Healthcare/Medical Malpractice

Pinnacle has always worked with us to identify what information was needed, obtain the info and present important results.

— George Deebo
VA Birth-Related Neurological Injury

Services

Health Care/Medical Professional Liability

Today, no industry is changing as quickly or fundamentally as health care. At the same time, escalating medical professional liability costs have become a critical issue for health care providers and those seeking to improve health care value and outcomes.

Pinnacle’s experts understand the spectrum of risks inherent in delivering health care services in today’s litigious environment. We have provided actuarial consulting services in every aspect of medical professional liability insurance at the local, state and national levels. Our customers include health care providers, captive managers, medical professional liability insurers, insurance regulators, legislators, industry associations, and government insurance programs.

By working with the unique issues associated with numerous specialties and state reform types, as well as both traditional and alternative insurance programs, our experience equips us to develop accurate and efficient strategies to help you strategically manage your health care liability exposures.

If you’re a health care provider pursuing alternative risk management strategies such as captive insurance companies and risk retention groups, we can help by designing your program, estimating the impact of modifying or eliminating certain services, and even investigating the cost-benefit of new technology to reduce medical errors.

Our expertise with a wide variety of health care specialties includes:

  • Chiropractors
  • Emergency medicine
  • Hospitals, including childrens’ and teaching hospitals
  • Local, heterogeneous physician groups
  • Nurses, including certified registered nurse anesthetists
  • Nursing homes and residential treatment centers for youths
  • Obstetricians and gynecologists
  • Occupation medicine centers
  • Patient compensation funds, including birth-related neurological injury funds
  • Physician staffing
  • Podiatrists
  • Radiologists
  • Surgeons

Publications and Media

September 7 2017 APEX Webinar
Opioids and Workers’ Compensation

June 2017 APEX Discussion Series
Medical Professional Liability: State of the Market in 2017
Authored by Timothy C. Mosler and Arthur R. Randolph II.

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Case Studies

Captive Feasibility Study
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Captive Feasibility Study

When a regional physicians group, with a moderate deductible program realized they were not getting due credit for more than a decade of exceptional loss experience, they decided to explore other options.

They chose Pinnacle specifically due to our expertise in captive and self-insurance programs.

Initially, Pinnacle discussed options including segregated cell captives, single parent captives, and even risk retention groups once they began to consider marketing the program to other similar regional physician groups.

While the customer was considering the structural alternatives, Pinnacle pursued a funding analysis. Credibility weighting the customer’s experience with industry benchmark data, produced estimates of expected losses and loss variability in several different loss layers. This not only showed the additional risk associated with higher limits of self-insurance, but was also tremendously valuable in negotiations with fronting carriers and reinsurers.

The client decided to increase the deductible on the coverage provided by their insurer, which offered more responsive pricing due to Pinnacle’s funding analysis and to form an off-shore captive providing deductible buyback coverage.  The comfort level our client had with the insured’s services also influenced the decision.

Pinnacle also worked with the captive manager to develop the feasibility study and pro forma financial statements that become the foundation of the captive application. The application was approved as submitted and the captive is running quite successfully.

Formation
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Formation

In an effort to attract and retain quality physicians, a large integrated healthcare system operating in the Midwest decided to create a physician’s professional liability insurance (PPLI) alternative to the commercial markets. After a comprehensive feasibility analysis, an offshore captive insurance company (CIC) was capitalized and formed. Pinnacle actuaries were engaged to assist in the feasibility analysis and implementation of this strategy. Pinnacle’s involvement began by assisting the captive manager to develop appropriate assumptions that were incorporated into the CIC’s proposed business plan and filed with regulators. Initially, Pinnacle performed a comprehensive analysis of the current PPLI market to develop base rates, rating factors and underwriting guidelines. On an annual basis, Pinnacle re-evaluates the base rates and rating factors and recommends adjustments to reflect current trends in the market as well as credible indications borne out of the CIC’s experience. In addition to maintaining adequate rates for the program, Pinnacle has also been retained to perform the annual analysis of unpaid loss and expense reserves. The CIC’s annual reserve analysis includes a review of policies written, premium collected and claims incurred by the CIC at the close of each fiscal reporting period. Management relies on Pinnacle’s analyses to ensure the financial health of this strategic venture.

Medical Malpractice PCF
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Medical Malpractice PCF

Pinnacle has developed an excellent working knowledge of patient compensation and birth-related injury funds in many jurisdictions, including Florida, Indiana, New Mexico, Ohio, Virginia, and Wisconsin. In several of these states, we not only complete regular rate indications and loss reserve analyses, we are frequently involved in legislative costing of proposed laws that may impact the fund. These proposed laws have included addition, modification and removal of damage caps, changes to primary coverage limits, revisions to program eligibility or mandatory coverage requirements, and program benefits changes. In all of these states, policymakers have benefitted from Pinnacle’s expert analysis, understandable reports and insightful advice.

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