Long-Term Risk Management
For 30 years, Arthur J. Gallagher’s Martha Acker mitigated risk and helped insure the long-term care market.
Last year, Acker further fortified the industry when she established a risk purchasing group (RPG) program for the property and liability environmental exposures of long-term care.
Long-term care has an inherent risk for environmental claims such as mold, mildew and Legionella because of the compromised health of most residents.
The RPG program presented a simplified underwriting process, broader coverage and a lower price to the LTC clients.
The program also was designed around loss control resources to assist clients in identifying and reducing their exposure to loss in this area.
Acker also developed and managed two captive insurance programs for the PL/GL exposure. The first captive was established during the industry crisis of 2000 as a group captive. The second is a single parent captive established in 2013.
Her clients in this industry view her expertise and dedication as unmatched.
“I have never come across anyone that even comes close to what Martha does,” said Richard Brockman, an attorney who sits on the board of Associated Long Term Care Insurance Company.
“She’s there, soup to nuts, with her clients up and down the line,” Brockman said.
A ‘Visionary’ Broker
A client of Aon’s Chris Ainscough faced a large property loss. The client shared concerns with Ainscough: How would the carrier’s policy respond to the loss? How could they quickly get whole again after the business interruption? Finally, how would this recent setback affect the upcoming property renewal?
Ainscough quickly got to work and confirmed coverage with the carrier, set meetings between the carrier and client, and assisted throughout the process to make sure the claim was adequately adjusted.
Next, he collected the data needed to make sure the client recovered fully from the business interruption. Ainscough worked to have the insurer allow Aon to act as a consultant, all the while having the policy cover the funds for the consulting services.
Finally, the insurer agreed to a two-year term with a flat renewal rate in the first year, and a low single-digit rate increase the following year.
“I really enjoy working with Chris,” said one client, Chet Porembski, system vice president and deputy general counsel for OhioHealth Corp. “I can always rely on him. When he tells me he’s going to do something, he does it. Chris is always trying to think ahead about our business to bring value to our organization.”
Ainscough’s preparation and foresight left an impression with other clients as well.
“He is a visionary,” said Kimberly Baughman, the director of risk & compliance at Wood County Hospital. “He always thinks five to 10 years out.”
The Unflappable Mr. DePriest
Clients value Tim DePriest for the significant amount of time he puts into education, planning and negotiating creative solutions with the carriers. They know he’ll pore over policies to find weaknesses and ways to reduce premiums.
When the CFO of a mental health services center invited DePriest to review its P&C program, DePriest found significant coverage gaps and issues throughout the program.
DePriest created a comprehensive marketing overview for carriers, working to educate them on the strength of the management team, their risk management philosophy and their strategic operational plans.
Coverage for many areas such as earthquakes, board directors and cyber liability was expanded and improved. A claims management, loss control and safety education services plan was created to prevent workplace injuries and manage claims. All of these coverage enhancements as well as substantial improvements in client service, were achieved while reducing annual premiums by 25 percent.
DePriest will go the extra mile to get policies to work in his client’s favor, said Carl Coan, CEO of White Memorial Community Health Center. DePriest helped Coan sort through malpractice coverage issues for health care workers acquired through a recent merger.
“He was really helpful as we were trying to work through the malpractice issues,” Coan said. “He’s unflappable.”
Big in Telemedicine
This year, Larry Hansard designed a comprehensive telemedicine medical professional liability program. It offers global protection for U.S. health care providers who, in the past, had coverage that was limited by location.
The new liability responds in the jurisdiction where the patient resides around the globe and provides defense in nearly every venue, allowing the emerging telemedicine sector to provide health care internationally.
Matt Scalo, head of finance at Doctor on Demand, Inc., said Hansard was able to get his company a more than 50 percent discount on medical malpractice coverage. Doctor on Demand offers a mobile application that provides mental health care to patients in all 50 states. As a startup, it struggled to find affordable insurance coverage.
Hansard educated carriers on the business model, making them far more comfortable insuring the business.
“Part of our challenge with our original broker is they didn’t understand our business,” Scalo said. “Larry … spent the time to understand what we do and how we do it.”
Hansard frequently reconnects with Scalo to learn about any new products the company is developing and suggest ways to incorporate risk and insurance issues early on, before they go too far down any path.
“What Larry and his team have done is really build a partnership,” Scalo said. “I don’t worry about insurance, he really owns the insurance process.”
Aon’s Coleen Kelly was contacted by a colleague seeking her help: Could Kelly help provide a solution for a specific exposure faced by a client with multiple franchise operations?
Kelly thought she could. She quickly realized that many of the coverages being sold were not aligned with the franchise requirements, nor did they address the client’s exposures.
Kelly helped to secure the commitment of the carrier with a product offering that would meet and actually exceed the clients’ need as well as offer a streamlined process to ensure compliance with the franchise requirements. Additionally, the client indicated early on that the franchisees needed a health insurance solution.
Kelly worked with a group from Aon Risk Solutions to offer ideas, gain the endorsement and launch a new product offering to the client franchisees. Kelly is now helping take to market products for all the franchisees.
Kelly also helped set up the nonemergency medical program used by R.E. Chaix & Associates. “It’s really taken off, it’s been great for us,” said Kristi Mulford, a broker at R.E. Chaix. “It allows me to not turn away as many accounts. I almost feel like I’m an exclusive, like she would do anything to help me and if I have questions, she is always available.”
“She gets things done, and gets things done quickly,” said Richard Walthall, a commercial insurance producer at Walthall Sachse & Pipes Inc. ”She is responsive, she’s accessible, she understands specifically what I want, and she’s able to negotiate what I want.”
A Great Client Asset
Texas-based HNI Healthcare is a rapidly growing physician group with operations nationwide. It recently expanded to provide emergency department and anesthesia services as well as IT and management services.
Medical malpractice insurance is its largest risk and insurance cost and it is critically important for the practice to remain competitive when pursuing new contracts and recruiting new physicians.
HNI’s 2016 renewal needed to account for the company having doubled in size, entering into several new states, expanding into new specialty areas and rolling out proprietary practice management software.
Based on expiring rates, the 2016 renewal premium would have doubled.
Aon’s Charles Krauth reached out to insurers and highlighted the experience of HNI’s leadership team and new risk management strategies. He also emphasized the company’s positive five-year loss history.
Four top medical malpractice insurance carriers offered rate cuts of between 30 percent to 50 percent. Additionally, Krauth negotiated an auditable policy provision that allowed for additional growth and an 18-month policy period, further locking in the very low rates.
“He wants to make sure he fully understands what our risks are and educates us on that,” said Skip Courtney, the chief operating officer at HNI. “We ultimately have to make the decision, but he’s brought us some things that we didn’t even think of.”
Medical Buying Power
This year, Arthur J. Gallagher’s Lee Newmark was asked to help integrate the insurance/risk management programs for several local gastroenterology practices into one single program.
Physicians seeking coverage face tough challenges in today’s health care market. The individual doctors know that they have to collaborate to survive. Newmark worked with the various groups and encouraged them to come together on their own terms while remaining as independent practices continuing to serve their local communities.
He helped construct a program that took advantage of the collective size of the combined gastroenterology group by offering preferred pricing. He also put together a coordinated risk management plan that would allow the group to become more efficient in its day-to-day work while offering the best patient care.
Ultimately, Newmark put together a single integrated platform that saved the doctors a significant amount in annual premiums and allowed them to establish a robust risk management plan that is already making great strides in improving patient care.
Gallagher continues to work with this group of physicians and introduced them to its employee benefits team. Now the medical group is considering a proposal that’s designed to achieve similar results in the benefits area.
“I think he does a very good job,” said Dr. Neil Friedman of the Metro Chicago Surgical Oncology group. “He’s always well researched and he’s there if we need him.”
Preserving Relationships in Tough Times
Integro’s John Orr found a way to structure a comprehensive insurance program by securing aligned or joint policies for three different medical companies with interconnected businesses.
“They are two companies but most of our policies are joint policies for both entities because the covered risk is shared to both of them,” said the medical group’s director of corporate real estate. “They are really married.
“We’ve done a lot of work around structuring a comprehensive program where the coverages are aligned with insurers to close those gaps identified,” the director said.
Another client faced a dicey renewal with uneasy insurers. The client had several unrelated class action lawsuits over a three-year period, giving rise to challenging D&O renewals. On top of that, the client’s market cap tripled over the same period.
Orr managed the client’s carrier relationships while reworking the positions of some insurers on the tower. In the end, Orr delivered a 10 percent premium decrease, capping off four years of reductions in the wake of increased market caps and other challenges.
More importantly, Orr preserved relationships and negotiated coverage enhancements for the client.
“He’s incredibly available to clients. He is proactive in advising about litigation trends, insurance contract clauses and the nuance of what’s going on in relevant litigation,” said David Lehman, general counsel at Intersect ENT. “That is incredibly helpful to me.”
A Health Care Partner
After Banner Health received a large and unexpected adverse jury verdict on a medical malpractice case, its insurer claimed it was not properly advised of key developments in the case and was not afforded the opportunity to settle prior to the jury verdict.
Integro’s Larry Reback contacted senior underwriters on behalf of his client and got up to speed with every detail of the case. He was able to bring both sides to the table and negotiate a full reimbursement of the verdict by the carrier.
“I’ve been in the industry for over 35 years, it’s really hard to find a good broker that you can partner with,” said Ellen Rensklev, chief risk officer at Oregon Health & Science University.
“In Larry, we get somebody who gets the big picture, who listens to what our needs are and who’s able to execute on those needs,” Rensklev said. “Then we set our goals together.”
Reback, a former insurance defense attorney, works with clients on everything from cyber to general liability to professional liability to the domestic market to international markets.
“Every time I encounter Larry, he provides advice and guidance that is thoughtful and considerate and I always feel that I am his only client,” said Yvette Carrillo, a claims director at Banner Health who has worked with Reback for about 18 years.
A Model for Others
Oregon Health and Science University owned a mature captive with a significant number of coverage lines.
Over the years, coverage lines were bolted on as endorsements without fully integrating the coverage into the policy. As a result, the policy coverage was often hard to determine.
Integro’s John Selgrath noticed the patchwork quality of the policy and immediately volunteered to rewrite it.
“He actually took it on his own initiative to suggest we rewrite the policy,” said Cassandra Forbess, risk and insurance manager at the university.
Selgrath was able to recommend and implement significant coverage enhancements while streamlining and clarifying the policy.
“He’s been a great resource for us,” Forbess said.
Susan Plante, senior insurance analyst at UMass Memorial Health Care, Inc., recalled the time the hospital experienced an after-hours emergency and she reached out to him for help. Selgrath responded immediately, reviewed affected policies and offered her a preliminary action plan to bring back to senior leadership within just a few hours.
Jeff Winecoff, with corporate insurance & risk at John Muir Health, added that Selgrath’s background as an attorney further enhances his value.
“Having somebody who can break down the form and also share a legal perspective is really invaluable and perhaps something all brokers should strive for,” Winecoff said.
This year, with considerable M&A activity in the health care industry, Aon’s Mary Walkenhorst found herself in the awkward position of representing two of her clients in an acquisition.
She impressed them both by pointing out risks that neither had contemplated in the arrangement. She advised them not to seek just the least costly option for combining insurance programs, but to choose the options that made the most sense from a risk management standpoint. The clients said Walkenhorst helped make the transition as smooth as possible.
For policy renewals, clients said, Walkenhorst treats every part of the program as new business, asking, How can we improve the risk financing program? Is it still relevant? Does it position the client to accept future anticipated risks?
Walkenhorst coaches clients on how to avoid risk and better negotiate contracts, rather than always transferring risk to an insurance company,
Clients said she’s a great resource on cyber liability, stop loss coverage and financing programs through the government. She’s able to pull in additional information from industry sources and her colleagues at Aon.
“She’s just one heck of a good collaborator,” said Bill Kauffman, general counsel at St. Louis University. “She asks insightful questions. The interpersonal skill Mary possesses is one of the things that separates her from others in the industry with whom I’ve dealt.
“I would give her an A-plus in terms of service,” Kauffman said.
Capping the Losses
Julie Wisener’s health care client was recently named in a lawsuit for alleged negligence while providing labor and delivery services for the indigent back in 2012. Since the incident involved an infant, there was potential for long-term liability.
The legal entity named in the lawsuit was only supposed to be operating in a holding capacity in Louisiana. While the entity was covered under their professional liability program, it was not enrolled in the Louisiana Patient Compensation Fund (LA PCF). Without participation in the LA PCF, the client’s liability for the claim would not be capped, and economic damages could be unlimited.
Wisener discovered that the entity could have coverage because the law considers independent contractors as employees. As long as that independent contractor was enrolled into the LA PCF, there was hope.
Wisener’s next challenge was negotiating with the LA PCF back to the year of the loss. She successful enrolled the legal entity back to 2012, allowing the known loss to be capped under the program, thus potentially saving the client a large, long-term financial payout.
Wisener helped another client properly insure a health care property while it was still under construction and the client was uncertain when it could begin seeing patients.
When construction dragged on, Wisener went back to the carrier and got a discount.
“That is something that wouldn’t normally happen with other companies,” said John Edmunds, CFO with Generations Behavioral Health.