2016 Power Broker
Making Everything Work
As the health care industry transforms, Lee Newmark helps his clients sail through reconfigurations.
For one recently created national radiology alliance consisting of four organizations, Newmark’s task was to unify their bonds through one risk management and insurance program.
Once the four CEOs gave him the go-ahead, he built one insurance program at 20 percent less than their previous costs, while strengthening it with a partnership with a reputable national carrier. The success attracted attention, and now upward of 10 new radiology organizations are considering joining the alliance.
Newmark was also called in to create one insurance program from a patchwork of many when a private equity firm client acquired dermatology practices across the country. In the span of a few weeks, he created the program, and with 15 percent cost savings.
He is able to instill confidence in his clients; they know he “doesn’t let things slip through the cracks,” said Keith Chew, senior vice president at Integrated Medical Partners.
“Lee was able to develop the right narrative that allowed the malpractice carrier to see the advantages many of [our] programs and processes … would have on malpractice risk,” Chew said of the time Newmark went to bat for the organization’s med-mal program.
Newmark also succeeds for physicians who go it alone in private practice.
“His dedication [is] to making everything work for the client,” said Dr. Phillip Rosett, for whom Newmark tackled issues surrounding a practice move from Illinois to Indiana.
An Advocate for Clients
Maria Terry goes above and beyond for nursing specialty organizations.
When the state of New York threatened to levy a hefty fine against NurseCore because of a problem with workers’ comp coverage verification, the firm turned to Terry to resolve the issue — which she did after nearly six months of effort.
“She is always responsive and goes way beyond what is required. She is really an advocate for her clients,” said Deborah Lollar, president of NurseCore.
For much the same reason, MHM Services used Terry and Lockton exclusively for its insurance coverages for the past six years. In that time, the firm’s revenue doubled as it entered into new business ventures, requiring good insurance brokering and risk advising. For instance, it expanded into state staffing contracts, requiring competitive professional liability coverages to make sought-after margins.
“This process would have been a nightmare for us if we had not had Maria and her team helping us,” said Carolyn Lowstuter, vice president of finance, MHM.
Then there was the client whose long-term workers’ comp insurer issued a notice of non-renewal during the Ebola scare. Terry and team fought it, and leaning on high-level relationships, convinced the carrier to relent, with no collateral required at renewal to boot.
For that same firm, Terry secured an additional insured endorsement as part of its hospital client indemnification, closing a potential gap with a 37 percent rate decrease.
Solving Strategic Needs
Following the recent career of Barry Weiner allows the observer a window into bigger trends driving the health care industry.
One is the continued growth of the long-term care space, as our population ages. Weiner works with one of the nation’s top five assisted living facilities, and he helped the client develop a five-year plan to strengthen its $100 million captive insurance vehicle.
His strategy involved reducing their workers’ comp and casualty claims, lowering existing claims costs, and reworking underwriting and allocation — and achieved millions in reduced fixed costs.
“His guidance assisted us in controlling our losses, charge the appropriate premiums and strategically settle claims to improve cash flow,” said Jennifer Lawn, vice president of risk management for Sunrise Senior Living.
Another trend is mergers and acquisitions, even in the life science space. A problem that often arises is that the new company’s insurance program is a patchwork or inadequate.
For one organization, a large contract research organization, recently formed from the acquisition of three smaller companies, Weiner formulated a new program, adding coverages previously unattainable and expanding liability coverage while reducing costs.
While these meta-trends are impacting health care, Weiner is diving in to help his clients survive and thrive, and manage their risks along the way.
Fitting a Round Peg Into a Square Hole
Michael O’Brien could have just as easily won Power Broker® this year for the real estate category, but we placed him in the health care space because of an especially massive deal — worth upward of $2 billion, with $500 million related to an investment in a health services firm.
The deal involved a noted real estate magnate and it required an insurance broker who could fit a round peg into a square hole, said John Callahan, partner, McDermott Will and Emery.
The attorney’s client was buying into a company with a full portfolio of insurance, and O’Brien’s task was to conduct a critical analysis of the coverages. He not only explained his findings to the investor, but took the time to explain the insurance program, and its strengths and its weaknesses, to the company that it belonged to.
He then had to explain why the program needed to be fixed. Enter his “round peg” solution: transaction liability representations and warranties coverage, as well as environmental insurance. It was an “above and beyond” type of assignment, and done on a quick timeline.
“Most brokers I work with will give you a quote and then check out,” said Callahan.
“Michael has a very engaging personality and is extremely attentive to those with whom he interacts and works,” said another client, Marilynn Kelly Gardner, president and CEO of Chicago’s Navy Pier.
The world today is difficult for small, independent community hospitals. If they aren’t getting acquired by large hospital systems or going out of business, they are generally seeking affiliations with larger systems to survive.
Helen Vrabel saved the insurance program of one community hospital, and perhaps the community hospital itself. With a broker of record letter (the community hospital’s partner was a Vrabel client), Vrabel and team set out to improve its program without spending more money than the hospital could afford.
Her strategy was to market lines individually. For instance, D&O and employer liability coverage was written separately with $5 million limits; they were part of professional and general liability limits previously. Vrabel added new coverages for fiduciary and cyber.
For the latter, she took a $100,000 sublimit under GL and transformed it into $1 million for privacy and security; $250,000 for notified individuals breach response coverage; and another $1 million for forensics, legal expense and crisis response.
Vrabel accomplished it all for less than the hospital was paying. For larger hospital systems, Vrabel is known to make problems disappear as well.
“It is hard to think of a problem we have had in the last year, because she anticipates our needs and never lets anything get to be a problem,” said another client, Martha Raymond, associate vice president of risk claims and insurance at Providence Health & Services.
Mergers and acquisitions are the reality in the health care industry. A big part of that is executive benefits, and that’s where Eric Wittenmyer shines.
One life sciences organization that grew like gangbusters in the last five years rethought its deferred compensation program, which was “exploding” in the process.
The organization called in Wittenmyer, who essentially ripped everything apart and rebuilt the benefits structure to take costs out while making it more efficient, said the client.
“His depth of knowledge about insurance is amazing,” said another health care client, who needed Wittenmyer’s expertise in executive benefits when three hospitals were integrated into the organization. Wittenmyer served on the integration team, helped communicate changes to the impacted employee groups and was always available while driving toward an ambitious Jan. 1 go-live date. He even worked on Christmas Eve to make it happen.
But M&A isn’t the only thing that helps keep hospital systems and other health care organizations viable. Keeping talent is important. And the executive benefits that Wittenmyer delivers go a long way to attract and retain that talent.
Such was the case with a client integrating a new physician group. Wittenmyer created a win-win disability program at a lower cost for the hospital but with increased protection for the doctors. That client called Wittenmyer a “change leader.”
Incredible Benefits Knowledge
It’s ironic that the same hospital systems and health care organizations that expected to profit from the Affordable Care Act — in the form of more insured Americans paying for health care — are now dealing with the same employee benefits issues that all employers are facing.
Enter Barbara Alvey, who has served clients for years, even decades, providing them with her “incredible knowledge of everything related to benefits,” said Sheri Brown, manager of benefits and compensation at Deaconess Health System.
“I would not want to do my job without having Barb as a resource,” Brown said.
Alvey advised Brown and her senior leadership team about the ACA even before it was enacted, and helped with strategy changes along the way. Recently, Alvey assisted Deaconess’ efforts to become an accountable care organization.
For a large Catholic health system in the Midwest, Alvey served as a similar resource on the ACA, even when the “government is not always clear as to what … specific criteria is going to be used to determine compliance,” said the system director of compensation and benefits.
Alvey effectively becomes a part of the organization’s team, coordinating the activity of TPAs and other outside vendors, and ensuring proper reporting and compliance. She also always makes sure employers have the information they need to pick the approach that makes the most sense to them.
Knowledgeable and Caring
Michael Loughran doesn’t hesitate to roll up his sleeves or get into the nitty-gritty of insurance program formulation.
“Michael Loughran is a very up-front, no-nonsense individual who, when asked, has not hesitated to be of help,” said Steve Kotter, business development director at 21st Century Health Care Consultants.
Loughran, a health care business unit president, assisted 21st Century in creating a new product that could be delivered to its home health clients.
“Not only did he deliver more than what we expected, he did it in record time and continued to follow up with us afterwards,” Kotter said. “The entire experience was extremely positive and earned Michael a customer for life with regard to our business.”
Loughran also manages a nationwide professional liability program for nurses and nursing schools, with 1 million professionals insured under it.
“Michael genuinely cares about people, and is a man of his word,” said Judy Simmons, president of the Bill Beatty Insurance Agency. “Although it is his skill and proficiency that has made him the master craftsman that he is, the overwhelming personal quality that I admire most is his kindness.”
Loughran also helped provide malpractice coverage at an affordable price for the founder of a health care startup, WhiteCoat Healthcare, to secure his business model working with nurse practitioners.
Earning Client Trust
Jim Bergman has never seen Chris Miller stumped on any question related to financial or insurance issues.
The director of human resources at Northeast Regional Medical Center, which participates in the Hospitals Self-Insurance Fund of Missouri, a trust operated by Miller, and its board members have come to trust Miller “implicitly,” he said.
“Our board is a group of highly successful professionals, and Chris has to be very adept at getting the members to balance the interests of their hospitals with the interests of the trust,” Bergman said.
And that trust has paid off.
Members pay 39 percent less as a percentage of payroll for workers’ compensation coverage than they did when the trust began 11 years ago. Their modification factor has gone down 31 points. And the fund has generated 20 percent pre-tax profit over that time.
Miller has implemented health care risk management and accountability to achieve those results — for instance, a Caregiver Safety Accreditation program — and a loss prevention and control infrastructure that has served its members well. He has also helped to reduce back injury claims by educating claimants and managing their expectations with regard to their pain and treatment.
“He knows his stuff,” said Mag Greig, administrator at the Emergency Physicians of St. Louis.
A Sophisticated Approach
When health care organizations seek a new broker, you have to be prepared and capable to take advantage. Aaron Davis, business development and national sales leader, plays a major role in Aon’s ability to respond.
Davis is a specialist in using data to improve how a firm understands, manages and transfers its property risk.
When a large health care organization submitted an RFP, Davis and the Aon team verified the prospective client’s exposure data and used modeling and analytics tools to create a more accurate risk picture. It was a picture encompassing $50 billion in property exposure with nearly three-fifths exposed to high wind or earthquakes.
Once the prospect was an Aon client, Davis led the global property placement team that translated the data into more than 30 percent savings on premium with better coverage and 10 percent greater windstorm limits. The client also enjoyed nearly 40 percent savings on its terrorism coverage, including a sublimit for biological and chemical weapons attacks and a first-ever “Threat Product” sublimit. All in under three months.
Former colleague Donald “Sandy” Aspinall, who leads global risk management for Comcast Corp., is not surprised at Davis’ success.
“He does more than just throw out a submission and wait for a response,” Aspinall said of Davis’ sophisticated approach to syndicating insurance programs based on intimate knowledge of underwriters’ preferences.
Coming to the Rescue
Alex Michon has his finger on the pulse of insurance and health care industry trends.
He also is someone who can be trusted to be “recommending what we actually need,” said Lance Lewis, chief operating officer at the California Medical Association, rather than pushing products to benefit his paycheck. Michon helped the association close up coverage gaps and lower premiums.
“Alex completely reshaped our program, obtained better, more complete liability protection for our company, and lowered my premiums across the board,” Lewis said.
“It’s the quality of questions that Alex asks that convince me he is putting in the work to really understand his client’s business,” said John Dahldorf, CFO at Acutus Medical.
Michon’s willingness to dive into the business model of a Bay Area startup, such as the one Dahldorf worked for in 2015, saved the company $100,000 in premiums.
“That was a substantial amount of money versus the total premium that was being paid, and myself and the controller felt the policies in place significantly reduced the risk of the company,” Dahldorf said.
Michon has also come to the rescue of established health care organizations that are shrinking as a result of the M&A frenzy in the industry. He developed a solution for companies undergoing large layoffs, which allows them to scale down their insurance program and costs quickly in mid-term while sometimes able to maintain full limits.
Confident and Credible
Captives are an insurance lifeblood for many U.S. health care organizations, dating back to past professional liability crises that forced risk managers and insurance brokers to find alternative risk financing strategies when traditional markets failed.
Many captives still thrive today … until they don’t.
Mary Mulhern came to the rescue of one medical professional liability captive that had not properly accounted for its past 10 years’ worth of loss experience because of an array of prior insurance programs and multiple TPAs.
Mulhern collected the loss history and instilled confidence in the way she shared it with the underwriters. The result: savings of about 31 percent on the insurance program’s costs on top of more coverage.
“She spent hours putting an exhibit together which helped the global underwriting community see a credible loss record. We received 17 proposals out of 18 presentations, and 15 of those were for the lead layer,” the client said.
Another client had not one but three enterprise risk management project teams working simultaneously, and Mulhern helped the teams coordinate and prioritize their efforts.
“Mary’s ability to coordinate this activity … clearly put us in a position where we have ERM momentum and have received favorable comments from reinsurers about the manner in which our program is structured,” said the chief risk officer.