Hospitals Launching Private Health Plans Have Concerns: What It Could Mean to Work Comp

My fellow FAU alumna, Maria Todd, wrote a very good article about what’s at stake for hospitals considering launching private health plans.

While Maria’s article focuses on hospitals and general health care, it would be prudent for the workers’ comp industry to pay attention to what she has to say, as her expertise in the areas of health care, hospital development, healthcare marketing and branding, concierge medicine and medical tourism has taken Maria around the world several times (lucky her – “I never get to go anywhere”).

There is one item Maria raises in her article that should be of vital interest to workers’ comp.

According to Maria, the process to launch private health plans is fraught with complexity and extreme financial risk. She goes on to add that it involves, at a minimum, obtaining a state license and meeting (and maintaining) capital reserve requirements adequate to cover IBNR (incurred but not reported) claims lags.

Those of us who have been in the claims arena of work comp know a little something about IBNR claims, and what that can do to both a carrier’s loss picture and an insured’s frequency and severity, which affects their experience mod.

If hospitals do choose to launch such plans, they will move closer to being insurance companies that happen to provide medical care, rather than just providing medical care as a hospital.

Maria’s recommendation is that they sink their money into something better that will float.

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