Risk Management: It’s not just insurance . . . it’s smart business

By | March 15, 2011

By Bob “Red” Hollingsworth of The Buckner Company

The Buckner Company is a Utah-based insurance agency. When it comes to insurance, we do it all: Commercial Insurance, Employee Benefits Personal Home and Auto Insurance, etc.

The other day I read a short article “A Bad Deal on Malpractice” the article discusses the importance of malpractice on Medicaid in the state of NY. Whether or not you agree with the article, my desire is to draw your attention to the reference of New York Presbyterian Hospital/ Weill Cornell Medical Center and the overwhelming improvement they experienced in their malpractice claims when they simply stopped buying insurance and looked at the correlation between the cost of malpractice claims, premiums, patient care, and employee morale. By making the most of risk management fundamentals they accomplished phenomenal results. They focused on simple things like employee surveys, and then cross-checked claim trends with perceptions and changed staff training to achieve desired outcomes, better electronic documentation, and follow-up. They collecting the right data, reviewed the data results, and took corrective action.

The Hospital cut its expenses to defend legal claims and payments for compensation by 90%. From 2003 to 2006, their average expense load was $27.59 million; by 2009 it dropped to $250,000. THAT’S A 99% REDUCTION IN COST. You don’t achieve these kinds of results by giving your insurance information to four agents, getting bids, and then making your decision based on the lowest premium. Getting a new policy is like getting a new set of golf clubs. The new clubs do not assure improvement in your game; you must work on the fundamentals of your swing. With time, you see improvement. Insurance companies don’t like to lose money. Insurance is simple financing. The better job you do at reducing claims, the lower the cost of your financing.
You don’t have to be the size of New York Presbyterian. If you area small to mid-size company, profit or nonprofit, you will have some opportunities to reduce your cost and losses maybe even by 90%. Keep in mind that every dollar we save on the expense side can be allocated back to your business. The secret is to stop buying insurance and talk with an insurance professional who, along with their firm has skill and experience in Risk Management. A talented insurance agency can help identify risks, threats, and dangers to your company, coming up with smart intuitive strategies to reduce cost, headaches and improve outcomes. By choosing to work with a Risk Manager as part of your insurance purchase you will have better employee productivity and profits to your bottom line.

For those who are nodding your heads believing that this is not only possible, but utterly essential for the survival of your business in these economic times, give me a call at The Buckner Company. I especially suggest that you take a close look at your workers’ compensation coverage. There are many ways to use risk management to improve your outcomes. Workers’ compensation is riddled with employee injuries, surcharges, incorrect experience modification factors, as well as errors in the W/C audit process.

It’s not just insurance… It’s smart business.

For more information on the services we offer, please see our corporate website at www.Buckner.com.

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