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2008 Annual Meeting - Committee Chair Reports Highlight Extraordinary Year
Medical Mutual held its Annual Meeting of Members May 7, 2008 at Portland’s Regency Hotel. In addition to announcing the re-election of four current Board members — Company President and CEO, Terrance J. Sheehan, MD, Mark S. Cooper, MD, Cynthia Allen DeSoi, MD and James M. Totten, CPA — the Company’s Board and Committee Chairs, as well as department heads, reported the highlights and results of their groups’ respective activities for 2007. Their reports are summarized below:
Finance and Investment
Mark S. Cooper, MD, Board Treasurer and Chair of the Finance and Investment Committee, reported on the Company’s excellent financial condition at year-end 2007. Key information and financial elements of his presentation were:
- Physicians and Surgeons policies accounted for 80% of net premiums written with hospital professional liability policies comprising 15% of net premiums written.
- In 2007, the Company declared its first dividend to policyholders since 1998. The dividend reflected favorable operating results in 2006.
- The Company’s statutory assets increased $12,885,000 (6%) to $216,264,000 in 2007.
- Policyholders’ surplus increased 14% to $82,727,000 from $72,318,000 at December 31, 2006.
- Total loss and loss expense reserves decreased 2% to $93,222,000 at yearend 2007, from $95,150,000 at December 31, 2006.
- Total investments increased to $175,269,000 at year-end 2007 from $172,920,000 at year-end 2006. The increase is reflective of the investment of net cash provided by operations. In spite of market volatility, the net unrealized gain on the Company’s equity portfolio increased by $1,277,000 in 2007.
Underwriting
Katherine Stoddard Pope, MD, Chair of
the Underwriting Committee, recounted
the Underwriting Department’s successful
efforts to retain a key hospital client by
partnering with them as they investigated
the pros and cons of self-insurance under
a captive structure they were considering.
“In the end,” Pope reported, “we were
able to conceptualize alternative risksharing
options that better served their
goals and objectives, while insulating this
policyholder from the dramatic impact
adverse claims development can have on
a self-insured institution’s finances.”
In addition, Pope cited the migration
of physicians from independent practice to
employment with hospitals or large multispecialty
groups as an important trend, the
implications of which the Underwriting
Committee began discussing in 2007 and
will continue to monitor.
Hospital Operations
The role of the Medical Mutual’s Hospital
Operations Committee is to help the
Company identify critical issues and challenges
that affect the hospital community
so that hospitals can develop appropriate
responses to help ensure patient safety standards
and a stable practice environment. To
this end, the Committee sponsored the
Company’s inaugural Hospital Education
Program, which focused on the unique
coverage and claims issues related to government
health centers and the importance
of handling and communicating medical
errors,” reported Scott Bullock, President of
MaineGeneral Health and Chair of the
Hospital Operations Committee. Bullock
said that based on enthusiastic feedback for
the program, the Committee is already
planning the second annual Hospital
Education Program for 2008.
Marketing and Communications
Reporting for the Marketing &
Corporate Communications Department,
Vice President, John Doyle, noted the
department’s support in implementing
key initiatives undertaken in 2007 that
distinguish Medical Mutual in the
Northern New England marketplace:
- Synernet Partnership — A recentlyannounced
partnership that will allow
large groups and hospitals that use
credentialing services provided by
Portland-based Synernet to significantly
streamline the process of applying for
insurance from Medical Mutual
- Educational Programs — The initiation
or continuation of several periodic
educational programs established
specifically for physicians, practice
managers and independent agents, as
well as hospital administrators, risk
and quality managers
- Vermont Outreach — The establishment
of a Vermont Advisory
Committee, aimed at helping Medical
Mutual become “a more effective and
involved resource for the Vermont
medical community.”
- e-Communications Initiative — The
launch of a new electronic communication
and internet-based policy management system that “leverages technology
for increased efficiency and
enhanced customer service.”
Risk Management
The Risk Management Department had
another busy year as Cynthia DeSoi, MD,
Risk Management Liaison to the Board of
Directors, reported numerous highlights,
including: the hiring of a new risk manager
to meet growing demand; the launch of
a new surgical specialties office practice
project; the successful implementation of
the paperless ImageRight file storage system;
the expansion of the Risk Management Department’s Practice Tips
and Forms offerings; and the development
of strategies to address the challenges
created by CMS “Never Events,”
“I’m Sorry” legislation and the disclosure
of unanticipated outcomes.
Claims
Finally, reporting for the Claims
Committee and the Claims Department,
Medical Mutual Chairman, William
Medd, MD, chronicled a year in which
the number of claims filed were 50%
fewer than in 2003, the Company’s “highwater”
year for claims. He also noted that
“one has to look back 10 years to find a
comparable number of new claims.” The
numbers, he said, are part of a national
phenomenon of reduced claims.
Medd’s report included a look at the
Company’s litigation experience for 2007,
highlighted by the results of the first cases
subjected to New Hampshire’s Pre-
Litigation Screening Panels. Five cases
were considered by the panels whose
members voted on the dual questions of
standard of care and causation. With a
mix of unanimous and split votes, two
cases were dismissed by the plaintiffs, one
is currently in settlement negotiations,
one is currently pending based on settlement
terms requested by the plaintiff and
the final case is scheduled for trial.
Medd said that while the sample of considered
cases is limited, “it would appear
from these early statistics that the panel
process is ‘working’” and that the Company
believes that, over time, the process will
“show itself to be a mechanism that leads to
timely compensation for injured patients
and to dismissal of non-meritorious claims
against healthcare providers.”