Health Care Providers

ERM-healthcareIn the same way cost of health care keeps growing exponentially, for health care providers – loss exposures to property and liability losses is also constantly rising in the form of expensive medical equipment and possible law suits. INSIGHT risk management applications are equipped for hospitals, clinics, nursing homes and other health care providers with large property and liability exposures.

Resource Risks for Health Care Providers

Health care providers usually bring large amounts of capital to their businesses in the form of buildings and medical equipment. This creates large property exposures that are best mitigated by the use of insurance. Our Insurance RFP© can help health care providers purchase insurance.

Balance sheet exposures, like those from the above, will stay there even if an organization decides to no longer provide any services. Income statement exposures are the result of doing something with the capital brought to the business (operating capital). The greatest exposures in this category are losses from changes in price and quantity. This applies to revenues and expenses.

On the revenue side, it’s all about people using the facilities and paying the price we predetermine for our services. On the expense side, can be the risk of getting health care professionals to the site and/or losses from energy price hikes. Energy Risk

For those operating in unregulated energy markets like natural gas, the risk manager can mitigate energy risk by purchasing future contracts in the NYMEX. Our Hedging Master© not only allows the risk manager to do physical hedging directly from the supplier but even calculate total savings (based on real-time gas prices) before placing an order.

Activity Risks for Health Care Providers

Some of the activities performed by health care providers are the riskiest of any business. Sometimes in order to delivery services, they may need to enter a person’s body and even utilize harsh chemicals & medications. While those actions may ultimately benefit the patient, the risk of something going wrong is always huge, and the consequences sometimes fatal.

As a result of performing these activities, health care providers are constantly exposed to the possibility of a liability loss as a result of a specific legal claim or suit against the organization. The best way to transfer (or mitigate) this liability risk is by purchasing Professional Liability Insurance (or Medical Malpractice Insurance) usually from their own captive insurance companies. (see our Insurance RFP©).

Another large exposure for health care providers is to loss from business interruption.  In addition to purchasing insurance, the company will need to prepare a Business Continuity Plan (BCP) explaining how the company would respond to an emergency (Emergency Response Plan-ERP) and how to recover from it (Continuity of Operations-COOP). Our Insight BCP© help companies plan for and respond to emergencies.

Health care providers also use many outside services to maintain their facilities and equipment or to transport their patients. Our Contractual RM© will help to manage the risk of subcontracting and outsourcing.

Service Risks for Health Care Providers

Health care providers are in a unique situation where most of the activities they perform create activity and product (service) exposures at the same time.

Due to strict and absolute liability laws, as well as the nature of the services provided by health care providers, and regardless of how experienced and careful the health care professional may be performing such services, there is always the possibility that the company may become legally obligated to pay damages.

Product or Service risks have less to do with how the product was made or service performed but more with who will be using the product or receiving the service. Those with health conditions and children are the consumers of pharmaceuticals and toys respectively. It’s impossible for these manufacturers, their wholesalers and distributors to eliminate the risk of an ill person becoming sicker after taking the drug…or a child getting hurt playing with a toy. The same with a doctor who treats the ill. They have no way to know how the patient’s body will react to certain treatments.

Insurance is the best way to transfer risk of events that are totally unpredictable. (Insurance RFP©). In addition, our Activity-Based ERM© can help organizations to identify and amalyze service related exposures.