The Insurance Perspective
       In September of this year, the Managed Insurance Programs Division of Arrowhead General Insurance Agency, Inc. launched a new nursing home insurance and risk-management program called Silver LiningSM.
       The Silver Lining program was developed over the past year in response to the growing nursing home insurance crisis facing the industry. The program's recommendations and requirements are based upon quantifiable research done by Arrowhead and its risk management partners, which include Tempur-Medical.
       The Silver Lining program will partner with select insureds who will work with Arrowhead's risk-management group to better their risk profile and ultimately lower their insurance through risk participation. Silver Lining insureds will retain a $50,000 self-insured retention, while Arrowhead offers the expertise to minimize loss potential.
       Arrowhead's Managed Insurance Programs Division will underwrite Silver Lining's nursing home risks on behalf of Lloyd's of London. General liability and medical malpractice coverage through Lloyd's is provided with limits of $1 million/$3 million aggregate. The program is initially available only in California with plans to expand nationally based on the success of the program. Silver Lining's minimum premium is $50,000.
       The primary feature of the Silver Lining program is the use of research on an ongoing basis combined with innovative risk management techniques. The Silver Lining program depends on programs, such as TUSMaP, to manage liability exposure as a condition of the insurance. Tempur-Medical will be responsible for the risk management of all pressure ulcer issues, while national loss control consultant, the Worksafe Group, will handle all other risk management issues.
       "The Tempur-Medical pressure-ulcer and fall program really is an integral part of risk management in the nursing home industry today," says Carole Fleischman, president of the Arrowhead Managed Insurance Programs Division. "Many of the losses that have been incurred are the result of pressure ulcers and Tempur-Medical solves this problem. We have received very favorable feedback from nursing home executives as well as the insurance brokerage community at large."
       Additionally, Arrowhead will utilize independent nursing home claims administrator, ProClaims, which maintains over 80 percent of its claims business serving the nursing home industry.

Risk Sharing: A Solution or a Passing Trend?
       The ultimate goal is quality care; the responsibility for which can and should be shared by both providers and suppliers. But what impact will risk sharing between supplier and nursing home ultimately have?
       According to Keith Becker, a healthcare vice president at Marsh, US, the insurance industry is very attracted to the risk-sharing approach. "Insurance companies are thrilled to see manufacturers and suppliers stepping up to the plate. This means they are fully committed to all of the impact of the sale of their products, not just beating competitors and increasing revenues and/or profits." Marsh is the largest brokerage firm in the world, and one of the largest providers of liability insurance to the healthcare industry in the United States.
       "At the very least," Becker continued, "an indemnity reduces the financial exposure of our client, even if the goods or services provided did nothing to improve quality of care but only maintained the status quo. When there are more people paying the bill in terms of judgments and settlements, there is already less exposure to our client. Ultimately, it stands to reason that manufacturers and suppliers will be more serious about actually improving the quality of care if they are willing to offer indemnities along with their warranties.
       "But," Becker continued, "perhaps most important of all is to recognize it does no good to just move the costs from one company to another. The same liability-related expenses would need to be paid out of the same cash flow stream funded by limited patient care dollars. But if exposure can actually be reduced through improved outcomes generated by targeted risk-sharing programs...now that's the holy grail of the healthcare insurance industry! We fully support the concepts behind what Tempur-Medical's trying to do and truly hope that more healthcare suppliers will follow suit with this mode. We think the dynamics are much healthier if both sides of the provision of healthcare are on the same page, focusing almost exclusively on accomplishing as much good for as many people as possible, at the lowest possible overall cost. There's no greater incentive to improving care than sharing risk. Risk mitigation itself isn't a new concept. Doing it by risk sharing with your supplier is."

For more information, contact Renee J. Olszewski at rolszewski@hmpcommunications.com.