Medical liability insurance premiums continue to climb nationwide for the sixth consecutive year. According to the American Medical Association’s Policy Research Perspectives Report1, nearly 50% of reported premiums rose in 2024 — up dramatically from just a 13.7% in 2018. Some states face especially steep hikes, such as Hawaii (50%), Pennsylvania (49%), and Montana (33%), signaling concentrated pressure points even as the national average increase was 2.5%. This growing financial burden underscores the importance of proactive risk management strategies to preserve patient access and care quality. As a result, many healthcare organizations are exploring alternative coverages like captives and self-insurance. A healthcare captive (an organization-owned insurance subsidiary) or self-insurance (directly funding claims up to a high threshold) can provide greater control over costs and coverage terms while even enabling reinvestment of insurance dollars into risk management initiatives. While not subject to the traditional insurance market’s pressures, captives and self-insurance are not without risk; the most significant risk being the development of adequate risk financing. Captives and self-insurance programs require a deliberate funding mechanism called Risk Financing, or a strategic approach to securing funding to pay for anticipated claims. Yet, only with accurate, connected data on your organization’s risks, can a healthcare organization set reserves confidently, defend decisions to auditors or boards, improve risk management and respond quickly to emerging liabilities. In this environment, lean healthcare teams need tools that connect the dots with data to help them act early, operate efficiently, and support risk financing with confidence. Why Strong Data Is Key to Proper Risk Financing To tailor coverage to their true risk profile, healthcare organizations must understand their historical claims patterns, project future exposures, and align those projections and more. For example, a health system facing rising malpractice premiums might form a captive to control costs, but without reliable data on incident frequency, claims progression, and settlement trends, funding levels for that captive can quickly become guesswork. An underfunded program risks liquidity shortfalls that undermine its stability, while overfunding ties up capital that could otherwise support operations or strategic initiatives. Similarly, a hospital with rising workers’ compensation claims from staff injuries may attempt to fund those risks with self-insurance. If safety data, incident reporting, and claims management are siloed across multiple systems, it becomes nearly impossible to get a unified view of the healthcare organization’s risk. This fragmentation doesn’t just slow operational response but directly undermines risk financing. Without a connected view, it’s difficult to translate day-to-day events into a clear picture of current and future financial exposure. The consequences are far-reaching: Trends go unnoticed. Recurring provider issues, high-cost claim types, or location-specific loss patterns are missed until they result in significant payouts. Board and auditor responses are delayed. Pulling together information from multiple systems can take days or weeks, leaving leadership without timely insight. Reserve setting becomes guesswork. Without real-time claims progression data, reserves may be over- or under-funded, affecting liquidity and tying up capital unnecessarily. When finance and risk teams operate from disconnected sources, decisions are slower, more reactive, and less defensible. Delayed or poorly informed funding decisions often come with a higher price tag, sometimes in the form of cash shortfalls, others in the form of missed opportunities for reinvestment. Moving from Fragmented to Proactive For many healthcare organizations, the greatest opportunity in risk financing lies in shifting from responding to claims after they occur to a proactive approach that identifies and addresses risk before it impacts the balance sheet. This shift requires three core capabilities: Connected data: Bringing frontline events, claims information, and financial metrics into a single view so patterns can be identified in time to act. Shared visibility: Ensuring finance, risk management, legal, and operations work from the same information to set accurate reserves, prioritize mitigation efforts, and present a unified position to stakeholders. Scalable processes: Creating workflows and reporting that adapt to growing data volumes, regulatory changes, and evolving risk profiles without adding administrative burden. With these capabilities in place, captives and self-insurance programs become far easier to manage and far more valuable to their healthcare enterprise. Lean teams can detect trends earlier, set reserves more accurately, and meet governance demands without sacrificing strategic focus. They can: Identify emerging loss drivers and invest in mitigation before they escalate. Validate the ROI of risk reduction initiatives to inform future funding decisions. Demonstrate measurable impact to boards and reinsurers. Negotiate with reinsurers and stakeholders from a position of strength, backed by defensible funding projections. Make evidence-based decisions on coverage structures, funding levels, and allocation of captive surplus. Drive Better Outcomes Through Smarter Risk Financing When financial strategy and operational risk management are closely aligned, organizations are better equipped to maintain adequate funding, respond to change, support their workforce, and deliver consistently positive outcomes for patients and communities. In this way, effective risk financing becomes more than a back-office function. It’s a driver of both organizational resilience and the mission to provide safe, high-quality care. Origami Risk helps healthcare organizations put these principles into practice by connecting data, streamlining processes, and equipping teams with the insights needed to manage captives and self-insurance programs with confidence. To learn more about how we can support your risk financing and risk management programs, contact us. 1 American Medical Association, “Policy Research Perspectives Report: Is medical liability insurance headed toward a hard market in 2025?”