Alternative Risk Financing Mechanisms: The Financial Benefits Are Good For Post-Acute Care Providers, But Are Not the End of the Story

Posted by Jason Greis on March 3, 2009 under Articles | Be the First to Comment

The most common form of risk financing in the LTACH and post-acute care arena is commonly referred to as an organization’s “insurance policy.” Typically, we “finance” the chance that we may suffer a loss secondary to an accidental injury by paying for an insurance policy. Alternative risk financing mechanisms can offer a number of different types of insurance mechanisms that provide the same (and many times better) “coverage” as the typical insurance policy. They also allow you to realize some investment ownership of that mechanism. Because the incentives of “ownership” and “good risk management practices” are perfectly aligned, well-managed alternative risk finance mechanisms can return the fruits of successful risk management straight to your bottom line. In short, a successfully owned and managed alternative risk financing mechanism can take “insurance” from the cost side of your balance sheet to the asset side. They also have other benefits. Read More...