Blazing Trails In Allied Health

CNA's HealthPro unit delivers savvy solutions to this expanding market

Americans are big on convenience in almost every aspect of life, from grabbing a fast-food meal instead of cooking to ordering merchandise online and avoiding crowded shopping malls. Online banking, pay at the pump, and self-serve checkout are just a few more ways that Americans in a hurry can get what they need at super speed.

When it comes to health care, that passion for convenience is evident in the proliferation of walk-in clinics, urgent care centers, and day surgery facilities throughout the United States. Why sit for hours in a packed and noisy hospital emergency room to get your sprained ankle X-rayed when you can go to a nearby urgent care facility and be seen and treated within half an hour-without the high ER co-pay and the endless paperwork, not to mention the stressinducing atmosphere?

Diagnostic studies like X-rays, CT and PET scans, and MRIs can be done at local imaging centers, faster and often at less cost than hospitals charge. The same is true for day surgery centers, where procedures like routine knee arthroscopy and trigger finger surgery can be performed safely and less expensively.

It's not just consumers who like the convenience and cost savings of urgent care facilities, walk-in clinics, and imaging centers; they enjoy strong support from health insurers that view these and other allied health care providers as attractive, cost-saving alternatives to hospital-based care for routine illnesses and injuries.

Leading the way

A leader in developing insurance and risk management solutions for the rapidly expanding allied health care market is CNA Insurance, which has been serving the health care field for almost 45 years (see "Leading the Way in Health Care Liability" in the October 2008 issue of Rough Notes).

"We continue to see growth in the allied health care sector for a number of reasons," says Andrew Shapiro, senior vice president of CNA HealthPro. "People have become more accepting of the idea of using these facilities instead of going to a doctor's office or the hospital. They're more convenient, and ease of access is a big factor, especially in rural areas where a hospital may be quite far away. There are some cost advantages, and we're seeing greater acceptance of allied health providers by third-party payors, most of which are health insurance companies," Shapiro says.

Some consumers worry that the quality of care they receive at a local urgent care clinic may be below the standard of a hospital or traditional physician's office. Shapiro offers reassurance: "For the most part, we're seeing the same sorts of quality outcomes and frequency of claims in allied health care facilities that we see in other settings like hospitals and doctors' offices. From our perspective, it's very significant that patients are receiving an acceptable quality of care and results from allied health care providers," he asserts.

"Even absent the impact of the Affordable Care Act, we would have seen a fair amount of growth in the allied health care sector," Shapiro continues. "Because of the act, however, many more people will have insurance over the next five years, and there's going to be a greater need for primary care that I don't think can be met by the current physician/ hospital structure.

"For all of these reasons, we anticipate continued growth in the allied health care sector," Shapiro says. "We've been in this market from the start, and we intend to play a significant role as that growth continues."

Defining the market

The allied health field encompasses a wide range of facilities and providers. "When it comes to allied health care, it seems that almost everybody has a different definition," says Maureen Maughan, assistant vice president of allied health care at CNA. "For CNA's purposes, allied health does not encompass hospitals, nursing homes, physicians' offices, or dental offices. The risks we insure are outpatient facilities." Specifically, it includes those listed in the sidebar on the right.

CNA's core coverages for allied health care facilities are general liability and professional liability, employee benefits, and excess/umbrella. Also available are commercial automobile, directors and officers liability, employment practices liability, property, cyber liability, and workers compensation.

Top growth areas

"As Andy mentioned, we anticipate continued growth in allied health care facilities because of the Affordable Care Act," Maughan notes. "One area where we've seen a lot of growth is community health centers. These centers currently serve about 20 million individuals. Over the next few years, the federal government is going to fund these centers with about $11 billion. We expect that by 2015, the number of individuals served by community health centers will be double what it is today," Maughan asserts.

"Another area where we're seeing growth is urgent care centers. These are great because they're usually open seven days a week and the hours are nine to nine, so they're convenient for patients who don't want to go to the emergency room," Maughan explains. What's more, she points out, "You don't even need an appointment.

"Urgent care centers handle acute medical problems," Maughan continues, "but generally those on the lower end of the spectrum. Some facilities have X-ray equipment for diagnostic purposes. If an X-ray shows a break that needs the attention of an orthopedic physician, the urgent care center refers the patient to a qualified practitioner."

According to the Urgent Care Association of America, Maughan comments, there are currently about 9,000 urgent care facilities throughout the United States, and it's expected that this sector will grow by about 3% to 4% per year. The association estimates that about 300 new clinics are opening each year.

Also showing strong growth are minute clinics in pharmacies and retail stores, which are usually staffed with one or more nurse practitioners.

"Another area where we're experiencing growth is home health care, as huge numbers of Baby Boomers move into retirement," Maughan remarks. "The U.S. Administration on Aging is saying that by 2030, the number of Americans age 65 and over will double to 71 million, or about 20% of the U.S. population. I think we'll continue to see growth in that area because of the huge influx of Baby Boomers."

Imaging centers save time and money

Also expanding at a rapid pace, Maughan points out, are imaging centers. "The aging population requires more intensive medical care, encompassing both diagnostic and therapeutic interventions. MRIs, CT and PET scans, and other sophisticated imaging technologies can find diseases at an early stage so that the patient can begin to receive treatment.

"If a high-quality imaging study can be done at an outpatient clinic for several hundred dollars less than a hospital would charge, clearly that's the direction insurance companies will be going," Maughan asserts.

Pointing to another area of growth in CNA's allied health care portfolio, Maughan cites the proliferation of day surgery centers. "Over 2010 and 2011, our market share in this segment increased significantly. A number of surgery centers are Medicare certified, and they've grown about 5.8% per year. The growth is beginning to level off, but we anticipate future growth in the range of 1% to 2% a year," Maughan says. "In 2008 Medicare made changes in its payment system, so that's likely why we haven't seen the same high growth we observed before 2008."

Surgery centers perform routine procedures like colonoscopy, endoscopy and arthroscopy, and some centers perform the lap band procedure. To Maughan's surprise, she says, "I found out that the numberone procedure that's done in surgery centers is cataract surgery. I wouldn't have believed it, but it makes perfect sense given the aging population." Many older Boomers now undergo arthroscopic surgery at an outpatient center when the cartilage in their knees has become dry, torn, and painful. Rarely is general anesthesia used and, barring complications, the patient goes home a few hours after surgery.

Another area where CNA is seeing significant growth is hospice care. "According to the Centers for Medicare and Medicaid, hospice care is growing by about 5% a year, and I think we'll see continued growth in this area," Maughan says.

Hospice care is delivered in a variety of settings. Some patients prefer to stay at home, where they receive hospice services through either a hospital's hospice unit or from an independent hospice facility. In other cases, as when family members are unable to care for the patient at home, he or she may move into a residential hospice facility. Some hospitals and nursing homes have hospice wings for terminally ill patients. CNA provides coverage for these facilities.

Underwriting pros

With its keen focus on health care risks and its 45-year history of serving this challenging market, Maughan says, CNA is proud of its best in class underwriting team. "Our average underwriter has 15 years of experience. Many of our underwriters come from other insurers, and they bring a fresh perspective on the classes we write. As a result, we can be flexible, and we have the expertise to analyze exposures so we can tailor our coverage to meet their needs," Maughan asserts.

Adds Shapiro: "When we started writing allied health facilities seven years ago, we were cautious about entering a number of different classes that were new to us. As we became more familiar with those classes, we realized that they represented a whole new field of prospects whose needs we could meet. We've steadily improved our ability to analyze the risks inherent in facilities that are performing different kinds of procedures, and we have a sharper grasp of the market segments we want to pursue as well as those we prefer not to become involved in," Shapiro says.

Examples of classes CNA prefers not to write, Maughan explains, are ambulance companies, any type of outpatient emergency department that is not affiliated with a hospital, inpatient mental health facilities, and staffing agencies for home health care.

As the allied health care field continues to grow, CNA understands the trends that drive this challenging market and is committed to developing products that its agents can present to prospects with confidence.

For more information:

CNA Insurance Web site: www.cna.com

"It's very significant that patients are receiving an acceptable quality of care and results from allied health care providers."

-Andrew Shapiro Senior Vice President CNA HealthPro

"If a high-quality imaging study can be done at an outpatient clinic for several hundred dollars less than a hospital would charge, clearly that's the direction insurance companies will be going."

-Maureen Maughan Assistant Vice President CNA Allied Health Care

CNA's allied health risks

Among the facilities for which CNA provides coverage are:

* Ambulatory surgery centers

* Behavioral health centers providing outpatient services

* Cancer treatment centers

* Community health centers

* Dialysis centers

* Home health services, including homemaker/companion, skilled medical care, and visiting nurse associations

* Hospice services

* Lithotripsy centers

* Medical laboratory services

* Pharmacies

* Radiology services, including noninvasive services such as CT, MRI, and PET scans

* Rehabilitation services, including trauma rehabilitation and occupational, physical, and speech therapy

* Schools, including medical, dental, optometry, and allied medical health professionals

* Student health centers at colleges and universities, and substance abuse counseling centers

By Elisabeth Boone, CPCU