The Lee Memorial Health System is considering a captive insurance model to safeguard itself against payouts such as the $15 million claims bill it had to settle earlier this year.
Traditional insurance is also on the cards, from Chartis with a $1.2 million premium to AWAC/Torus with a $952,000 premium.
Hospital spokeswoman Mary Briggs said that a third alternative, the captive model, would mean ‘alleviating the middle man', whether it meant forming an insurance company and paying premiums to the internal company, or joining a group that has an existing captive insurance group.
Richard Akin, Lee Memorial's board chairman, added that the board’s current preference for the captive model may alter after going through the costs.
"The biggest reason for trying to pursue the captive model is we have heard you can buy reinsurance for up to 30 percent less but it is risk-specific. You must define your risk," he said. "For a company the size of Lee Memorial, I think potentially it could save a lot of money. I don't know, but that will drive our decision."
