Timothy McCormick
Warren Hern

The ability to share information regarding patient safety events led to reduced medical malpractice costs, enhanced patient safety, and improved quality of care for one captive insurance company's members.

At a Glance

There are four key components to the success of HCCI, a captive insurance company formed by five healthcare systems:

  • Common and aligned goals
  • A commitment to ongoing education
  • Open and honest dialogue among member-owners
  • Easy-to-use technology to support information flow and decision making

In January 2003, five regional healthcare systems came together to address a common set of problems: how to improve patient safety, advance the quality of healthcare delivery, and enhance the financial stability of their operations. They also sought solutions to another critical issue facing their organizations: how to manage and insulate themselves from the volatility of the commercial medical malpractice insurance marketplace. 

The organizations-Unity Health System, Rochester, N.Y.; Moses Cone Health System, Greensboro, N.C.; Health First, Inc., Rockledge, Fla.; Tallahassee Memorial HealthCare, Tallahassee, Fla.; and Touro Infirmary, New Orleans-formed Health Care Casualty Insurance Limited (HCCI), a group-owned professional liability insurance company. In forming HCCI, these organizations sought to balance rising professional liability costs with the need to make substantial investments in patient care and patient safety systems. The concept of a captive insurance company also gave the health systems a tool with which to effectively navigate the patient safety arena while offsetting potential liability and medical malpractice costs.


Aligning Common Goals

HCCI has rigorous underwriting, finance, and claims management systems in place to function as a high-quality insurance company. Its members place a significant emphasis on patient safety, which has mitigated the organizations' overall exposure to risk.

Although most captive insurance companies are formed for the sole purpose of managing medical malpractice premiums, the CEOs who formed HCCI understood that an insurance program alone would not help their organizations increase the quality of healthcare delivery. Instead, these healthcare providers linked common objectives around patient safety and quality of healthcare delivery to effectively manage their liability exposure. They understood that the root cause of potential liability is harm to the patient, and if they were to focus on reducing harm, they could reduce their organizations' liability and protect their organizations' assets from potential medical malpractice litigation.

HCCI reflects an interesting and effective risk management model, with each owner taking a big risk in linking its potential liability exposure to that of other organizations. For HCCI to be successful, each organization must focus on proactively managing the underlying quality of its healthcare delivery system and demonstrate a commitment to risk management, patient safety, operational quality, and claims and process management. Members leverage their experiences to share and promote:

  • Benchmarks and best practices
  • Education and training on timely topics
  • Accountability for creating quality initiatives
  • Open and honest communication
  • Technology to detect potential problems
  • Empowerment of physicians and nurses within and among the group to become patient safety change agents

HCCI's success depends not only on its members' commitment to these common goals, but also their dedication to a long-term view.

Members of HCCI take part in educational programs on patient safety and improving quality of care together-both face-to-face and via webinars-and meet to share best practices several times throughout the year, with concrete recommendations that can be applied quickly and effectively. Ultimately, these programs have led to process and procedure changes within HCCI-member organizations, which have enhanced quality of care and patient safety at each organization. Participants include the organizations' CEOs, CFOs, chief medical officers, and risk managers.

The commitment to sharing information and learning new ways to promote quality and safety management helps to reduce the organizations' risk-and establishes HCCI as a patient safety resource as well as a liability insurance carrier. For example, in a recent program focused on best practices in radiology, one member discovered inconsistencies in how critical radiology results were communicated in the organization. This led to a policy change in which radiologists are expected to communicate critical test results directly to the ordering provider.


A Resource for Implementing Change

HCCI members also engage in structured discussions on topics such as how to implement change, how to create empowerment, and how to value a professional liability claim. These face-to-face meetings allow for the building of personal relationships that lead to pertinent communications among hospital groups. For example, after Hurricane Katrina, Touro Infirmary's senior executive team met with HCCI CEOs to discuss patient safety and quality lessons learned from Katrina, such as how to track down coworkers and bring them back to the organization for assistance, how to monitor supplies, and how to maintain billing and collections after a natural disaster.

At the board level within HCCI, members work as a group to identify quality and safety challenges in key areas and develop efficient strategies to overcome these challenges. During board meetings, members openly discuss quality and safety initiatives and review claims reported to the company. Each organization's data and information are transparent to the other member organizations, which creates a stronger focus around patient safety and quality delivery: No member wants to be singled out as not pulling its weight or not displaying a commitment to excellence.

HCCI also uses a web-based systemwide event reporting and data management tool at each of its organizations that removes the burden of inefficient paper-based processes from nurses and physicians, eliminating a bottleneck that can contribute to poor quality issues. The intuitive interface of this tool makes it easy and efficient for physicians and nurses to enter events, near misses, patient complaints, and additional quality and safety data. This technology helps to improve communication within the HCCI organization by providing for immediate notification to a team of healthcare professionals. It also enables HCCI members to react, provide appropriate follow up, and collaborate with each other when patient safety events and near misses occur.

For example, last year, an HCCI member hospital experienced a near-miss event during the insertion of a central line to administer radiation dye to a patient. The event was recorded through the HCCI event-reporting tool, and the pertinent people were immediately notified. Within one hour of the incident, the right individuals within the hospital were gathered to discuss the situation, evaluate options for improvement, and institute a process change to prevent future incidents. 

One of the strengths of HCCI's event reporting and data management tool is its ability to quickly inform the right people about priority safety initiatives in a hospital at the right time. By providing HCCI members with a way to easily identify areas of risk, quality, and safety management exposure, members can address concerns through process changes that are made in a timely and focused manner. This results in higher-quality care and a safer environment for patients, visitors, and staff.

Data Drive Positive Changes

HCCI's systemwide event reporting and data management tool also supports a clear commitment to enhancing quality through customized reporting tools that enable organizations to access and analyze information to spot trends and patterns that could lead to adverse events. It is one thing to hear sketchy details about a medication error via a hallway conversation; it is another to be able to pull an actual report that identifies the trend of a specific medication error happening with a given drug, unit, and/or shift. This type of instant analysis brings potentially adverse trends to the surface faster, allowing hospitals to quickly put together a collaborative task force or action plan to address such trends.

Other issues come to the surface as well via HCCI's systemwide event reporting and data management tool. For example, the code blue button in a unit of one of HCCI's member hospitals was located near a patient's headboard, and too often, this button was accidentally hit, creating false alarms that disrupted the unit. These events were captured with the event reporting and data management tool, through which nurses on the unit were able to track the number of false alarms in a given time period and were able to justify a location change for the code blue button. Changing the location of the button saved nursing time and lessened patient interruptions.

Changes in Hospital Culture

One of the most important outcomes of implementing the systemwide event reporting and data management tool at each member's organization has been the ability to change the culture and language around patient safety within HCCI's healthcare organizations. Today, employees at these healthcare organizations see events as opportunities: They want the event to surface because they know someone will listen and respond. This attitude also is reflected among the organizations' medical staffs, which traditionally have been reluctant to report events because paper reports were time-consuming. In many cases, physicians find the tool so easy to use that they no longer have to be nudged to record events, and often have asked for other quality triggers to be added to the event descriptions so they can receive notification as well.

One reason why the tool works is because it is not just another reporting mechanism that leads to disciplinary action. Rather, it is an opportunity for users to become difference makers and help hospitals root out errors. The tool gives HCCI member organizations the opportunity to capture and communicate understanding of clinical and service events across their organizations. This critical information leads to process changes that ultimately result in enhanced quality and safety.

Lessons Learned

The success of HCCI is due in large part to the significant attention its members place on patient safety, which has mitigated its members' overall exposure to risk. The systemwide event reporting and data management tool adopted by HCCI also has contributed to many other positive outcomes for its members: supporting a blame-free culture, strengthening members' ability to attract and retain top talent, enhancing each organization's reputation among its peers, and establishing a stronger relationship within the communities each member serves.

As a group, HCCI's member healthcare systems can point to significant ROI that goes well beyond insurance dollars saved. There are four key components to HCCI's success:

  • Common and aligned goals
  • A commitment to ongoing education
  • Open and honest dialogue among member-owners
  • Easy-to-use technology to support information flow and decision making

By taking the initiative to become proactive champions of their own businesses, the founding members of HCCI no longer separate the efforts of sustaining a culture of safety and transparency from the management of professional liability risk. The true beneficiaries of this approach to patient safety and professional liability are the patients, staff, and communities these organizations serve.


Timothy McCormick is president and CEO, Unity Health Systems, and chairman, Health Care Casualty Insurance Limited, Rochester, N.Y. (tmccormick@unityhealth.org).

Warren Hern, FHFMA, is executive vice president and CFO, Unity Health Systems, Rochester, N.Y., and a member of HFMA's Rochester Regional Chapter (whern@unityhealth.org).

HCCI wishes to thank Anna Hajek, president, Clarity Group, Inc. (amhajek@claritygrp.com), for her assistance in the preparation of this article.

Publication Date: Wednesday, July 01, 2009

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