MHA's Executive Briefing

How Hospitals Can Cut Medical Liability Costs

Medical liability costs continue to grow for hospitals, but the secret to controlling this isn't necessarily found in the financials. It's cultural. And that may leave a CFO wondering just what he or she can do to bend that cost curve.

Learn more here.

Healthcare Providers Insurance Company, RRG Ranked #4 in Captive Review Poll

Healthcare Providers Insurance Company (HPIC) Risk Retention Group (RRG) has learned that it has been rated the #4 Risk Retention Group (RRG) by Captive Review, a publication which focuses on the alternative risk transfer sector of the insurance market. The publication annually rates over 250 risk retention groups (RRG’s) in the United States and then publishes a Power 50 Poll. 

The poll measures the risk retention groups’ financial strength from a “capital efficiency” perspective and is based on the company’s balance sheet results and is determined by comparing each company’s asset to liability and premium to surplus ratios.  HPIC is now ranked #4 in the entire population of RRG’s and is the second highest rated company writing medical professional liability coverage.

HPIC is the largest writer of medical professional liability coverage for hospitals in Mississippi and offers several distinct benefits to its members.  The benefits include member ownership and governance, strong capitalization and it is the only carrier that has local risk management and claims service.  Profits also remain and are earmarked to be returned to members over time subject to board and regulatory approval. HPIC’s success is due to disciplined underwriting, proactive risk and claims management, and the strong leadership of the HPIC board.

Earlier this year, the HPIC Board voted to return $3 million to qualifying members which increases the total to $6 million which will have been returned to members during the last three years. 

HPIC is sponsored by the Mississippi Hospital Association and is headquartered in the MHA building.

 

AHIP alters stance on pre-existing conditions

The trade group for major health plans is now endorsing guaranteed coverage for individuals with pre-existing medical conditions, provided the move goes along with an enforceable mandate requiring everyone to purchase health insurance.

America’s Health Insurance Plans said the change came after a nationwide “listening tour” where top officials met with consumers in town hall-like settings in recent months. “AHIP’s board of directors is responding to the concerns of the American people by offering a workable solution to ensure that no one is left out of the healthcare system because of their age, income or employment status,” Karen Ignagni, AHIP’s president and chief executive officer, said in a written statement.

Under the new proposal, health plans offering coverage through the individual health insurance market would be required to offer coverage to all applicants as part of a universal participation plan in which everyone is required to maintain health insurance. Massachusetts has such a mandate, and levies fines on residents who don’t have health insurance.

Health insurers have been under fire in recent years from state regulators for revoking coverage of individuals after they fall ill, and have faced fines and other penalties in California for such actions.

The proposal was met with criticism from at least one consumer group. “If consumers can’t afford coverage, or refuse to pay for a junk policy, they’ll face tax penalties,” Jerry Flanagan of the Santa Monica, Calif.-based group Consumer Watchdog said in a written statement. “Turning the U.S. government into a collection agency for for-profit health insurers is not universal healthcare, it’s full employment for HMO executives.”

[ via Rebecca Veseley, Modern Healthcare's Daily Dose ]

CMS Allots $49M to High-Risk Health Insurance Pools

HHS Secretary Mike Leavitt stated CMS will divide $49 million in grants among 31 states with high-risk health insurance pools. The plan is part of the Bush administration’s proposal for increasing access to health care, the Salt Lake Tribune reports (Rosetta, Salt Lake Tribune, 7/23). High-risk insurance pools provide health insurance for those who are uninsured and unable to obtain private health insurance because of serious medical conditions (Hartford Courant, 7/23). The money will be allocated based on the population of uninsured people in each state and the number of individuals enrolled in each pool (Salt Lake Tribune, 7/23).

Insurance premiums for high-risk policies are very high, but the pools usually operate at a loss. The grant money can be used to help offset the losses, support disease management programs for people with chronic conditions and subsidize premiums for people with lower incomes (Hartford Courant, 7/23).State pools must meet certain criteria for eligibility, such as capping premiums at no higher than 200% of the standard charge in the private market. Some states subsidize these premiums (Gentry, Florida Health News, 7/22). Colorado will receive the largest grant, of $1.8 million (Salt Lake Tribune, 7/23).

Click here to access the full story.

[Via Kaiser]

Health-insurance markets 'highly concentrated': AMA

Consolidation among health insurers is creating near-monopolies nationwide, with the most dominant players grabbing more market share by several percentage points per year, according to a new study by the American Medical Association. In 166 of the 294 metropolitan areas studied, or 56%, one insurer controlled more than half of the HMO and PPO market.

The study also found that most health-insurance markets were so concentrated that they often far exceeded the thresholds that trigger antitrust concerns. The AMA study used a Department of Justice benchmark, called the Herfindahl-Hirschman Index, to gauge the level of market competition. A score above 1,000 shows "moderate" market concentration, while a score above 1,800 is considered "highly concentrated." According to the study, 95% of the 294 markets studied had scores above 1,800 and 67% were above 3,000. The AMA said there have been more than 400 health-insurer mergers in the past decade.

[ via Modern Healthcare ]

Miss. Medical Assurance Co. Announces 5 Percent Decrease in Medical Malpractice Rates

Medical Assurance Co. of Mississippi, a physician owned provider which covers about 70 percent of the state's physicians, has announced a 5 percent decrease in its 2006 malpractice rates and a 10 percent refund on 2005 premiums.

Wall Street Journal Series Examines Individual Insurance Market

The Wall Street Journal published a series of four articles on the uninsured, with a front-page article on the "vagaries of individual insurance—the private option of last resort for many of the roughly 60 million Americans who don't get health insurance from their jobs." Some 10 percent of Americans under age 65 buy such policies, which have "a big problem" because they box out those who are sick, or make coverage for them "prohibitively expensive." The individual insurance market is now "at the center of a debate" on how to expand health coverage to the uninsured. In keeping with the ideas of President Bush's "ownership society," the president and many Republicans want to use tax incentives to open the individual insurance market to more of the uninsured. Democrats contend that this would leave some people behind and "widen the gap between haves and have-nots." According to Mark McClellan, head of the Centers for Medicare & Medicaid Services, tax credits "would help out the vast majority of people who don't have coverage now and don't have access to employer plans."

However, the dominance of employer-based coverage, which provides tax benefits for both workers and employers, leaves a "smaller pool of possible customers for the individual market." In addition, these customers are more easily bumped from coverage. Republicans are reducing regulations to "shore up the individual market," with measures such as credits for small businesses that contribute to workers' health savings accounts and grants to establish state purchasing pools. Newt Gingrich and others endorse a mandate that everyone must obtain coverage so that insurers are less likely to discriminate, while other Republicans want to make the tax code less favorable to employers so that the individual market expands and diversifies. The health savings accounts passed by Congress in 2003 "are a step in that direction because they provide tax incentives for people to save for their own medical expenses." Finally, Republicans say that state-run high-risk pools, created to provide coverage for those who find it hard to obtain, are "a solution for people whose medical conditions make it difficult or impossible to get individual policies." These pools, which enroll only 181,000 people nationwide, "have their own problems," however, as the premiums can still be too high and enrollment is limited, the article notes.

Another article notes that having coverage does not guarantee treatment, with conditions like cancer, diabetes and HIV posing "formidable, and sometimes insurmountable, barriers to coverage in the individual insurance market." Experts say that individual coverage is by nature less efficient and affordable than group coverage, in part because the administrative costs are higher. However, insurers estimate that only 1 to 2 percent of those seeking individual coverage cannot get it due to health problems, though the costs might be higher than for healthy people. "If a person keeps trying, as long as they're not in the midst of a serious illness, they can get individual insurance at a pretty decent price," according to University of Pennsylvania health care economist Mark Pauly.

Another article notes that, with sluggish growth in the sale of health policies to employers, the nation's 45 million uninsured have become "the insurance industry's hottest new growth market." The insurance industry has realized that many of the uninsured "are the same relatively healthy Americans they used to cover or administer to in employer health plans," but have lost or opted out of expensive coverage. The result is that some insurance industry leaders "have taken stronger advocacy roles for the uninsured." Insurers are creating targeted policies for 20-something uninsureds, part-time workers and early retirees. Most of these plans offer more limited benefits than employer-based coverage, covering only catastrophic illness and a set number of doctor visits. They tend to have higher deductibles and more restrictions. These caveats worry some health care experts. "Maybe it's better to have some coverage rather than nothing," said Sara Collins of

The Commonwealth Fund. "But are we setting up a system in which we have fewer uninsured but substantially more underinsured?" Others say even limited coverage is "a tremendous improvement" over no coverage at all. According to John W. Rowe, chief executive of Aetna, "One of the things we know about uninsurance is that it's bad for your health," because people without coverage put off getting care until an emergency.  (via Covertheuninsuredweek.org Weekly Digest)