Captive Insurance Is a Strategic Tool for Managing Hospital Cyber Risk

In a recent Business of Healthcare (BOH) video interview titled "Innovating to Reduce Cyber Risk," Cleveland Clinic's Executive Director of Enterprise Risk and Insurance, Charles Kolodkin, and Clearwater Compliance's CEO, Bob Chaput, discuss steps in developing a hospital cyber risk management strategy and share how captive insurance companies prove to be critical in the ongoing effort to manage and reduce cyber risk.

In the video, Mr. Kolodkin explains that, while a commercial program may provide the foundation of a cyber risk funding strategy, a captive can be a complementary tool to achieve an organization's objectives. He also shares that, "[a captive insurer's] best role, besides risk funding, is to shed light on areas that need to be addressed [to] influence behavior."

Mr. Kolodkin and Mr. Chaput discuss ways health systems and hospitals can improve cyber risk management, transfer liability, and better identify, manage, and address network security risk. Cyber risk may cause patient harm, as well as reputational harm, to hospitals and health systems, which means third party and regulatory risk exposure quickly bleeds into medical professional and hospital professional liability, loss of income, and other aspects of organizational risk.

The video includes the following information.

• The ways cyber and privacy risks bleed over into Medical Professional Liability risks
• Building a commercial cyber insurance program as part of a comprehensive risk funding strategy
• Telemedicine and the next generation of device protection in healthcare
• How a captive insurance company can be a complementary tool for financing as well as for reducing cyber risk
• Heightening protection of medical devices to reduce potential for patient harm
• The fundamental principles of risk management: risk identification, risk assessment, and benchmarking

Cleveland Clinic is one of the country's largest healthcare organizations, whose flagship facility is consistently rated among the nation's top five hospitals. At a glance, Cleveland Clinic has $8.3 billion in annual revenue with 51,000 caregivers; 3,600 employed physicians; 4,435 beds; 220,000 hospital admissions; 652,000 emergency visits; and 7.1 million outpatient visits.