By David G. Hampton

Trend setting Freestanding Emergency Centers have the opportunity to turn what is commonly thought of as an expense into a growth asset.

The first key is to acknowledge that the cost of managing risk and insurance, especially for rapidly growing organizations, can far exceed premiums paid. Time spent determining what to insure and how and with whom to insure it, is costly simply because you need to pay someone to do the work. And, when an event occurs that causes a loss and/or a claim, the disruption and the time and expense of mitigating the loss can be significant. While difficult to calculate, these costs can far outweigh the expense premiums represent.

The picture worsens when you add in lost opportunity cost. Instead of focusing on managing your core business and delivering top quality patient care, your team is spending time putting out fires and taking on tasks they may not be accustomed to.

The second key is developing a comprehensive picture of all the risks inherent in your business. Generally speaking, risk falls into four major categories:

1. External environment
2. Governance and leadership
3. Operational
4. Market

Within each of these areas lie specific risks that must be understood, quantified, and addressed.

The third key is to take a proactive approach and think first about prevention. There is no better way to control the cost of risk than to prevent it from happening in the first place. Think no harm, no foul. If there are no claims, your premiums may not increase and, depending on how you fund your protection, the cost can disappear entirely.

The fourth key is to understand the pros and cons of all the different ways available to you for protecting against all the risks inherent in your business. For example, buying insurance from a carrier, be it for, business insurance, group health insurance, directors & officers liability, cyber liability, etc., is only one of several alternatives. Self-insurance, self-funding, captive insurance companies, prevention strategies, buying co-operatives are just a few of the choices available.

The fifth is the most important key for rapidly growing organizations. Implementing strategies that intentionally leverage risk and insurance to promote and facilitate growth is not only the Holy Grail of cost control, it is key to out-pacing the competition. It frees up your organization to take on immediate and strategic opportunities. And, it enhances your reputation in the marketplace and healthcare community as you grow. According to Fletcher Brown, a health care partner in the Austin office of Waller Lansden Dortch & Davis, L.L.P, “entities that take a deliberate and organized approach to managing their risk present themselves as a more viable business partner and/or acquisition target.”

For example, many are thinking outside of the box when it comes to managing the risk inherent in owning expensive, mission critical medical equipment like CT scans and ultrasound units.

Instead of committing to many separate OEM service and repair contracts offered by the manufacturers at the time of purchase, they pool all of their service and maintenance coverage under a single, alternative contract. The annual cost savings realized by alternative maintenance contracts ranges from 10 – 25% compared to OEM contracts. Replacing many contracts with a single contract with a single renewal date creates additional value; it reduces administrative burden and frees up resources that can rededicated to improving patient care and increasing profitability.

Are you creating a big basket of unmanaged and unknown risk?

HealthSure’s unmatched focus on healthcare gives us a unique advantage when it comes to helping your organization succeed in the increasingly complex world of risk and insurance. We’ve made it our mission to ensure you have access to the strategies, resources, solutions and expertise needed to navigate the constantly changing healthcare landscape.

If you are dealing with risk in an ad hoc, as needed manner, your business could become a big basket of unmanaged and unknown risk. In our experience, this can have a significant negative impact on your margins, the quality of patient care you deliver, patient and employee safety, compliance and overall, the culture of your organization.

Let’s talk about your risk opportunities

If you want to learn more about the trends of turning risk and insurance into a competitive edge, I look forward to hearing from you to start a dialogue.

David G. Hampton
[email protected]
HealthSure is the only Texas risk consulting and insurance agency focused solely on the healthcare industry. In the past 15 years, over 250 healthcare organizations have come to rely on us to prevent surprises, protect all their assets, and make sure their opportunity to prosper is unimpeded by risk. Our clients know they can depend on us to make sure their insurance does what it is designed to do when they need it. We keep them ahead of ever-changing laws and regulations and we are always there when they need help.