Foresight vs. Hindsight Moving Toward a Proactive Model
The Panel Speakers: • Irena Kaler, Executive Director/CAO, Robert Wood Johnson Health Network & President, System & Affiliate Members Ltd. • Mark Nix, CEO, Infirmary Health System • Lois McChristian, AVP, Western Litigation, Inc. Moderator: • Oliver Heyliger, Managing Director, Willis Management (Bermuda) Limited
Overview • The Beginning/Stories from the Field • The Middle/Changing Culture &Setting Structure • The Lessons/Pulling It All Together • Questions
Case Study: Stories from the Field • Once Upon a Time . . . . • Patient adverse event occurs. • Hold our breath; sit and wait. “Maybe we’ll get lucky.” • 2 years later, suit filed, numerous parties named. • Circle the wagons kicks in – Alert the insurance company. • It’s a nursing issue; it’s a doc issue. Anyone ever hear of system issues? • Discovery lasts forever; delays and more delays. • Oldest case on docket – expenses mount, staff stressed; judge frustrated with the parties.
Stories from the Field • No happy ending • Almost 9 years later – suit settles on the court house steps. • No one is satisfied with outcome. • Family still angry; negative press. • Expenses out of control. • There has to be a better way!
Stories from the Field • Trying a new approach • Volunteer collides with another in a doorway on our premises – alleges hazardous area to work. • Late night visitor steps into a sink hole that developed after hours. • Neither directly a result of hospital liability; both looking for “compensation” for the issues immediately at hand. • Relationship and compassion drive attempted proactive responses.
Stories from the Field • Patient adverse event occurs. • Issues of liability recognized upfront. • Hospital wants to do the right thing. • Contacted insurer – let’s resolve quickly. • No can do. “Let’s see what the doctor does first. Why do you think you have liability?” • Family files suit out of frustration to compel response. • RM staff conflicted. • Defense attorney needs to follow directives of the insurance company.
Stories from the Field • In each case, trying to do the right thing • Responded with requested assistance. • Again and again and again. • Situations out of control; hospital feeling used. • Ultimately, have to say, “No more.” • Suits filed – claimants feel entitled and still feel wronged, especially when the $$ go away. • Unable to provide fair resolution in a “recognized” bad situation – hands are tied with no where to go. • Why did good intentions fail?
Stories from the Field • Third time is a charm • Patient alleges loss / damage to personal articles. • Assess the situation – what are the facts? • Determine liability – what is a “reasonable” resolution for both parties? • Sincere apology, offer of compensation at set value, execution of release. • Evolving our process; managing proactively; limiting scope; closing the door with a release.
Stories from the Field • Taking it to the next level • Serious patient adverse event occurs. • Assess the situation – what are the facts? • Hospital is in the driver’s seat this time. • Engage different counsel – understands trying to do the right thing. • Offer of settlement; negotiation; executed settlement. • 6 months after event, matter concludes.
The Middle: Changing Culture and Setting Structure
INFIRMARY HEALTH SYSTEM One Organization’s Experience Our Mission is LIFE
Overview of Organization Mobile Infirmary Medical Center—704 Licensed Beds Thomas Hospital—150 Licensed Beds Infirmary West—124 Licensed Beds Infirmary Long Term Acute Care Hospital—191 Licensed Beds North Baldwin Infirmary—55 Licensed Beds Infirmary Medical Clinics—26 Clinics Over 700 Physicians on Medical Staff
Overview of Organization • Non-hospital entities
2007 B.C. (Before Captive) • Direct purchaser of liability insurance • Full policy premiums expensed • Insurer controlled: • Claims strategy • Defense team • Trial strategy/denied and defended • Large number of cases/large verdicts • Higher deductibles • Ultimately denial of coverage
What We Did Not Know Domicile options Captive types Third Party Administrator (TPA) options Selecting a captive manager Lawyers/Accountants/Bankers
How We Started • Education—Captive 101 • Vendor fair • Captive managers • Accountants/Lawyers/Bankers • Brokers • Researched TPAs • Underwriter meetings—Speed tables
Building a Risk Mgmt Program • Independent risk assessment (On Site) • Form executive oversight team (Claims Committee) • Secure claims tracking software • Develop claims management process • Develop risk management program • Identify incidents • Provide notifications • Engage legal defense • Develop open communication • Leadership, Risk Management, Legal, TPA
Three Years Later… Settlement of outstanding claims No cases to trial Retained premium reserves Increased Self Insurance Retention (SIR) Improved patient safety via Risk Management
The Lessons: Pulling It All Together
Case Study: All the Others....Goals? Deeper claims investigations Interest in efficient, effective resolutions Strategic focus on claims handling Direct learning opportunities More control overall Stabilize reserves/payments
Case Study: All the Others....Now? • What is the current state of the program? • Are the philosophies working? • Is information accessible? • Is reporting timely? • Are reserves adequate?
Case Study: All the Others....Now? • Is the authority structure working? • Are counsel aggressively managed? • Are operational changes being identified? • Are defenses united with key co-defendants? • Are there standardized (and effective) vendor relationships?
Case Study: All the Others....Future! • What would we like to see? • What are the changed philosophies? • What information would we like to have? • How committed will we be to doing what it takes to get there? • How much time can we dedicate to this process?
Case Study: All the Others....Future! • Do we have the reinsurer’s backing on this process? • Experienced staff/management • Strong claims system • Well executed transition
Case Study: All the Others....Future! • Changed handling = Changed cash flow • More control = More staff • More detail = More resources • Changes = Insecurity • More control = More reporting • More presence = More accountability • Changed reserving = Changed actuarial picture
Before process: Almost 300 pending w/TPA (>100 litigated) Almost 200 pending in-house Three tracking systems Inconsistent historical data After process: Under 150 pending (<20 litigated) Early investigations/early disclosures & resolutions One tracking system Clear, aggressive data Case Study: It Can Happen!
Bermuda Captive Owners Association www.bcoa.bm International Center for Captive Insurance Education www.iccie.org Captive.com www.Captive.com Network with other captive owners Suggested Resources
Oliver:firstname.lastname@example.org Mark:email@example.com Irena:firstname.lastname@example.org Lois:email@example.com Contact Information
Question & Answer Session Thank you!