Global Captive Management
latter, it’s important to evaluate whether the claims relate to a particular
specialty or institution. The level of scrutiny on loss development
at the captive level helps the healthcare system to identify areas of
concern and focus its remedial efforts accordingly. Such remediation
may include enhancements to people, institutions, or resources at the
parent and/or captive level.
Is this thermometer still relevant? Are healthcare captives still an
important risk management tool? The answer is yes, more so than ever,
if properly structured and managed.
The healthcare model has changed significantly in the last 10 years.
Hospital systems used to be modelled as providers of community-based
care housed in sprawling campuses. Long stays, handwritten charts
and bad food were the norm. In the present day, healthcare systems
focus on the provision of value-based services along a continuum of
care; ie, managing care for patients through a comprehensive array
of health services through their lifespan with care provided by minute
clinics, urgent care centres, diagnostic centres and hospitals, as well as
rehabilitation and other tertiary facilities.
This allows the hospital system to focus its services on provision
of core or specialty treatment and true emergency services. Nonemergency
care and routine care can then be handled by the tertiary
Horizontal and vertical integrations are leading to an unprecedented
level of mergers, acquisitions, joint ventures, and other non-equity
collaborations. Digital healthcare is replacing handwritten notes and
personal visits to the doctor with the utilisation of electronic medical
records (EMRs), and systems of telehealth, remote monitoring, and
wearable technology. Healthcare systems focus on population health,
with the goal of providing better care at lower costs.
And everyone is using the fun new buzzword, disruption. The Oxford
dictionary defines disruption as “disturbance or problems which
interrupt an event, activity, or process”. And while disruption has a
negative connotation on its own, disruptive innovation can be a positive
thing. Wikipedia defines disruptive innovation as “a term in the field
of business administration which refers to an innovation that creates
a new market and value network and eventually disrupts an existing
market and value network, displacing established market leading firms,
products, and alliances”.
In the healthcare industry, this disruption includes changes to
executive management as CEOs and CMOs retire and the younger
generation take the reins; a focus on strategic growth both horizontally
and vertically, not for the sake of growth itself, but in terms of population
health and operational profitability; and emphasis on innovation where
physicians are allowed to brainstorm and create better processes and
Just as the healthcare industry is in disruption, so is the healthcare
captive structure. While still functioning as a measurable risk
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