Case Study: Catholic Health Initiatives
"Technical ability in a consultant is a given," says Mitch Melfi, Chief Risk Officer of Catholic Health Initiatives (CHI), a large national health care system based in Denver. "What sets Tillinghast apart is its consultants' ability to take something incomprehensible to a layperson and make it understandable to a board of directors and others for whom insurance isn't a daily focus."
CHI was formed in 1997, when four large Catholic health systems merged. Today, CHI has 69 hospitals, 43 long-term care facilities, assisted living and independent living facilities, and five community-based health organizations in 19 states.
Tillinghast consultants helped CHI form its offshore captive, which the health system uses to cover its professional liability, workers compensation for 65,000 employees, and property and automobile exposures. Since its formation, John Mize of Tillinghast's Atlanta office has been the lead actuarial consultant for CHI.
"Catholic Health Initiatives has an atmosphere that encourages strategy development," Mitch says. "For risk management, we have a planning team made up of CHI people and outside consultants that plays out 'what if' scenarios and develops a long-term strategy. John's an important part of that team because he's more than an actuary. He's very knowledgeable about other aspects of the business."
Mitch and his team must balance the need to keep the captive viable and stable over time with the needs of CHI's hospitals and health programs, so Tillinghast's modeling and forecasting work plays an important role ― as does John's ability to interact with CHI's captive board of directors.
"One defining moment came several years ago, when we faced the largest single-year premium increase in our history," Mitch says. "We presented the increase and the rationale for it to a committee of the board, and afterward ― despite this big increase ― three hospital CEOs offered testimony as to the value of our captive program. That's because we'd spent a lot of time over the years demonstrating the value of our program and making certain that the CEOs clearly understood how it works."
"We work closely with CHI to address the risk management issues faced by the system. Mitch and his staff have emphasized a collaborative approach, which has served CHI well over the years," John says.
"We benefit from Tillinghast's experience and access to data and information," Mitch says. "They're a respected and valued part of the team."