1989-12-13 Regular MeetingRECEIVED
9 g
K aK ISLAND BOROUGH
a CLERK'S OFF
/b3-og-oz
KODIAK ISLAND HOSPITAL ADVISORY BOARD
IAL MEETING, WEDNESDAY, DECEMBER 13, 1989
PURPOSE: Discuss malpractice insurance study and possible recommendations.
I. CALL TO ORDER: 7:01 PM
PRESENT: Wilton White, Betty Springhill, Ben Ardinger, Gretchen Saupe, Dr.
Johnson (7:20), and Lonnie White (7:20); absent: Bill Hogan; also present,
administrator John Salness; guests, Mike Lockwood (Sr. Admin. -AK); Jim
Groves, insurance consultant.
II. PRESENTATIONS
A. MIKE LOCKWOOD/PRESENTATION
Mr. Lockwood presented a bar graph for years 1986-92 on malpractice premium
costs. The difference indicated between self insurance (reaching maturity
in 3-5. years) and MICA.
B. MR. JIM GROVES/REPORT
Mr. Groves stated the basic question is do you [Board] want to buy
insurance or self insure (?). Mr. Groves outlined difference between
insuring through MICA and setting up a self-insured trust fund. The fund
would allow KIH control of investments & interest would offset claims. Due
to how losses are paid (3 or more years after a claim), allows time for
funds to build.
Excess insurance assumes losses over $500,000 per occurrence/l million
per year. The best quote for excess is "Reliance Insurance Company," which
is A -rated. More explanation & discussion on insurance options.
KIH could pay excess insurance premium and put difference between excess
and MICA premium aside for reserve. The Advisory Board would be trustees
of the fund and LHS Mgt. Company would manage it.
Three questions put to Board for response:
1) Is the 1 million annual aggregate retention (limited to $500,00 per
loss) acceptable?
2) Are the offered excess limits of 4/7 million acceptable?
3) Is the indicated cost in an acceptable range ($114,000 for excess)?
MOTION #1: DR. BOB JOHNSON MOVED WE ANSWER THE THREE QUESTIONS IN THE
AFFIRMATIVE AND ENCOURAGE THAT KIH PURSUE THAT APPROACH. DISCUSSION ON
AGGREGATE AMOUNT. IT WAS ADVISED TO BE SUFFICIENT.
ROLL CALL VOTE:
YES: Ben Ardinger, Gretchen Saupe, Lonnie White, Dr. Johnson, Betty
Springhill, Wilton White.
NO: None opposed. MOTION PASSED UNANIMOUSLY.
KIB Assembly will be advised of this motion in order to take action. John
Salness will see Mayor Selby tomorrow.
Under insured physicians: should not be affected adver,nly because it was
the hospital who was penalized for exposure, riot the phy�a c.ians.
Risk Manager will be hired by LHS to manage program.
ADJOURNMENT: 9:00 PM. Recorded by Beth Stolrl-Reiland.
Wilton 4lhite. Chairman Gretchen Saupe, Secretar