BETA Healthcare Group (BETA) is an insurance-related organization which has provided risk financing programs and risk management services to the healthcare industry in California since 1979. BETA is rated “A (Excellent)” and has a “Stable” outlook from A.M. Best, the leading insurance industry rating agency, which stated on June 10, 2015:
The ratings of the BETA Healthcare Group (BETA or the group), are based on a consolidation of the property/casualty members of the organization, and reflect the group’s strong balance sheet, favorable operating profitability, and conservative loss reserve philosophy. The ratings also recognize the group’s highly specialized market focus as a leading provider of non-assessable group risk-sharing coverage for hospital and medical professional liability (MPL) in California. Furthermore, its broad coverage includes offering general liability, directors’ and officers’ liability, employment practices liability, and automobile liability and physical damage to qualified hospitals, healthcare facilities, and medical groups that meet its strict underwriting guidelines.
Although one of BETA’s related organizations is a joint powers authority, it is very different from other public entities, such as cities, counties and even other JPAs. As a special purpose district, BETA Risk Management Authority (BETARMA) provides liability coverage to over 150 non-profit, district, city and county healthcare facilities and over 4,600 private physicians working at these facilities. In addition, another BETA-related organization, Health Providers Insurance Reciprocal, a Risk Retention Group (HealthPro), domiciled in Hawaii and is authorized in Arizona, California, Nevada, Oregon and Washington. HealthPro covers 30 medical groups, almost 700 physicians and six for-profit healthcare facilities. BETA covers more hospitals than any other insurance company in California.
To obtain and retain these healthcare providers as insureds, BETA must compete against for-profit commercial insurance companies and specialty for-profit medical liability insurance companies based on the price of its products, breadth of services and quality of its staff. BETA’s expense structure has always been below the average for medical liability insurance companies which helps it maintain a near 100% member retention rate year after year. BETA’s financial success is apparent in its impressive growth over the past decade:
| 2014 | 2004 | % Change | |
|---|---|---|---|
| Assets | $440.9 M | $307.7 M | 43% |
| Cash and Investments | 407.5 M | 241.1 M | 69% |
| Net Position | 229.0 M | 65.3 M | 251% |
| Member Contributions | 78.8 M | 48.1 M | 64% |
| Investment Income | 12.1 M | 9.9 M | 22% |
To properly understand and appreciate BETA’s unique organizational structure, it is important to know that BETA is 100% self-supporting based on its very successful underwriting and investment programs and that it does not receive and has never received any local, county, state or federal tax revenue or subsidies, unlike most governmental agencies. In addition to not receiving any taxpayer money, BETA has never issued general obligation bonds or any other type of government-preferred debt.
BETARMA has always been successful, producing positive operating results, while returning excess funds in the form of dividends to its members. Its governing board, the BETA Council, which consists of senior executives and board members from non-profit, district and county hospitals and healthcare systems, has declared or set aside over $186 million for dividends in the past 23 years, with almost $100 million declared in the past five years. By providing members with attractively priced liability coverage, cutting edge risk management services, and substantial dividends, BETA is there to support its members financially, enhance patient safety and improve outcomes.
High quality governance has always been an important component of BETA. BETARMA and HealthPro’s attorney-in-fact, BETAlliance Insurance Services (BAIS), each have member-elected governing bodies. BETA Council and BAIS board members receive $500 per meeting as well as having their travel, food and lodging expenses covered and/or reimbursed. No BETARMA employees receive any compensation or expense reimbursement from HealthPro or BAIS. While BETARMAmeetings are open public meetings, HealthPro and BAIS meetings are closed to the public as HealthPro operates as a for-profit insurance company and BAIS is a California non-profit mutual benefit corporation.
Although neither BETARMA nor HealthPro/BAIS provide or reimburse for spouse travel, meals or other costs, BETA’s consultants, investment managers, and law firms occasionally make voluntary donations to offset spouse meal and meeting activity costs for which the sponsors are recognized at the meetings. All costs covered by such donations are properly accounted for and allocated to the appropriate individuals as “gifts” in compliance with the California Political Reform Act and Fair Political Practices Commission requirements.