HNU Healthcare Management Insights #56

Hospital liability insurance has been under pressure for some time now: rising claim amounts, market consolidation, and noticeably higher premiums. In your view, what are the implications of this for the strategic planning of a hospital chain?

Julian Haselow: In my view, market developments over the past few years have clearly shown that we need to be open to alternative insurance models and should be prepared to explore options beyond established approaches. Some time ago, Sana had the opportunity to switch from a traditional occurrence-based insurance model to a claims-made variant, which, due to the nature of the model, provides liquidity advantages. In my assessment, long-term planning certainty—achieved through contract terms that are as long as possible and a trusting, equal partnership with the insurer—is crucial. As the Sana Group, we rely on the long-standing support of our insurance broker, who guides us through this planning process and identifies potential solutions. In addition to securing comprehensive insurance coverage, our goal is to consistently leverage economic advantages.

Loss ratios in liability insurance have been rising steadily for years. In your view, what role does proactive internal risk reporting play in identifying, assessing, and effectively managing potential liability claims at an early stage?

Julian Haselow: At Sana, because we’ve opted for the claims-made approach, we rely on a combined system that includes both the reporting of regular claims and the recording of so-called “circumstance reports”—that is, the proactive detection of potential liability cases based on various case groups. To identify potential “circumstance reports,” we have defined case groups in close collaboration with quality and clinical risk management. These groups are used to detect, analyze, and, if necessary, forward potentially harmful situations to the insurer—even without a specific claim having been filed by a patient or their representative. In my experience, these can include, for example, critical case scenarios generated from billing data. The occurrence of so-called safety-related events listed on the Never Event List—such as patient or medication mix-ups—would also provide indications of the need for a case notification. In addition to being reported as part of an incident report, these cases are analyzed by the Quality and Clinical Risk Management department with the goal of, on the one hand, enhancing patient safety and, on the other hand, avoiding liability risks and reducing claims costs in the long term.

For insurers, the internal risk culture is of central importance. What specific measures can hospitals take in the areas of patient safety, quality management, and process standardization to demonstrably strengthen their insurability and optimize contract terms?

Julian Haselow: I am convinced that improving patient safety has an indisputable impact on the long-term insurability of liability risks in the hospital sector. In addition to structural data on the hospital itself, I believe that the implementation of measures and the resulting implications for insurability also play a decisive role. In my assessment, it is therefore of considerable importance that a hospital systematically addresses incidents that have occurred using established tools of quality and clinical risk management, analyzes them, and, where necessary, derives measures for the long-term improvement of existing systems. Morbidity and mortality conferences, case analyses, and the evaluation of fall statistics are just a few of the many possible tools that can impact the insurer’s claims burden and, consequently, the insurability of liability risks. However, in addition to their use within the framework of structured insurance management, these tools primarily and specifically serve to enhance patient safety.

In light of rising premiums, some hospitals are turning to higher deductibles and self-insured retention (SIR) models. What opportunities and risks do you see in such self-insured models, and under what conditions do they make sense for hospital chains?

Julian Haselow: Self-insurance models offer hospital chains opportunities to reduce overall risk costs and provide immediate liquidity benefits, which is a particularly important consideration in times of strained and uncertain hospital financing. With SIR solutions, the hospital handles claims processing itself or through a contracted service provider, up to a defined limit. This enables additional premium savings and greater decision-making flexibility. The situation is similar with deductibles of any amount, although in this case claims processing continues to be handled by the insurer, even within the deductible limit. However, both models—particularly in the case of higher deductibles—require robust financial sustainability. In addition, if the hospital is a nonprofit organization, tax implications must be considered, and compliance with the requirements for mandatory malpractice insurance for physicians, as well as the need for a professional reserve assessment, must be verified. In my view, whether dealing with a SIR or a deductible—or in combination with a claims-made model—the organization should be structurally capable of leveraging the potential for improving patient safety associated with such an insurance model. Therefore, I believe it is important not to focus exclusively on the cost reductions associated with such a model, but rather to holistically evaluate and implement such a transition by considering economic, structural, and patient safety aspects. All of this requires close and coordinated collaboration between the hospital, the appointed insurance broker, and the insurer in both contract management and claims management.

Professional claims management can not only reduce costs but also help prevent future liability cases. In your view, what role does structured claims management play, and how should the collaboration between the hospital, the insurer, and attorneys ideally be structured?

Julian Haselow: Professional claims management goes far beyond mere claims settlement. Rather, it is a key learning tool for risk prevention. Every liability case—whether a claim has already been filed or is merely suspected—should be systematically analyzed. In my view, the following questions are important: What was the root cause? Which processes failed? Are there structural anomalies or patterns of recurrence? The insights gained from this analysis must be directly incorporated into quality and clinical risk management and lead to measurable preventive measures. Collaboration between the hospital, the insurer, and specialized medical malpractice attorneys requires clear lines of communication, defined escalation procedures, and, in particular, joint case reviews for complex claims. Practice has also shown that early, empathetic communication with affected patients can be of enormous importance. Through transparent dialogue and the prompt acknowledgment of legitimate claims, protracted legal disputes can be avoided. In my view, this leads to a reduction in claims costs over the long term and also minimizes potential reputational damage.

Thank you very much for the interview!

The content and statements presented in the interviews reflect the perspectives of the interviewees and do not necessarily represent the editorial staff's position.