Healthcare industry faces myriad risks from Ebola crisis

Since the first reported case of Ebola in Dallas and the subsequent spread of the virus to at least two nurses who treated the patient, the insurance industry has sprung to action to offer risk management considerations and policy clarifications to healthcare providers.

“This is a complicated matter that will continue to be complicated,” said Skip Skivington, vice president of operations—national finance operation at Keiser Permanente, during a recent Advisen webinar on hospital worker safety.

But, he added: “I’m confident we as an industry will figure this out and get a handle on this. What we know today may be different tomorrow.”

Journalist Sheri Fink, author of the book “Five Days at Memorial,” said from Liberia during the webinar that the application and removal of protective equipment has been paramount. The differences in protection differ from triage to direct contact with Ebola patients. She said at the time that guidelines from the CDC were “less stringent” than the procedure she witnessed in Africa.

“There is a safety monitor walking you through every step,” she said. “There is a one-way flow. No one ever goes backwards.” Staff are sprayed with a chlorine solution and gear is taken off in a very specific way.

Aon has launched a dedicated Ebola response website for clients. Here, amid advice for other industries, Aon outlines a crisis communication plan for health care facilities—from reaching employees to communicating with media, customers, suppliers and stakeholders.

Randy Nornes, executive vice president of Aon Risk Solutions, said he’s fielded many calls from concerned clients looking for answers. Most recently, these calls have come from Europe—countries such as Italy, Spain and the Netherlands.

“This cuts across geography and industry,” he said. “There is no hysteria, but clients are seeking basic information—what they should do. There are many risk aspects of this outbreak beyond the most immediate dangers faced by workers.”

For instance, patient confidentiality and reputational risk remains paramount. “Communicate the hospital’s Ebola safety precautions and that the hospital remains a safe place for non-Ebola patients,” reads the bulletin from Aon.

In a recent post Deanna E. Allen, senior vice president of the Willis National Health Care Practice, asserted that “this is not the time to consider a patient’s ability to pay for access to healthcare providers for screening or treatment of Ebola.”

Allen also advised healthcare facilities to reaffirm supply chain and vendor agreements. “One of the most important vendors in the supply chain has been the identified as your hazardous waste removal vendor,” she said.

Broker Marsh published a paper to outline insurance considerations during the Ebola situation. Holly Meidl, national health care practice leader at Marsh said health care organization should develop a claim management plan now instead of scrambling later.

“We want clients to start the process of pre-thinking claims scenarios–who to notify who knows which policies are triggered.”

Workers’ compensation insurance would likely provide unlimited coverage for the treatment of the illness, lost wages or death but if an employee decides to sue an employer for negligence, liability insurance could apply. However, it has a limit per accident. This policy may also apply to a family member being exposed to the virus by an infected employee.

Business interruption insurance has been the topic of much discussion. Meidl said coverage limitations were pointed out by Superstorm Sandy, which forced health care facilities to voluntarily close to evacuate patients. Policies typically do not cover voluntary closure and even if authorities order a closure, the lack of physical damage–a standard requirement to trigger BI–can prevent coverage.

“Make sure you read your policy now,” Meidl said. Most organization’s BI policies contain communicable disease contamination sublimits that require a government order due to the actual, not suspected, presence of a communicable disease.

“This means that without special provisions [to broaden coverage] health care providers’ property insurance and BI policies would like not be triggered based solely on the presence of Ebola,” she writes.

Meidl says there has been some movement in the marketplace to up limits for contaminants but not to cover a voluntary closure or quarantine. Moral hazards fears abound in such a situation.

But this will also not stop facilities to close if they need to, Meidl said. “These facilities have a strong obligation to their communities. They won’t stay open to protect a business interest. Any CEO will shut it down if they have to.”

D&O exposure exists if patients or employees allege that an infection was caused by mismanagement. Coverage would extend to directors and officer even if a facility failed to follow CDC protocols, unless there was intent. But, Meidl warned, “No policies respond to reputational risks.”