Sarah E. Pacini is vice president of risk management and insurance for Advocate Health Care, an 11-hospital health care system based in Downers Grove, Ill. She spoke with Business Insurance Associate Editor Sheena Harrison about the issues that she and other health care risk managers are facing in light of the Patient Protection and Affordable Care Act and other emerging risk areas. Edited excerpts follow.
Q: What are the biggest challenges facing health care risk managers right now?
A: I believe the biggest challenge for health care risk managers today is the volume of health care change. Health care traditionally changes rather slowly; however, the Affordable Care Act is a new frontier, and many traditional risk solutions will no longer suffice. It is important for risk managers to be forward-thinking and prepared for the “new normal” in health care.
Q: How can health care risk managers prove their value to their organizations and get buy-in from senior managers?
A: Health care risk managers are increasingly expected to be able to predict the future state, reduce the expected risks? and develop feasible solutions. Having a healthy understanding of the risks? at issue, as well as the risk appetite of your organization, can improve your ability to offer your executive team viable solutions to real-time challenges.
Q: Do you expect the increased patient load from the Patient Protection and Affordable Care Act to generate increased medical malpractice exposures for health care organizations?
A: Increased patient load does translate into increased exposures from a strictly mathematical actuarial perspective; however, PPACA's focus on keeping patients well may help to control the marked increase in exposure data. I would anticipate that initially there will be very little impact from a pricing perspective due to PPACA's focus on prevention being coupled with the sustained soft market in the hospital professional liability arena. I do expect pricing to be impacted based upon venue once the judicial system begins deciding the issues of apparent agency, ostensible agency and vicarious liability that are created under PPACA.
Q: Do you see hospitals and health care organizations moving toward self-insurance or captives to manage some of their risks?
A: Most of the hospitals with which I am familiar do self-insure or utilize a captive. Insurance vehicles such as these offer a tailored insurance product which fits the needs of an individual institution much better than an off-the-shelf commercial product. In addition, the cost savings possibilities with the appropriate focus on patient safety are immeasurable.
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