When hospitals reactively purchase their insurance, they haven't spent much time?if any?reviewing their coverage. So when their policies come up for renewal, they're at the mercy of the insurance company, which simply gives them a new quote. Pearson says a proactive approach requires hospitals to continually test the market and vet their options to ensure that they're getting the best coverage for the best price.
However, that's often easier said than done. The task of reviewing insurance can sometimes fall to the wayside at smaller hospitals, which simply don't have the manpower to be constantly reviewing different options.
"Rural hospitals don't have a lot of staff like an urban facility," Pearson says. "A lot of people wear different hats, and the monitoring of insurance contracts and renewals is not always the highest priority."
That's where group purchasing can come in handy.
"I think we're just trying to take some of that load off of those hospitals and ensure that they can focus on patient care," Pearson says.
There are currently 51 hospitals participating in the TORCH insurance program, which is about one-third of its members. According to the organization's website, the program's total buying power has tripled since 2007, with participation increasing by 27% and the number of policies increasing by 197%.