Insurance selection and risk management for healthcare organizations

Health Care -- Risk Management -- Session Plan

The simple, general definition of "insurance" undergoes numerous variations according to the natures of insureds and of possible claimants. A healthcare organization, by virtue of its complexity, may be faced with a multitude of factors that must be considered for adequate coverage. A review of various insurances shows that types of claims, types of insured individuals/organizations, and types of claimants interact to determine the types of insurance needed.

The Basic Concept Of Insurance

Generally, insurance is a contract in which one party indemnifies or guarantees another party against loss that might be caused by a specific event or danger (Merriam-Webster, Inc., 2013).

The Key Factors To Be Considered In Choosing An Insurance Company And Policies For A Healthcare Organization

A healthcare organization seeking the optimal insurance company and policies must examine a number of factors to obtain required coverage with reasonable rates and excellent insurer-provided resources. First, since coverages differ among states, the organization must determine the coverages available in its own state(s) (Boone, 2000). Secondly, it must determine whether and to what extent it will provide liability insurance for the individual healthcare providers working in its organization (Boone, 2000). Third, it must determine whether it wishes to employ claims-made coverage and/or occurrence coverage (Boone, 2000). Fourth, it must choose from a menu of policies, depending on its specialties, including but not limited to: workers' compensation, general liability, professional liability policies, managed care liability, directors' and officers' liability, comprehensive catastrophe liability, long-term care comprehensive liability, medical waste and pollution liability, billing errors and omissions liability, and defense costs liability (Boone, 2000). Fifth, it should seek an insurance company that offers effective and compatible risk management plans with readily available agents and resources for hospital administration and individual healthcare providers within the organization (Boone, 2000). Sixth, it should seek an insurance company that offers excellent legal representation, excellent medical experts, continually updated written and verbal information on legal, malpractice and claims trends (Boone, 2000). Seventh, it should seek an insurance company that intelligently prices policies based on local/regional risks, offers premium payment plans and offers credits or premium discounts based on the experience of staff, successful participation in risk management programs and claim-free or low-claim periods (Boone, 2000).

d. "Claims-Made" Liability vs. "Occurrence" Liability

The difference between "claims-made" and "occurrence" liability focus on the timing of different events. A claims-made policy protects according to when a claim was reported while an occurrence policy protects according to when the incident on which the claim is based occurred (Boone, 2000).

3. Conclusion

Insurance is a contract in which one party indemnifies or guarantees another party against loss that might be caused by a specific event or danger. A healthcare organization seeking the optimal insurance company and policies must examine a number of factors to obtain required coverage with reasonable rates and excellent insurer-provided resources. Workers' Compensation Insurance is a separately-administered state-by-state system that offers an "exclusive remedy" to injured workers in order to avoid the burdens of negligence lawsuits against employers. Liability insurance, on the other hand, is governed by federal and state courts and indemnifies or guarantees the insured against loss from claims or lawsuits against it. Finally, "claims-made" liability insurance focuses on the time at which a claim is reported while "occurrence" liability insurance focuses on the time at which the underlying event occurred.