By Brian York, Vice President, Coverys Custom Accounts

In the world of medical malpractice insurance, there are two primary coverage options: traditional medical malpractice insurance through an admitted insurance company, or alternative risk transfer (ART) through a captive insurance company, risk retention group, or self-insured retention. Most healthcare organizations or physicians think of these two options as an “either/or” proposition. However, those who chose the ART option may not realize how they ― and their patients ― can benefit from the insights and services provided by larger medical malpractice insurance companies that act behind the scenes to lend expertise, strength, and stability. 

You see, when a physician or healthcare organization chooses ART, there is nearly always a medical malpractice company somewhere in the mix. Take, for example, the relationship between a university-affiliated physician group and Coverys. The physician group is insured through a captive insurance company that provides $1.75 million of liability coverage, and Coverys provides an additional $20 million of capacity in excess of the $1.75 million. But what is unique about the relationship is that the excess insurance is just the beginning. 

Collaborating for Maximum Impact
We at Coverys don’t believe that partnerships with captives are all about the excess or reinsurance coverage. We believe in a values-based approach to provide the benefits of our expertise, capacity, financial strength, and value-added services to captives, just as if they were primary insureds (i.e., as if the physician who is the end user of the liability insurance was insured by us directly). 

So what could an ideal captive/medical malpractice insurance company collaboration look like? It might include the medical malpractice insurance company providing reinsurance or excess coverage or offering claims handling and support, physician education services, risk management services, and bundled payment support. In many cases, captives that seek relationships with excess insurers or reinsurers won’t ever see these ancillary and powerful services in their proposals. (At Coverys, every proposal includes such services.)

“But captives are the competition, Brian,” you might be thinking. “Why would a medical malpractice insurance company want to collaborate with them in such integrated and extensive ways?” Because it’s about providing the very best service to everyone with whom we work. It’s about finding a different model ― a better model ― for us, for the captives, for the medical providers, and for the patients too. It’s foolish for medical malpractice insurance companies to think of captives merely as the competition; captives are here to stay, are successful and strong, and provide needed, valuable services to the marketplace. It’s our desire to help augment and enhance those services to create a program that is even more meaningful to physicians and healthcare professionals. 

Consider just a few types of value-added services that trend-setting medical malpractice insurance companies are offering to their captive partners:
  • Risk management and data analytics that include on-site consultation, practice site assessments, and benchmarking data to help medical practices prioritize their action plans and mitigate exposures
  • Resources, like Coverys’ extraordinary 50-chapter Physician Practice Manual, and online patient safety and risk management tools
  • Diagnostic tools to help physicians make clinical decisions more quickly and accurately; Coverys uses the powerful medical app VisualDx®, which contains 25,000 high-quality medical images
  • Education, including ongoing CME-eligible educational experiences with national and international medical experts, and entire institutes of learning, like the ELM Exchange; the ELM Exchange is a Coverys company that offers ACCME- and ANCC-accredited online courses on more than 300 risk management and patient safety topics, learning opportunities in 28 clinical specialties, invention programs for at-risk physicians, and a bi-weekly medical-legal case analysis newsletter
  • Profitability services, like a system that helps manage bundled payments from Medicare, keeps payments profitable, and allows practitioners to identify where the risks lie and where they will become unprofitable

To the captive, true collaboration with a medical malpractice insurance company can mean better margins, insured retention, operational efficiencies, and improved physician/insurer relationships. As for the physicians themselves, the benefits are many ― from education, to operational improvements, to financial support. And, in the end, what matters most is that strategic collaboration benefits the patients by keeping them safer and healthier. We believe that is precisely what the very best captive/medical malpractice insurance company collaborations do.

Predicting the Future of Captive/Medical Malpractice Insurance Company Collaboration
Meaningful collaboration between medical malpractice insurance companies and captives is still a relatively new trend. Even today, most medical malpractice insurance companies and captives work together in a very limited capacity. Companies at the forefront of the collaboration trend, like Coverys, have much yet to explore and are just beginning to experience significant demand from captives for such robust collaborations. We believe that other large, traditional medical malpractice insurance companies will eventually join the revolution by offering their own expertise, capacity, financial stability, and valued-added services to captive partners.

Gone are the days of thinking of captives and medical malpractice insurance companies as two sides of the same coin ― as competitors who aren’t collaborative colleagues. The truth of the matter is that both types of healthcare liability insurance companies need and benefit one another, and a thoughtful approach to collaborating, always with the interests of the physicians and patients in mind, creates a powerful win-win outcome. 

The information described is for general education purposes only and is in no way intended to serve as legal or financial advice. For advice on handling specific legal problems, always consult with an attorney.