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Long-term care provider loss rates expected to increase 5%

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Long-term care provider loss rates expected to increase 5%

Loss rates for long-term care providers are expected to increase by 5% annually, according to a study released Thursday.

The projected national 2014 loss rate for long-term care facilities, which is a combination of claim severity and frequency, is $1,940 per occupied bed, according to the survey, which was conducted by the Washington-based American Health Care Association and Aon Global Risk Consulting, the risk consulting business of London-based Aon P.L.C.

Included in the survey are 34 providers that operate 220,000 long-term care beds. They account for about 16% of the beds in the United States, and eight of the 10 largest operators, according to the survey.

“Across the country, long-term care and post-acute care centers provide care for 1.1 million frail and elderly and employ more than 1.5 million people. Rising liability costs drive up the cost of doing business and not only threaten access to care but could ultimately cost jobs,” said Mark Parkinson, president and CEO of the AHCA, in the statement.

“Conservative jurisdictions with longstanding tort limits are less economically attractive to attorneys. The firms have focused their attention on venues with no tort limits, less mature tort laws or more liberal judiciaries. We are seeing this in Kentucky, Tennessee and West Virginia, where claim frequency rates are growing,” said Christian Coleianne, associate director and actuary from Aon Global Risk Consulting, who produced the report, in the statement.

According to the report, Kentucky's loss rate, the highest of the profiled states in the study, has been increasing since 2008 and is projected to reach $8,090 in 2014.

Copies of the report are available by registering here.