Our Family of Companies began with a problem in 1976 – the first medical malpractice crisis. That problem was taken up with the state legislature by the Missouri Hospital Association and resolved via the creation of Missouri’s first Chapter 383 hospital group self insurance company which has operated continuously, known today as the Missouri Hospital Plan, and has been the leading provider of medical professional insurance in Missouri since its creation.
CRISIS LOOMS as medical malpractice claims begin to have an effect on the financials of the commercial insurance companies then willing to insure healthcare providers; large judgments began to become commonplace. Insurer’s reacted by abandoning the market, leaving hospitals and physicians to deal with a problem the insurers helped to create. MHA responded in 1976 by taking the problem up with the legislature which passed Chapter 383, allowing for the creation of assessable group self-insurance associations, known as “bedpan mutuals.” The Missouri Hospital Association takes the lead in forming a “383” mutual dedicated to insuring its members – Missouri Professional Liability Insurance Association (MPLIA) – the predecessor of the HSG Family of Companies.
CRISIS II LOOMS as jumbo verdicts in medical malpractice cases gain nationwide publicity and insurers, like MPLIA, which issued “occurrence form” policies, find that substantial rate decreases in recent years did not meet actuarial loss projections for future years because of the long tail loss exposure inherent in occurrence coverage. At the same time, those commercial insurers that had returned as the market softened in the 1980s, when companies like MPLIA caused prices to stabilize, abandoned the healthcare market once again.
At the urging of MHA and MPLIA, the Missouri Legislature passed Tort Reform which included caps on losses, required healthcare affidavits and modified “joint and several” liability.
MPLIA management returned to the drawing board along with MHA to form new companies:
Providers Insurance Consultants, Inc. (ProCon) was formed to address the problem associated with bundling our insurance products with those offered by other insurers. It was constructed as a wholly-owned subsidiary of HSG that provides insurance brokerage services exclusively to healthcare providers. Today, ProCon offers quality programs for professional liability, property, workers’ compensation, directors’ & officers’ liability, cyber liability and more.
Missouri hospitals found it nearly impossible to find reasonably priced workers’ compensation insurance, ProCon addressed the problem by forming a group self-insurance program (HAT) that continues to serve Missouri hospitals.
Missouri hospitals can no longer find affordable Workers’ Compensation insurance. At the urging of MHA, HSG forms the MSC Workers’ Compensation Trust allowing Missouri hospitals to self-insure much like MHP. The program is successful and eventually pays dividends to members. In 2003, after an unsuccessful merger, the trust reemerges as the Hospital Association Trust (HAT).
Medical Liability Alliance (MLA) was formed as a subsidiary of MHP to insure hospitals and healthcare providers who do not qualify for coverage in MHP. The time period also coincides with another soft market condition that finds many commercial insurers returning to the medical malpractice sector by pushing “cash flow underwriting” – a condition where an expectation of significant investment income causes insurers to undercharge.
CRISIS III LOOMS as the Eastern District Court of Appeals affirms Scott v. SSM Healthcare, effectively eviscerating the 1986 Tort Reform and igniting another hard market. Predictably, once again, the commercial insurers abandoned their policyholders when their cash flow underwriting strategy failed, leaving companies like MHP and MLA to come to the rescue. At the same time, following an unsuccessful business combination brought about by the soft market, the HSG Companies reform and regain their lead in serving the insurance needs of Missouri’s healthcare community.
In response to a shortage of affordable insurance for physicians, several new 383 companies are formed and MLA, the only non-assessable state domiciled medical malpractice insurer, is called upon by its hospital owners to offer insurance to physicians on staff at MHP hospitals. BJC HealthCare makes a major investment in MLA, which increases its financial capacity to insure independent staff physicians not insurable by MHP.
Tort Reform is passed once again, capping non-economic claims, strengthening the affidavit requirement as a precondition to filing suit, limiting damages to those actually paid and modifying joint and several liability. HSG was a vocal advocate for reasonable reforms in the three years leading up to its passage.
Several small hospitals report to MHA that their employee health insurance is becoming prohibitively expensive. In response, MHA looks to HSG for a solution. HSG leverages its relationship with, and eventually endorses, Wallstreet Insurance Group to create the Healthcare Services Employee Benefits Consortium, which allows hospitals to collectively negotiate favorable healthcare reinsurance and competitively priced life and disability insurance.
At the same time, HSG endorses Tax Favored Benefits to assist its clients with retirement and pension plan solutions.
The MLA Board approved the creation of the Quality Caregiver Profit Sharing Plan to reward loyal policyholders when MLA is profitable.
The Healthcare Services Group Charitable Foundation (HSGCF) was established to help fund healthcare programs that advance the quality of patient care, patient safety, and community wellness. The initial program matched scholarships provided by MHP member hospitals to students pursuing careers in the medical field and support specialties. The goal is to help fund education of locally talented students planning to return to hometown communities to work in the medical field upon graduation. Helping hospitals cultivate prospective healthcare employees is just one more way the HSG Family of Companies strives to fulfill its mission.
The HSG Family of Companies and their strategic partners continue to meet the insurance needs of their healthcare clients by supplying quality insurance products, by advocating on behalf of policyholders in the legislature, by advancing a culture of patient safety, by returning profits to members and quality caregivers and by listening to those they serve.
The Healthcare Services Group Charitable Foundation (HSGCF) program was expanded to provide matching scholarship funds to Medical Liability Alliance (MLA) insureds.