By Tami Scott
When New York healthcare decision-makers seek explicit answers to critical questions, their go-to source is Risk Strategies, founded in 1997 and now the ninth-largest privately held insurance broker in the United States.
Its specialist approach is what makes the company stand out from competitors. Each client is provided with specialty insight, practical advice and custom insurance options that can only come from industry experts who have spent years identifying trends and predicting outcomes.
It boasts more than 30 specialty practices and has a vast network of specialists in Property & Casualty, Employee Benefits, Private Client, Consulting Services and Financial and Wealth Management solutions.
“We strive to be a destination workplace, one where we attract and retain top talent and ensure that working life at Risk Strategies is fulfilling and rewarding and employees can realize their potential,” said marketing specialist Steve Whalen.
A financially sound company that exceeds $1 billion in revenue, Risk Strategies has more than 150 locations and more than 5,000 employees. For the past five years – 2018 through 2022 – Risk Strategies has been named by Business Insurance as one of the Best Places to Work and has been recognized nationally by Inc. 5000, Insurance Journal, Business Journals and again in Business Insurance for its talent, expertise and business growth in several areas.
Risk Strategies holds the motto that it’s a “different kind of insurance brokerage, bringing a strategic, holistic, specialist approach to our clients, so you can face the future with confidence.” In the following sections, three top specialists were interviewed to provide their perspectives related to Property & Casualty, Managed Care and Medical Malpractice in relation to healthcare.
Sharon Scheuermann, Senior Vice President. Focus: Property & Casualty
Sharon Scheuermann’s career as an insurance broker began more than 30 years ago. Her decades of experience have endured both hard and soft markets — an advantage for clients seeking insight at any given time. While her scope is national, she’s been consistently in the New York space her entire tenure, having sound knowledge of the state and New York City marketplaces.
When asked if there is a current common concern in healthcare that is related to property and casualty, Scheuermann cited three areas as having the most issues: property insurance for healthcare organizations, cyber liability and medical professional liability.
“Insurance companies are placing an emphasis on appropriate property valuations,” Scheuermann said of property insurance. “Some healthcare organizations have buildings that have been around for many years; however, the values for these buildings have not been updated adequately to account for the increased cost of construction and materials to replace them today. The market pressure to increase values has significantly impacted premiums. Additionally, catastrophic events have influenced the availability and affordability of property insurance for healthcare organizations.”
“Cyber risk has been particularly challenging for the healthcare industry,” she said. “Healthcare is one of the top-targeted industries because malicious actors have access to personally identifiable information, including Social Security numbers, credit card information and health information all in one place. The best defense against breaches of personal data is employee education and training, but it’s difficult to stay on top of training with turnover and staffing shortages.”
“In many jurisdictions, including New York, severity continues to rise,” Scheuermann said of medical professional liability. “Nuclear verdicts have become more common, resulting in decreased market capacity and higher self-insured retentions. Since insurance companies don’t want to put up high limits, an insurance program must be layered with multiple insurance companies, which could become more costly.”
Be proactive
Scheuermann’s main message to healthcare executives is to evaluate your current limit and retention structure — is it appropriate? Explore alternative funding mechanisms to find a balance between retained risk and risk transfer. Keep in mind the jury pool has changed — younger individuals are being targeted to participate and have different attitudes toward corporate America.
“It’s important to be proactive and start your renewal process earlier,” she said. “Meet with your broker to discuss current market conditions and to develop a strategy for the renewal and, given the opportunity, meet with the insurance companies, too. There’s no one better to tell your story than you. Develop rapport. Insurance is still very much a relationship business.”
For more information, contact Scheuermann at sscheuermann@risk-strategies.com or 908.939.8044.
Recognitions and Awards
Inc. 5000
- Named one of America’s Fastest-Growing Private Companies
Insurance Business Magazine
- CEO John Mina named to Insurance Business Global 100 Report
Business Insurance
- Ninth-largest privately owned broker
- 15th on the Top 100 Broker List
- Best Places to Work in Insurance for five years (2018-2022)
- Diversity & Inclusive Initiative of the Year (Gehring Group, a division of Risk Strategies)
Insurance Journal
- 12th-largest Independent Property & Casualty Agency
Business Journals
- Top 10 broker in several markets
- Number 1 broker in South Florida
- Fast 50 Growth Company (Boston)
- Middle Market Leader Award (Boston)
- Dealmaker of the Year Award (Boston)
Jennifer Negley, Vice President, National Healthcare Practice. Focus: Medical Malpractice
Like Scheuermann, Jennifer Negley brings to Risk Strategies three decades of experience in the insurance industry. As a long-time medical malpractice consultant, her clients benefit from her ability to come up with solutions that might not be readily considered by another individual with less experience. “Knowing the ins and outs of all the insurance carriers available to us, doing the amount of business that we do, specifically in malpractice insurance, and specializing in that gives us an edge over competitors.”
Also worth noting is Negley’s outlook on impartiality.
“Every situation is unique, and having the multitude of carrier relationships we have, we’re able to find that one that suits [our clients’] needs,” she said. “I’m never stuck in a situation where I have to push a group to a solution that isn’t ideal. I have seen those with limited markets do this and, as someone who strongly believes in clients first, I feel lucky to be with a company that aligns with those values.”
Negley said a hot-button issue right now among all carriers is the still-pending legislation, The Grieving Families Act (Senate Bill S6636/Assembly Bill A6698).
In essence, the details include the broadening of who can initiate wrongful death lawsuits on behalf of their deceased loved ones, as well as expanding the recoverable damages. The revisions aim to create a balance between the interests of families and the concerns of insurance companies.
“They’re utilizing a grief component,” Negley said. “You can imagine how, when you’re talking about the passing of a loved one, how can you measure, monetarily, grief? It’s going to be astronomical.”
Grief is a component utilized in other states but has a cap. In New York to date, it’s been based more on economics, meaning the earning potential of an individual throughout the remainder of their life would be factored into the compensation for which the family member(s) are asking.
“Incorporating a grief component without any guardrails [and] no cap, the dollar amounts are going to skyrocket,” Negley said. “There is a limit on the funds available for those payouts. It’s not something the carriers can sustain.”
The excess expenses will be passed on to hospitals and individual physician practices.
The concern is that if made into law, there will be a surge of lawsuits, insurance costs for both individuals and businesses will increase, and ultimately, it will be a disservice to the general public.
“The margin that these practices, even hospitals, operate under is sometimes very slim,” she said. “The result is you’re going to see smaller community hospitals continue to disappear at a rapid pace. That’s the biggest concern we’re seeing right now — the kind of impact it will have and how the carriers will react.”
Let us be your second set of eyes
Risk Strategies is ready to provide decision-makers with access to knowledge in a very transparent and open way to help them navigate their situations, Negley said.
“We know that administrators in medical practices are swamped with changes in regulations and a million other things they have to keep their eyes on,” she said. “There’s no way anyone is going to be an expert in everything. That’s where we come in. As a specialist in medical malpractice insurance, I am able to see trends and issues that often are not on a practice leader’s radar and develop solutions with our carrier partners before there is an impact on our clients.”
Reaching out to Risk Strategies, she said, curtails a healthcare leader’s risk of operating in a vacuum. It allows decision-makers to learn a broader view of the marketplace, see the trends and keep ahead of the curve in what’s going on in healthcare.
For more information, contact Negley at jnegley@risk-strategies.com or 610.293.1200.
Cathy Sussman, Senior Vice President. Focus: Managed Care
With three generations behind her, Cathy Sussman’s experience surpasses most. Nearing 40 years in the industry, she said, “I feel like I grew up with it.”
Clients can depend on Sussman to listen and think through solutions – not only in her realm of work, but also in other areas. She recently had a client who needed an actuary for a product they were about to launch; Sussman, who is well-networked, found one to help them.
“I’m really strong at finding what’s out there,” she said. “The risk piece – I can do that in my sleep,” she said, laughing. “I love just helping people determine what their risk tolerance is and what they want to buy. It’s kind of in my DNA and in my blood.”
Sussman’s specialty involves Excess of Loss and Quota Share Reinsurance focused on Managed Care. Her clients include health plans, hospitals, managed care organizations and accountable care organizations – essentially any group that is taking a risk and wants to make sure their balance sheet is protected.
Sussman said she thinks about risk in simple terms and often gives examples that explain how the thought process should work when deciding what to buy for protection. “People have different risk tolerances,” she said. “A $500,000 deductible for one organization may be way too scary. Another organization may say, ‘Hey, I can do $1,000,000.’ When you choose your risk level, it should be enough that it makes you a little uncomfortable, but it’s not going to dramatically affect your balance sheet. A claim shouldn’t disrupt your organization or alter your strategic objectives. We ask a lot of questions to get [our clients] to that level.”
A common concern in healthcare related to Managed Care is tied to gene and cell therapy, she said, because, though life-saving and life-changing, these treatments are costly, some running into the millions of dollars, and will result in higher rates. The same applies to specialty drugs.
Sussman emphasized that though she believes the U.S. operates under the best healthcare system available worldwide, it still has its challenges, particularly in healthcare reform. She described the 2014 Healthcare Reform Act as more of a financing reform: “It brought in insurance for most Americans, but it didn’t do anything to the underlying cost of healthcare.”
So how will authentic healthcare reform happen? How can price tags be more equitable?
“We need to think about that,” she said.
There are quite a few innovations happening at the local and national levels. One such innovation is social determinants, she said. “The more we can do in that area, I think the payback is going to be really great,” she said, giving the example of a houseless person whose healthcare cost roughly $3 million a year. This claim dropped by $2 million after supporting agencies found and paid for housing, a social worker and more, so this patient could become independent.
Sussman is excited to see healthcare executives developing strategies that investigate why healthcare costs escalate and find economic solutions demonstrated in her example.
“The question always becomes who pays for it but, at the end of the day, the ROI is pretty high,” she said. “When it comes from within the industry, it is so much more powerful than coming from the government.”
For more information, email Cathy Sussman at csussman@risk-strategies.com or call 612.396.7241.