No one enjoys paying their hospital professional liability (HPL) premiums, but paying too much is even worse. Your premium might be too high if the insurer is loading based on a broad geographical area, and it's up to you to ask the right questions.
The problem for the hospital is that it might be facing a premium increase based on artificially inflated claims experience — one that may look at all facilities nationwide, or over a specific geographic area — rather than one focusing on the specific hospital or location, cautions Breen.
Question the insurer's loading policies and formulations up front, advises Breen.
"Providers need to be asking carriers how their load premiums are calculated," Breen says. "What are the sources of the information the carrier uses to determine the load? How up to date is that information the carrier uses, and how is that information tested? They should, to the extent possible, be comparing carriers in this regard."
"The efforts the hospital makes in risk management can have a direct impact on its insurance costs, but the hospital needs to monitor what its exposure is and why and look for ways to reduce its risks in those areas it identifies," Breen says. "The risk manager also ought to be following litigation trends, including verdicts, in its location and contiguous locations, as he or she looks to evaluate the proposal carriers make."
Hospitals also need to be sure not to look at claims history in a vacuum, Breen cautions. Don't focus on one "good" year while ignoring two or three previous "challenging" ones. "The risk manager's goal is to protect the hospital, and it is critical that a realistic assessment is made so as accurate a projection as possible can be forecast," he says.