Reader Questions

Ask for possible discounts on your liability insurance

Question: How can we be sure we’re getting all the discounts and credits that we’re entitled to on our liability insurance? Do I have to go looking for them or can I trust the insurer to offer everything that applies?

Answer: You have to be vigilant to make sure you’re getting all the discounts that apply, says R. Stephen Trosty, JD, MHA, CPHRM, director of risk management for American Physicians in East Lansing, MI. A good broker will take responsibility for digging up every way for you to save money on your coverage, but you’re well advised to ask lots of questions and push for a discount whenever you think you’ve earned it.

Virtually all insurers offer discounts for good risk management activities and preventative measures, as well as providers who have been claims-free for a period of time, he says. The number of years may vary from one insurer to another. If you’re attended continuing medical education, or if your institution provides such courses, you might get a discount. "They’ll also say that if you have a designated risk manager and a comprehensive risk management program, you’re eligible for a discount," Trosty says. "Then they will outline what elements you should have in place in that risk management program. How much of that you have in place determines whether you get the discount and how much of a discount you get."

In many cases, the insurer will perform an on-site risk assessment to make such decisions. If you don’t have all the required elements in place, you may get a report outlining those shortcomings. Then you can address those problems and show the insurer that you have made those improvements, helping you get the discount next year. "Most individual doctors don’t have a clue that these discounts are even available. When it comes to institutions, it often depends on the sophistication and experience of the risk manager," he says. "When you use a broker, it depends on how comprehensive the broker’s service is. The broker or agent ideally should be working with you to determine what credits you’re eligible for and helping you obtain them."

If your broker or agent is not aggressive enough, you could miss out on discount opportunities, Trosty cautions. When picking brokers or agents, a good criterion is just how proactive they are when it comes to seeking discounts for you. But if you miss a discount, how big a deal is that? Sometimes it’s a very big deal. "They can go as high as 35%," Trosty says. "Your risk management program alone can represent a discount of 5% to 15%, and when you look at the price of premiums today, that’s real money. This is an opportunity for the risk manager to really bring some dollars to the bottom line."

If you do receive discounts because either you were diligent in asking about them or because your risk management activities made them possible, be sure you let upper management know. Point out those discounts to your boss and show what the premium would have been if you had not created a risk management program that the insurer admired enough to grant a discount. Your boss may then pass that same information on up the line, justifying the risk manager’s budget.

Trosty notes that risk management discounts are among the most frequently overlooked savings when buying liability coverage. Things such as a claims-free period seem more obvious, but agents and risk managers often don’t think to pursue credits for their good risk management activities. A wide range of elements can qualify in the risk management department — interactions with quality review, credentialing activities, programs to prevent medical errors, and many others.

But what if you have a program that you’re proud of, yet it doesn’t fit any category for which the insurer offers a discount? Are you just out of luck? Not at all. "Either you or your broker ought to bring it to their attention," Trosty says. "Sometimes the categories are broad, and sometimes there is room for discretion. It’s worth asking. You need to have the evidence to demonstrate the benefits of what you’re doing, but if you have a program that you know is good risk management, bring it up and make a case for why you should get a discount."

Question: We’re in the process of reorganizing some departments and upper management wants me to take on the responsibility of handling media inquiries. Is this a proper role for the risk manager?

Answer: Probably not, though you should be involved in the process to some extent. Some risk managers at smaller institutions have to shoulder this responsibility along with many others just because there is no budget for a separate staffer, but that is not an ideal situation, says Geri Amori, PhD, ARM, FASHRM, president of Communicating HealthCare, a risk management consulting firm in Shelby, VT, and past president of the American Society for Healthcare Risk Management. "We can do a lot of things when we absolutely have to, but that doesn’t mean we’re the best person for the job," she says. "No matter how good you are as a risk manager, you’re probably not as good with the media as someone who is trained and experienced in that job."

The question sometimes arises because risk managers may be put in charge of the media professionals, ultimately making decisions about what can be released. That arrangement can be good, Amori says, because the risk manager does have a responsibility to make sure that information is provided in a positive way and that statements to the media don’t violate privacy laws or contradict hospital goals.

But actually taking that call from the local reporter? Nope. "Risk managers are not trained to deal with aggressive media people. When the media gets aggressive and in your face, we don’t know how to deal with that in the best way," she says. "And the community can perceive the risk manager as the person who is hiding something and trying to protect the hospital at all costs. You need a public relations professional who knows how to deliver information in a way that people will trust, and that’s a real skill."

The best arrangement is for the risk manager to have a close relationship with the public relations department, helping the professionals there understand issues like privacy laws and patient safety. Establish a system in which sensitive information is not released without the risk manager’s approval, but also be sure to brief the public relations staff about any developments that may draw media calls. Be quick about that, Amori says. The media can find out about adverse events with amazing speed, and you will fare better if the public relations staff are briefed before they start calling.

"If you have to take on the role of dealing directly with the media, get some training in that area," she says. "It would be a mistake to think that you can take it on without learning any new skills."