MANAGING COMMISSIONING INSURANCE
Risky business
With rising litigation costs and increased scrutiny on CCGs as they officially take the reins in April, insurance is something that the newly formed groups must get right. GEORGE CAREY looks into managing the risks involved
W
hile the rules of insurance may not have changed significantly for CCGs, there is still plenty to
think about for those looking to safeguard themselves against the future. Clinical negligence claims inflation is rising at 10% per year, and in 2011 the NHS Litigation Authority (NHSLA) paid £1.2bn in compensation, a rise from the previous year’s figure of £863m. Its estimate of its total liabilities in 2011 was £16.7bn. Proof if it were needed that the costs involved with any negligence legal action can be crippling. Also, some are starting to lose faith with the NHSLA, with Lancashire Care Foundation Trust, last year, becoming the first to serve notice on its membership of the authority’s clinical negligence scheme. Some trusts have complained that they pay more for their cover under the scheme than is paid out on their behalf, effectively, “subsidising others” by remaining part of the risk pool as Lancashire’s finance director, Dave Tomlinson, put it at the time. While it is yet to be confirmed if the NHS Indemnity scheme will be made available for CCGs to join, the increasing unrest of some trusts raises questions about whether they would want to. So what is the best way for CCGs to proceed?
POOLING
There are obvious benefits for CCGs choosing to pool their financial risk, but this approach is not without complications, as Charly Ross, project manager at James Hallam Insurance Brokers, explains: “If insurance is purchased through the general market, it would certainly help with pricing if CCGs in their local area group joined together for buying power. Each risk would have to be separately rated, however, as they are separate legal entities, so a multi CCG policy would not be available.” She continues: “We would suggest that CCGs enlist a broker with risk management services to carry out an audit of their proposed risks with a view to a pricing and comparison exercise with the NHS Indemnity Scheme. This will ensure that the CCG has peace of mind that they are adequately covered for all areas.” Another cautious advocate of CCGs
pooling their risk is Joanne Buckle, principal consulting actuary at Millman, who thinks that the commissioning board will provide some form of risk pooling function, probably as an insurer of last resort, but this may not be comprehensive enough for some smaller CCGs. Buckle sees two concepts as being fundamental to maintaining equity among pool participants. “Pool participants should not be able to select against – or game –
68 |
WWW.COMMISSIONINGSUCCESS.COM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72