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Nevada Rural Hospital Partners Property Insurance Program
| Topics |
Hospitals and clinics
Networking and collaboration
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| States served |
Nevada
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| Description |
The Nevada Rural Hospital Partners (NRHP) have implemented a very simple hospital property insurance program intended to bring value to network members, and a revenue stream to networks. Although unrelated to the direct provision of healthcare, property insurance is one of those things that almost every facility needs. If a network can deliver a quality product with minimal effort and save its members money it’s one more way for that network to be of value to its members. At NRHP, they have found that group purchase property insurance (for hospital’s buildings and contents, business income interruption, etc.) is easy to administer, and generates sufficient savings to make the endeavor worthwhile.
This is an opportunity to join an existing group purchase property insurance program. Although networks can certainly create their own programs, the existing program is a much simpler way to provide lower cost coverage to members, and it’s an opportunity to take advantage of the purchasing power of a large group.
Identifying potential members and securing their interest is critical. Without adequate participation, the clout necessary to achieve a volume discount and competitive coverage terms does not exist. Minimum participation of $50 to $60 million in total insured value is a general guideline. (For reference, the average building replacement cost for Nevada hospitals is $270 per square foot not including contents.)
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| Services offered |
Few network resources are required. Since the network is not transacting insurance, licenses are not required. The role of the network is solely administrative. (See the section on implementation concerning an arrangement with a broker.) Network resources for start up involve a few hours to interface with the broker/consultant and network members in order to ensure that members understand the program and provide the information necessary for a quote.
Information from members includes the usual description of property (square footage, usage, type of construction, etc.) that any entity has to provide to any property insurance carrier. The network also earns its administrative fee by billing and collecting premiums and forwarding the appropriate amounts to the involved broker, so some staff resources are involved on an on-going basis.
Nevada Rural Hospital Partners collects a small administrative fee for acting as the purchasing conduit; consolidating underwriting specifications, managing the collection of underwriting applications, billing and collecting premiums and forwarding the appropriate amounts to the involved broker, and disseminating program information.
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| Results |
NRHP’s property insurance program started July 1, 2005 with three members and a total insurable valuation (TIV) of roughly $50 Million. (TIV reflects the replacement cost for the hospital facilities, including buildings and contents.) The total new cost for coverage was 47% less than the prior total cost and we significantly increased the level of coverage provided. Your experience may differ, although savings of 20% to 40% is not unusual. They expect additional enrollment in 2007. |
| Replication |
The process of implementing the program was simple. It involved contacting members, ensuring receipt of the members’ information concerning their facilities, forwarding that information to the broker/consultant, and facilitating communication throughout the process. Implementation also involved setting up the billing and accounting functions. |
| Source |
National Cooperative of Health Networks (NCHN)
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| Contact person |
Laura Donnell, Dir. Program Mgmt.
Nevada Rural Hospital Partners (NRHP)
Phone: (775)827-4770
E-mail: laura@nrhp.org
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| Date added |
August 9, 2007 |
Summaries of success stories are provided by RAC for your convenience. Please contact the success story contact person directly for the most complete and current information.
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