Prison Program Plans Push

An insurance program offered exclusively by U.S. Risk Underwriters stands to benefit from prisons increasingly outsourcing their medical care. This program, distributed through retailers and wholesalers and backed by the General Star Management Cos., covers physicians and physician groups which contact to provide service in prisons. Prison inmates are often regarded as the only segment of the population with a constitutional guarantee to quality health care, and often suffer from diabetes, hypertension and asthma while institutionalized. U.S. Risk launched the program during late summer 2004 with expectations of pushing premium volume past the $million mark within the first 12 months, but the secret to finding customers has so far eluded Michael Davis, who manages the program. While U.S. Risk is one of the few carriers directly addressing this market, PrimeCare Systems aims its PrimeCare Patient Management System -- which can be a cross-sell opportunity for insurance producers -- at reducing prisoners' health care problems, which in turn could reduce the liability exposure for the healthcare providers.

Building Program Counts on Savings

U.S. Risk Underwriters works to develop marketing material that could ramp up the growth of its prison doctor med mal program by targeting prison wardens and other prison management. The carrier expects that savings can be passed along to prison budgets if their doctors enroll in an insurance program specific to prison doctors and with lower med mal premiums. U.S. Risk's prison doctors program is designed for general practitioner-types rather than specialty disciplines. Physician groups as well as individual doctors who provide services to prisons can find coverage in the program. The program carries a master policy and physicians are covered as named insureds. Generally, individual doctors provide limited part-time service at prisons, but there is increasing use of private sector business to provide services to prisons, and more of the accounts buying into the U.S. Risk program are physician groups. It was thought individual physicians would be the market for this program when it was started.

U.S. Risk counts about $500,000 in premium in the program from about 10 policyholders. These insureds are usually medical groups previously self-insured. The largest account is a physician group comprised of roughly a dozen doctors only working with prisons, and servicing prisons in four Midwestern states. The group pays a premium of about $200,000. The national program is available in all states except Indiana, Kansas, Louisiana, New Mexico, New York, and South Carolina. Coverage is on a claims-made form with typical limits of $1 million / $5 million. There is a $15,000 minimum premium for either a physician or group. The minimum deductible is $15,000. this larger deductible allows the program to avoid nuisance claims. U.S. Risk accepts inquiries from both retailers and wholesalers. Wholesalers are paid 7.5 to 10 percent and retailers get 5 to 7.5 percent. The policy places defense costs within policy limits. There is no consent-to-settle provision. Claims are on a made-and-reported basis. The prison doctors professional liability cover can be purchased monoline. U.S. Risk's prison doctors program spun off from its criminal justice insurance program for adjudicated populations, such as prisons, half-way houses, and drug rehab centers. The criminal justice program offers general liability and professional liability, also backed by General Star Indemnity and General Star National Insurance. The policy covers civil rights violations and is available in all states with defense costs paid outside policy limits. Deductibles start at $2,500.

The PrimeCare system is expected to save time required to make a diagnostic assessment and treatment, possibly cutting down on health-care professionals' liability exposures and their premiums. The software, and English / Spanish bilingual electronic interview module, takes over an inmate's medical history interview, which is usually conducted by physicians, nurses and supporting staff. The inmate's answers are recorded and the system generates a report of current problems, medications and allergies. This report is expected to help later, when physicians and nurses may be called upon to respond to an inmate's medical emergencies. PrimeCare will pay health-care liability insurance producers a 25 percent commission for selling this product, with commission rates decreasing to encourage new sales. The system is relatively inexpensive, with a doctor visiting 30 patients daily paying $1,000 a month for the product.

About Crittenden Research, Inc.

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About PrimeCare Systems, Inc.

PrimeCare Systems, Inc. develops, markets and distributes medical software and diagnostic products for the healthcare industry. The Company created, holds the rights to, maintains, and markets the PrimeCare Patient Management System including the Electronic Medical System, and Code Compiler, an E&M documentation analysis module. www.VersionNine.com