Strong leadership, quality assurance programs and transparency are key considerations that affect insurance underwriting in senior living, according to an insurance expert.
Julie Bordo, president and CEO of PCH Mutual Insurance, provided a professional liability insurance perspective on the issue Wednesday during an Adelman Law Senior Living Empower Hour webinar.
Leadership influence on risk profile
Strong, effective leadership is critical in managing risk and enhancing the insurance profile of senior living communities, she said.
When deciding whether to insure a company, Bordo said, the process starts with the application, which provides a snapshot into an organization. But communication and trust indicators — responding in a timely manner, for instance — can go a long way.
Strong leadership reduces perceived risks by insurers, Bordo said, and effective management demonstrates a stable and low-risk environment to underwriters. Managers, she added, can have power over the narrative of a business by demonstrating how they manage risk.
“The application gives complete insight into where the insurance company perceives your risks lie,” Bordo said, adding that businesses should answer questions on the application honestly and then expound on things that make the organization not quite fit into a question or demonstrate a company’s uniqueness.
One way to demonstrate effective management and leadership qualities, she said, is to take advantage of resources and member benefits offered by the insurer. PCH, for instance, offers free documentation software to members, a private community where members can anonymously share issues, and negotiated risk agreements, Bordo said. Clicking on links to those resources and benefits demonstrates a manager is being proactive, she added.
Along with the application, Bordo said, it’s no secret that an insurer will perform an internet search on a company, look at recent inspection reports and consult any regulatory body that has public information on a company.
“We look at anything potentially out there, because it does demonstrate and tells us how you want to be seen,” she said. “As far as the third-party information, that is how someone else sees you and has knowledge of your industry.”
Staffing is another way to determine whether a senior living community has strong leadership, Bordo said. Evidence comes in figures related to staff retention, training and professional development opportunities at the operator, she said.
“Focusing on and empowering others lifts the entire enterprise to the benefit of everyone — the entity, the people who work with you, and the people you serve,” Bordo said.
Quality assurance
Adherence to regulatory standards — and robust quality assurance programs — are paramount to underwriting decisions, and leadership-driven quality assurance programs can improve insurability, she said.
Senior living, Bordo said, is “much maligned.” She noted trends in plaintiffs’ attorneys taking several actions to “drum up business.” Many, she said, are undertaking deep dives into publicly available information on senior living operators on the internet and using citations to invoke a professional liability claim, which she called “cyber ambulance chasing.” Inspections and citations that come up during litigation often don’t have a causal connection to the case at hand, but plaintiffs’ attorneys are using that information to “swipe a negative brush” against operators, she said.
Rebecca Adelman, founder of the Adelman Firm and Guide Path, added that she has seen a sophisticated use of publicly available data, particularly on the skilled nursing side, that is manipulated to create data points in cases against facilities.
“Survey and state inspections serve as a roadmap for them,” Adelman said, adding that much of that information is used in discovery and depositions, but an increasing number of judges are allowing that type of information into evidence.
“I’m seeing more judges willing to let it all in. There are things to be concerned about,” she said.
Adelman advised providers not to “let a good crisis go to waste.” Quality assurance programs can help companies address a survey problem or claim and get to the root cause of it to implement process improvement, she added.
Operational transparency
Operational transparency and consistent communication with insurers are key strategies for maintaining a favorable risk profile, Bordo said.
“We are transparent to our members, and we expect transparency from them,” she said, adding that companies are required to report incidents and claims, but their actions should go beyond that.
“We want our members to know that the more transparent they are with us, that actually reflects positively on you, your leadership, your integrity and, ultimately, your ability to work with us when there’s an incident, to prevent it from becoming a claim.”
PCH, she said, provides ancillary coverages to help its members pay defense costs related to regulatory intervention, cover criminal defense costs and provide employment liability defense.
“We do all of these things to encourage members to engage counsel, and we’ll make sure you have the assistance you need from the inception,” Bordo said. “Very few claims are meritorious. They are very much emotionally driven by things that have nothing to do with the efforts of the people caring for loved ones.”
