Page 4 — Monday, 1B as ‘ 99: "The F

  

TC hospital
tries to cut
cost increase

By MIKE NORTON
Record-Eagle staff writer“:

TRAVERSE CITY — Munson
Medical Center is attempting” to
eliminate nearly $200,000 in extra ‘costs
this year — by becomiig’ ¥ its own: ‘ih-
surance company.

Through a new “gelf-insurance”’
program that began‘Aug. ‘1,° the
Traverse City hospita' Tope s ‘to'ave as
much as $184,000 in } i Reon

i i sue Officials
say they intend to pass ose Savings
along to their patients ‘by trimming
back next year’s fee increase.

Liability insurariceprptects a hospital
against lawsuits stenihiing from patient
injuries or other complaints. But the an-
nual cost of maintaining such coverage
has gone up at a spectacular rate —.
from $5,200 ten years ago to $309,670
this year. Since Munson ended up pay-
ing on only a small number of claims
each year, most of that money has been
fattening the coffers of the hospital’s in-
surance company.

Last month, the hospital board ‘of
trustees decided to keep some of that -

 

money for themselves. So—like many. -

other large medical centers! across the
’ country — they decided to go into the in-
surance business for themselves. __

“What we’ve done is that, -. rather
than paying the money to the insurance
company, we put it into a special bank
account instead,” said hospital ad-
ministrator John Bay.

To maintain the hospital’ 8 current
coverage under this plan, Bay said,
would cost about $125,000 this year.

“There is absolutely no question,’ *he
said, that the resulting sayings,
however, will mean only a reduction in
the fee increase bee planned for
next year. .

Self-insurance arrangements are
common elsewhere in the state, Bay
said — especially in larger com-
munities such as Flint and Grand
Rapids. But because of the larg
amounts of money that must be tied w
in the insurance account, only large
medical centers are generally able {
set up such programs.