Transcript The Bermuda Market in 2005

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
22
Overview
1. The Beginning/Stories from the Field
2. The Middle/Changing Culture &Setting Structure
3. The Lessons/Pulling It All Together
4. Questions
33
The Beginning:
Stories from the Field
44
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.
55
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!
66
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.
77
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.
88
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?
99
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.
10
10
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.
11
11
The Middle:
Changing Culture and
Setting Structure
12
12
One Organization’s Experience
INFIRMARY HEALTH SYSTEM
Our Mission is LIFE
13
13
INFIRMARY HEALTH SYSTEM
MOBILE, ALABAMA
14
14
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
15
15
Overview of Organization
• Non-hospital entities
 Infirmary I-65
Hospice
 Infirmary Eastern Shore
Gulf Health Properties
 Thomas Medical Center
Gulf Health Mgmt Service
 ProHealth
American Oak Hill Assurance
 Thomas Hospital Wellness
Infirmary Foundation
 North Baldwin Wellness
Thomas Foundation
 Oakwood
North Baldwin Foundation
16
16
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
17
17
What We Did Not Know
• Domicile options
• Captive types
• Third Party Administrator (TPA) options
• Selecting a captive manager
• Lawyers/Accountants/Bankers
18
18
How We Started
• Education—Captive 101
• Vendor fair
– Captive managers
– Accountants/Lawyers/Bankers
– Brokers
• Researched TPAs
• Underwriter meetings—Speed tables
19
19
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
20
20
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
21
21
The Lessons:
Pulling It All Together
22
22
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
23
23
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?
24
24
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?
25
25
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?
26
26
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
27
27
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
28
28
Case Study: It Can Happen!
Before process:
After process:
Almost 300 pending
w/TPA (>100 litigated)
Under 150 pending (<20
litigated)
Almost 200 pending
in-house
Early investigations/early
disclosures & resolutions
Three tracking systems
One tracking system
Inconsistent historical
data
Clear, aggressive data
29
29
Suggested Resources
• 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
30
30
Contact Information
• Oliver:
[email protected]
• Mark:
[email protected]
• Irena:
[email protected]
• Lois: [email protected]
31
31
Question & Answer Session
Thank you!
32
32