Leading the way in health care liability

CNA HealthPro uses hyper-specialization strategy to serve a diverse and changing market

By Elisabeth Boone, CPCU

Just a few generations ago, most American health care was delivered by family physicians and small community hospitals. Births and deaths often occurred at home, and home also was where many people recovered from serious illness or injury.

Medical errors were made, some of them egregious. Until the 1960s, however, medical malpractice lawsuits were rare, and some doctors didn’t even carry insurance. Those who did have coverage largely found it to be both available and affordable.

Over the last 40 years, the U.S. health care system has grown exponentially in volume, complexity, and diversity. Medical specialties abound, as do clinics for the treatment of a host of physical and mental health conditions. Add in-day surgery centers, medical schools, pharmacies, laboratories, and home health services, and the depth and breadth of loss exposures becomes seemingly limitless.

The last several years also have seen an explosion in the market for senior health care services and living facilities, and demand for these services is intensifying as the first Baby Boomers approach retirement age.

It takes experience, skill, and savvy to address the myriad exposures presented by our increasingly sophisticated health care system, and those traits are a hallmark of CNA Insurance Companies. Through its CNA HealthPro unit, the insurer offers professional liability insurance programs for a wide array of health care providers and related organizations. As a multi-line carrier, CNA also writes a full range of business insurance: property, general liability, product liability, excess/umbrella, workers compensation, commercial auto, business interruption, directors and officers, and errors and omissions.

CNA has been serving the health care field for more than 40 years, according to Andrew Shapiro, senior vice president of HealthPro. A lawyer by training, Shapiro was a partner in a law firm in Washington, D.C., before he joined CNA 10 years ago. Since then he has held a series of claims and underwriting management positions.

Trends and changes

“The professional liability marketplace has changed dramatically over the last 40 years,” Shapiro says, “just as the health care industry itself has changed. You can look at almost any aspect of health care over the past four decades and see significant changes. That includes the expectations that society has for how their health care will be delivered; the quality of the care itself; the way health care providers organize themselves; how payors—health insurers and government entities—function, and the way our legal system handles disputes. The changes have been foundational throughout the entire industry,” Shapiro asserts.

How have these changes affected CNA’s approach to its role as a major provider of health care professional liability coverage?

In addition to designing coverages to address new and emerging health care liability exposures, Shapiro says, “We also must develop the kinds of sophisticated risk-financing techniques that these entities demand. So our strategy has evolved from focusing on the individual practitioner to providing insurance solutions for much larger groups with much more diverse interests and a lot of capital at stake.

“What we strive for, and I believe our competitors are doing the same, is to stay as far ahead of the curve as we can in terms of the way the industry is trending,” Shapiro continues, “so that when there is a new mechanism, we’ll be in a position to provide a solution for it. CNA’s strategy more recently, over the last seven years, is to be intensely focused on dedicating resources and developing expertise in specific areas, so that we’re able to do two key things: understand the medicine, and understand the law. This will allow us to meet our clients’ needs and at the same time be fiscally responsible to our company and to our shareholders,” he explains. “So we think the strategy of hyper-specialization, as we call it, has been very important to our success over the past seven years, and we think it will be even more so going forward.”

Convenience is key

“Going back to the 1960s and 1970s,” Shapiro says, “we, like a lot of other companies, have moved from being focused primarily on small community hospitals and doctors, who were largely in solo practice at the time, to serving a much more diverse set of customers—everything from physician group practices, allied health care facilities that are not associated with a hospital, and other integrated delivery systems.”

The growth of allied care facilities, Shapiro points out, is attributable to another emerging phenomenon in health care delivery. “We’re seeing a big trend toward providers who address convenience. This trend, like others, is to a considerable extent driven by health insurers,” he comments. “Allied health care facilities are becoming more sophisticated. Now, for example, if your physician wants you to have an MRI, instead of going to a hospital, you can go to a clinic that’s closer to where you live. Now there are urgent care centers and surgery centers where you can have procedures done without going to a hospital, whereas 10 years ago a hospital was your only choice.”

Also growing in numbers are walk-in clinics in pharmacies and discount retail stores. Staffed by one or more nurse practitioners, these facilities are popular both with people who lack health insurance and with those who have insurance but simply want quick treatment for minor problems. Many people, Shapiro remarks, see these clinics as a viable alternative to visiting a hospital emergency room and likely waiting hours to be seen.

“Those facilities obviously create a challenge for us in terms of understanding the exposure and setting the right price, terms, and conditions,” Shapiro says. “That evolution is ongoing, and more and more care is being provided outside the hospital at centers that have different kinds of characteristics, from both a risk perspective and a regulatory perspective. We have to address the question of how far these convenience centers go with the care they are providing; there’s a fair amount of debate in the medical community about that,” he observes. “But clearly they’re the wave of the future, and we need to be able to respond by meeting their needs for insurance.”

Among the allied care facilities for which CNA HealthPro provides professional liability coverage are ambulatory health care facilities without physician exposure; cancer treatment centers; community health centers; dialysis centers; health departments; home health services; hospice services; laboratory facilities providing routine chemical testing; lithotripsy centers; mental health facilities providing outpatient counseling; pharmacies; radiology services; rehabilitation services; schools, including dental, optometry, and allied medical care professionals; student health centers, and substance abuse counseling centers.

Core coverages for allied health care facilities are general liability and professional liability. Also available are business interruption, commercial auto, errors and omissions, excess/umbrella, property, and workers compensation.

Hospitals and physicians

Consistently ranked as a top 10 medical malpractice carrier by A.M. Best, CNA HealthPro writes general liability and professional liability for all kinds and sizes of hospitals and health systems throughout the country. In recognition of the wide variation in risks and legal environment from one state to another, the insurer uses state-specific underwriting and rates. CNA offers a variety of insurance structures, from first-dollar coverage to self-insured retentions, and provides comprehensive risk control and claims management services.

Eligible entities include children’s hospitals; community hospitals; medical schools and universities with hospital facilities; multi-hospital, multi-facility health systems, and specialty hospitals such as cardiac or psychiatric. In addition to liability coverage, insureds may obtain commercial auto, directors and officers, employment practices liability, excess/umbrella, property, and workers compensation.

On the physician side, CNA HealthPro’s products are designed for large physician clinics and group practices that assume a high deductible or a self-insured retention of $100,000 or more. Core coverages are general liability and professional liability. Also available are commercial auto, employment practices liability, excess/umbrella, property, and workers compensation.

The insurer also offers claims-made professional liability coverage for displaced, underserved, or otherwise hard-to-place physicians. The program is written on a nonadmitted basis and targets individual health care providers who hold either a temporary or permanent license in the state or states where they practice clinical medicine.

Nurses and allied health providers

CNA HealthPro is the leading provider of liability insurance for the nursing profession and, through AON Affinity, covers more than 700,000 nurses, nurse practitioners, and nurse anesthetists nationwide. Coverage also is available for nursing students, nurse’s aides, and nurse assistants. Programs are available on an admitted basis in all states and are typically sold directly to insureds.

Subluxation-based chiropractors can obtain claims-made professional liability coverage through Compass Insurance Services, which markets the products nationwide under the name Chiropractic Benefit Services.

More than 70 different allied health care specialties can secure liability protection through Aon under the brand Healthcare Providers Service Organization. Among the eligible health care providers are athletic trainers, audiologists, certified laboratory technicians, certified occupational therapy assistants, counseling professionals, diagnostic medical sonographers, emergency medical technicians, kinesiologists, nursing professionals, nutritionists, occupational therapists, pharmacists, physical therapists, radiation therapists, social workers, and speech-language pathologists.

Claims-made professional liability coverage written on a nonadmitted basis is offered for displaced, underserved, or otherwise difficult-to-place nurse anesthetists and allied health care providers.

CNA HealthPro and Brown & Brown sponsor the Professional Protector Plan for Dentists®, which covers more than 24,000 dentists in all states except Massachusetts. Core coverages are general liability and professional liability on a claims-made basis, including a consent-to-settle provision. Property coverage is available for buildings, computers and other dental electronic equipment, dental office contents, and patient dental records and x-rays. Claims-made professional liability coverage can be arranged for difficult-to-place dentists on a nonadmitted basis.

New options for seniors

As recently as two generations ago, most Americans remained in their homes into old age, and many died at home rather than in a hospital or nursing home. Today’s seniors are living longer, staying healthier, and can choose from a wide and growing array of options for post-retirement living, from independent living to assisted living, continuing care, skilled nursing, and home- and community-based services.

“We are very much involved in the elder care expansion,” Shapiro says. In fact, CNA HealthPro is the largest provider of insurance services for the longterm care industry. The company insures both not-for-profit and for-profit facilities nationwide.

Today’s seniors, Shapiro points out, are far less likely to settle for the kinds of care offered to earlier generations, and some are taking steps to prepare for the kind of post-retirement life they want instead of waiting till they reach their golden years.

“I’ve heard about people in their 40s getting together to buy an apartment building where they’ll retire together, and then contracting with a home health agency or physician group to provide the services they’ll need. Retirees today have access to every level of care, from totally independent living in a community to a modest menu of services to full-time skilled nursing care,” Shapiro says.

“We’ve developed products and underwriting approaches for the elder care market that we think are leading edge in the industry,” he comments. “As each new kind of facility begins to operate, we try to understand it as quickly as possible. Entities like PACE (Programs of All-inclusive Care for the Elderly) provide medical, social, and long term care for the elderly; other organizations focus on aging in place, allowing seniors to remain in their homes and receive care there. Those kinds of organizations have different needs than, say, skilled nursing facilities.”

The proliferation of new and different elder care facilities, Shapiro notes, has caused some risks to be misclassified with respect to professional liability insurance. “A couple of years ago, when an adult day care center would seek insurance, the application they got from the broker or the insurance company would be for a child day care center. That showed that many insurers didn’t understand the risk.” Shapiro says. “We are at the forefront of understanding those risks, providing products to address them, and having underwriters who are knowledgeable about the exposures.”

CNA HealthPro offers coverage to long term care facilities providing every level of care to the senior community. Core coverages are employee benefits liability, general liability, and professional liability; additional coverages are boiler and machinery, commercial auto, crime, equipment breakdown, excess/umbrella, inland marine, and property.

In addition to traditional insurance coverages, CNA HealthPro offers alternative mechanisms such as large deductible programs, captive reinsurance, and group risk-sharing arrangements. Potential insureds are advanced medical technology companies, allied health care facilities, hospitals and health care systems, long term care services, and physician groups.

Core coverages are general liability and professional liability; also available are excess/umbrella and product liability.

CNA HealthPro also provides a full menu of risk control services to reduce risk and improve patient safety. Agents are encouraged to take advantage of a wide range of education and training opportunities to help familiarize them with health care exposures and insurance solutions.

Committed, focused, and experienced, CNA HealthPro clearly has earned its place as a leader in serving the increasingly diverse health care industry. *

For more information:
CNA HealthPro
Web site: www.cna.com/healthpro