on population health and safety, where the organization is responsible for individuals’ health and well-being whether they come into the facility or stay at home in their community. Risk management will develop in this area from a communication, risk evaluation, intervention and risk financing standpoint.”

Lockton provides insurance solutions and consulting services to help manage risk in this growing population health arena, including analytics, claims support and insurance solutions for catastrophic population health claims.

“With the shift to population health and the revenue model moving away from fee-for-service, healthcare is now about how we serve the population in the appropriate manner, at the appropriate time, with a very high standard of care and still maintain an acceptable margin,” he said.

“In addition to our Strategic Engagement process and additional client dialogue on risk management initiatives, we are also working across our organization in new and innovative ways, to bring population health, employee benefits, and property & casualty experts together to create holistic business solutions across the client’s enterprise.

“These are systemic issues organizations are facing and they need an enterprise-wide range of solutions.”

Other areas of focus for 2016 will include workplace violence, evolving cyber/privacy/technology risks, and ongoing operational challenges associated with the implementation of electronic medical records, he added.

Kevin Junod, Lockton, US