HCCI/HCCR

Multihospital Group Owned Captive: Optimizing the Captive and Services in the New Landscape of Healthcare

Reform in the USA

Cayman Captive ForumDecember 4, 2013

HCCI/HCCR 2

Tim RicePresident and CEOCone HealthGreensboro, NC

Chairman• Health Care

Casualty Insurance Limited

• Health Care Casualty RRG, Inc.

Mark O’BryantPresident and CEOTallahassee Memorial HealthCareTallahassee, FL

Board Member• Health Care

Casualty Insurance Limited

• Health Care Casualty RRG, Inc.

Rick BeckerChairmanClarity Group, Inc.Chicago, IL

Secretary, Health Care Casualty Insurance LimitedAssistant Secretary, Health Care Casualty RRG, Inc.

Moderated by: Anna Marie Hajek, President and CEO, Clarity Group, Inc.

Panel

HCCI/HCCR

Cone HealthGreesboro, NC

Tim RicePresident and CEO

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NFP Healthcare System: Serves a 5 county region in central North Carolina, covering approximately 1,000,000 lives

6 Acute Care Hospitals, Behavioral Health Hospital, Regional Cancer Center

1273 beds 1176 physicians; 2799 RNs 100 locations including 3 urgent care and 71 physician

practices Net Patient Revenue: $1.4 billion (FY2013) Became an Accountable Care Organization- Triad

Healthcare Network – July 2013: 700 healthcare providers, covers 40,000 lives and 30,000 more in Medicare Advantage

Cone Health

HCCI/HCCR

Tallahassee Memorial HealthCareTallahassee, FL

Mark O’BryantPresident and CEO

HCCI/HCCR 6

NFP Healthcare System: Serving 17 counties in North Florida and South Georgia

772 bed Acute Care Hospital; Behavioral Health Hospital, Rehabilitation Hospital, Regional Cancer Center

570+ physicians; 1200+ RNs Region’s only state designated Trauma Center;

Region’s first Freestanding Emergency Center Net Patient Revenue: $480,815,000 (FY2012) Expanding residency programs and research

with Florida State University College of Medicine

Tallahassee Memorial HealthCare

HCCI/HCCR

Health Care Casualty Insurance Limited

andHealth Care Casualty RRG, Inc.

Providing Financial Protection and

Enhanced Patient Safety For Member Healthcare Systems

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In 2002, a group of healthcare providers determined that it was strategically advantageous for them to take control of their medical malpractice insurance The IOM report on medical error was fresh and

activity to enhance patient safety was accelerating The insurance marketplace was expensive … and

services were minimal Moving from purchasing insurance to using an

insurance vehicle in concert with quality and safety efforts became important

Introduction

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Two companies have been formed … both owned by the Healthcare organizations A group owned captive insurance company for the

hospital excess coverage: Health Care Casualty Insurance Limited (HCCI)

A group owned RRG for the physician coverage, and hospital excess coverage: Health Care Casualty RRG, Inc. (HCCR)

Fast Forward to 2013

The Owners (Members)• Health First, Inc., Rockledge, FL• Cone Health, Greensboro, NC• Tallahassee Memorial HealthCare, Tallahassee, FL• Unity Health System, Rochester, NY

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Hospital Program Captive Insurance Company domiciled in the Cayman

Islands Provides a $20 Million excess layer of insurance Special coverages are endorsed onto the policy Each Member retains a minimum of $1Million in a self-

insured layer Policy is written as claims made coverage for professional

liability, and occurrence coverage for general liability Reimbursement policy … claims control remains with the

Member, supported by Clarity resources Reinsurance in place

How do the programs work?

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Physician and Physician Extender Program

Risk Retention Group domiciled in Washington, D.C.

Insures Employed, Contracted and Voluntary Medical Staff

Full underwriting, policyholder services and first dollar claims management are done by Clarity, the Company’s Operations Manager

Reinsurance in place

How do the programs work?

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Comprised of physician leadership, nursing and risk/quality/safety professionals from the Member organizations

Focus the RQS services agenda Drive the education agenda Support RQS initiatives within their

organizations

National RQS Advisory Committee

Helps assure RQS coordination among the Members’ healthcare systems and staff

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Risk – Quality – Safety Management Tailored on-site consultation Educational programming- webinars, in-person Continuous access to professional consultants Shared data Current focus on RQS in Ambulatory Settings –

Coordination with the hospital External Peer Review Program System – wide Data and Event Management

Web-based data collection system that penetrates all aspects of the organization … enables immediate consultation on events and in-depth knowledge to get to action quickly – All Members use this product system-wide

Services Enjoyed by the Members

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Claims Advisory and Management Services Continuous access to professional consultants for best

practices and consultation on difficult cases and full cooperation with on-site Risk Managers

First dollar claims management of physician cases Web-based state-of-the-art claims management system Annual Audit to review claims managed within the

Member’s self insured retention Quality and Safety Support and Data

Protection under the Patient Safety and Quality Improvement Act Patient Safety Organization – All Members participate in

Clarity PSO, A Division of Clarity Group, Inc.

Services Enjoyed by the Members

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Insurance Products that respond to the changing landscape of healthcare delivery … particularly with the advancement of the Affordable Care Act and ACO formations Flexible coverage options Ability to add service structures, for – profit entities and joint

ventures Flexible physician coverage options and insurance structure

optionsUseful for recruiting / acquisition of physician groups … no need to

purchase tail from prior carrierUseful for employed physician groupsFocus on coordination with hospital RQS programs

Cyberliability protection: Hospital network and physicians … including participation in HIEs

Services Enjoyed by the Members

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What have been the most significant changes to your organization in the last 5 years?

How has your ownership and participation in HCCI and HCCR supported the changes you made?

What impact does your ownership and participation in HCCI and HCCR have on how risk-quality and safety are managed in your organization?

How would describe the overall benefits to your organization of your ownership and participation in these group owned captive facilities?

Questions to the Panel

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Benefits of the programs go beyond insurance coverage … Leadership …like minded organizations and leaders who

focus on quality and community benefit Openness …ability to share issues and learn from each

other Controlled cost… reduced costs for hospital liability

insurance each year since inception Physician alignment … physician insurance program has

been a vehicle for both employed and non-employed physicians

Resource support … RQS, Claims, and PSO services have worked in concert with internal resources and are now being financed by the insurance companies

In Summary…

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Healthcare reform is creating new reimbursement structures and integrating resources… Hospital – physician alignment is essential … medical

malpractice insurance is a good tool to help seal the alignment Clinical integration requires incentives to do the right thing …

working through the services in both the hospital and physician insurance companies can support this process

As organizations get more extensive services to manage the population’s health … issues of consistency and evidenced based care across the organization will arise … the web-based event management system, the insurance products and the Patient Safety Organization are vehicles to help control cost and quality

Why is this a good strategy for the future?

Control and coordination of practices … leads to control of resources and management of potential medical error

HCCI/HCCR

Multihospital Group Owned Captive: Optimizing the Captive and Services in the New Landscape of Healthcare

Reform in the USA

Cayman Captive ForumDecember 4, 2013