Medical Malpractice Insurance and the Jefferson Healthcare Board of Commissioners

Transcription

1 Jefferson County Public Hospital District No.2 Board of Commissioners Regular Session Minutes March 4, 2015 Auditorium Call to Order: The meeting was called to order at 3:30 pm by Chief Governing Officer Buhler. Present were Commissioners Buhler, De Leo, Dressler, Ready and Russell. Also present were Mike Glenn, CEO, Elise Raphael, CNO, Hilary Whittington, CFO, Heather Bailey, CHRO, Lisa Holt, CAO, Kate Burke, Marketing Manager, and Suzy White, Administrative Assistant. The meeting was officially audio recorded by Jefferson Healthcare. Patient Story: Elise Raphael read a patient story about the kindness and compassionate care given to a patient and their family. Minutes: February 18 Regular Session Commissioner De Leo made a motion to approve February 18 regular session minutes as presented. Commissioner Dressler seconded the motion. Action: Motion passed unanimously. Required Approvals: Medical Staff Credentials/Appointments/Reappointments Medical Staff Policy Resolution Surplus Equipment Commissioner Russell made a motion to approve medical staff credentials/ appointments/ reappointments, the medical staff policy, and resolution to surplus equipment as presented. Commissioner Dressler seconded the motion. Action: Motion passed unanimously. Insurance Report: Mike Glenn introduced Jim Chesemore, Chief Operating Officer with Parker, Smith and Feek. Mr. Chesemore made a presentation on the medical malpractice insurance market. Administrator s Update Mr. Glenn provided an update on the March 17 ESSB bid opening and physician recruitment. Board Reports: Commissioners De Leo and Dressler reported on their recent visit with the Quilcene community and the Hospital Foundation cardiac event. Commissioner Buhler announced the accountable communities of health with Dr. Locke will be presented at the March 25 special session. Commissioner Buhler distributed a treatise on monitoring reports and requested permission to work with Mr. Glenn to develop a manageable process. Commissioners agreed and will send comments to the Administrative Secretary. Public Comment: Commissioners received several comments regarding the hospital s reproductive services.

2 Executive Session: At 4:10pm Commissioner Buhler announced the Commissioners will go into executive session to discuss potential litigation with their attorney via phone. They expect to conclude at 4:40pm. No action will be taken. At 4:40pm public was present and the Commissioners announced executive session will be extended for 20 minutes and expect to conclude at 5:00pm. No action will be taken. At 4:55pm the Commissioners came out of executive session and took a 5 minute recess. At 5:00pm the commissioners reconvened in regular session. Adjournment: Commissioner Dressler made a motion to adjourn. Commissioner De Leo seconded the motion. Action: Motion passed unanimously. Meeting adjourned at 5:00 pm. Approved by the Commission: President of Commission: Jill Buhler Secretary of Commission: Marie Dressler

3 Medical Malpractice JIM CHESEMORE MARCH 4 TH, 2015 Medical Malpractice Insurance Hard and Soft market cycles historical causes: Dramatic increase of frequency and severity of claims Capacity issues (competitive landscape) Other Insurance catastrophic losses (earthquakes, hurricanes, terrorist events, etc) Legislative action with regards to TORT reform Interest rates (the lower the rates historically, the more underwriters need to charge in premium to make up for lost investment income premium float Normally cycles occur every 9 10 years

4 Medical Malpractice Insurance When was the last hard insurance market and why? Terrorism event caused severe capacity issues across all insurance segments. What happened specifically to Medical Malpractice? St. Paul pulled out of medical mal in every state (largest writer of medical malpractice in the U.S.) Locally, Physicians Insurance pulled back on writing hospitals (to utilize capital for Physician coverage) and Washington Casualty suffered terrible losses and went into receivership Jefferson s Medical Malpractice Premium in 2001 was close to $800,000. Medical Malpractice Insurance Today s Medical Malpractice market: Most capacity in over 50 years Very competitive market with multiple underwriters providing quotes even on poor claim history facilities NO investment income due to low interest rates (?) Broad terms and conditions provided by underwriters Jefferson s last renewal resulted in an increase of $1M additional coverage and your premium is now $234,000 with much higher exposures than in 2001! (more Dr s, higher volumes, ect)

5 Medical Malpractice Insurance What is wrong with this picture? Interest rates are at all time lows (so underwriters need to underwrite and not rely upon investment income for float against poor underwriting! Frequency of loss is on the rise Underwriting results for Medical Malpractice are below the industry s other segments results (losing money) TOO MUCH CAPACITY! This is good! Exposures on the rise in Hospitals Increase in frequency of Med Mal claims due to uninformed patients entering the market from the ACA (see article) Performance of utilization review. An enrollee holds an MCO/ACO liable for bodily injury and/or emotional distress after the MCO/ACO withholds pre-authorization of benefits for a glaucoma procedure. Misrepresentation, unfair competition. A plaintiff alleges that a Hospital solicited new patients through intentional misrepresentations in advertising about the quality of its care or scope of its benefits (e.g., ABC provides the best ophthalmic care in the Northwest).

6 Exposures on the rise in Hospitals An ACO claim related to unfair exclusion from a provider network from a competing physician outside the ACO Where is there trouble in the Healthcare Insurance Market? Directors and Officers Liability Why? Rise in ACO claims Increase in M and A activity As Physicians join hospitals as employees, potential anti trust issues increase Claim frequency and severity is up dramatically! This segment of insurance is unstable at best right now

7 Data Privacy Cyber Risk Management How prepared is your IT department? Do you and your IT department have a plan in place NOW in the event confidential third party information is compromised in terms of notification and rehabilitation? (How will you handle the PR aspect?) Does your IT department have relationships with third party vendors that will assist in the forensic identification of hackers footprints? Does your IT department work with your Compliance team in terms of an adequate HIPAA monitoring and annual security check? (Penetration Testing)