Zurich's Transplant Coverage Lifts Liability From Self-Insured Employers

Zurich first introduced the product in late 2000 in a few targeted markets and offered it to the wider market in 2001, Mr. Mueller said.

To cover catastrophic risks such as transplants, a self-insured employer typically buys medical stop-loss insurance as a reinsurance layer, Mr. Mueller stated.

A medical stop-loss policy is typically written on an annual basis. If an employee undergoes transplant surgery at the end of one policy year, those costs would certainly pierce the stop-loss layer in that year, Mr. Mueller noted.

But in addition, costs from the recovery, immunosuppressant drugs and possible re-transplantation could significantly impact the following year's medical stop-loss policy, he indicated.

This leads to rate increases to employers on their stop loss, he said.

Zurich's managed transplant coverage stabilizes self-insured employers' stop-loss medical program "by carving out the catastrophic transplant event from first dollar and managing the program for them," Mr. Mueller stated.

While Zurich sees interest in its product from large and small employers, most of its clients are Fortune 500 companies, which experience transplants more often, Mr. Mueller said. The coverage is typically purchased by self-insured employers with more than 500 employees and by managed care organizations with more than 500 employees, Zurich said.

"We get many calls from employers" that have had an employee undergo a transplant, saying "they never want to go through another one because the financial and emotional impact can be so devastating," he revealed.

Among the product's features are:

Managed coverage of transplants through a network of preeminent academic medical centers such as Johns Hopkins and the Mayo Clinic.

100 percent coverage of approved organ and bone marrow transplants at the network facilities.

Immunosuppressant drugs for one year.

Mr. Mueller indicated that the average premium for the transplant coverage is 3 percent to 5 percent of the stop-loss premiums paid by an employer, depending on loss experience and size.

Despite the high price of transplants, Zurich is able to make money with its product because of its "volume-demand type of approach," Mr. Mueller said. Specifically, Zurich has contracted with the medical facilities in its network for "global fees," Mr. Mueller said. These fees allow Zurich to cap the cost of transplants for patients referred to the participating facilities.

Under the Zurich plan, trained nurse case managers are assigned to transplant patients, from the diagnosis to the post-operative care phase, to help them navigate the clinical and administrative issues involved.

For example, Mr. Mueller said, the nurse case managers help ensure that patients stay on their immunosuppressant drugs. For the patient this can mean a better experience and outcome, and for the employer it can mean a curb on additional costs, such as for retransplants, Mr. Mueller observed.

Zurich allows medical facilities within its own network to evaluate and determine whether a particular patient should have a transplant. In fact, Zurich usually obtains more than one evaluation, Mr. Mueller added.

He said that there is "a high degree of credibility" when a hospital of the caliber of the network members determines that a person is not eligible for a transplant.

Another way that Zurich transplant insurance relieves employers of liability, Mr. Mueller said, is by providing unified coverage for all employees regardless of geographic location. This is in marked contrast to many "underlying medical plans across the country, especially where multiple HMOs are involved with a large employer, and transplants may be treated differently depending on the region and hospital affiliation of the network," he stated.

Due to the regulatory set-up for transplants, patients are placed on regional waiting lists for donated organs. Nevertheless, "within that regional design, we can get people on the appropriate list that best meets their timing needs as well as the outcome need," Mr. Mueller said.

"The key is to get the best possible care, and through our extensive network, we seek the most appropriate facility for the patient's situation," he explained.

"The idea is we're able to movethe patients," he said. If a patient wants to go to "one of the better academic medical centers," Zurich can transport the patient and one family member there, all of which is covered by the transplant insurance.

Mr. Mueller said Zurich faces limited competition in the transplant insurance market. One principal rival is "the status quo," he said, meaning that employers do not offer it because they "are comfortable with what they already have."

Zurich's other main rival in this field is transplant networks. But in Zurich's view, transplant networks do not offer the same type of product, Mr. Mueller said. "We have three components that we don't see anyone else fulfilling: the financial, the network and the clinical, which includes the patient advocacy of our nurse case managers," he stated.

Mr. Mueller was unabashedly enthusiastic about Zurich's transplant insurance.

"We love it. We think it's a quality product that integrates the network concept into a full risk-bearing, full administration and case management program," he said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 9, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.