Long-term care provider loss rate for 2015 projected to go up 5%
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The projected national 2015 loss rate — reflecting a combination of claims severity and frequency — for long-term care providers is expected to be $2,030 per occupied bed, an increase of 5%, according to a study released Thursday by Aon Global Risk Consulting and the American Health Care Association.
Meanwhile, long-term care loss rate frequency is increasing by 3% annually, according to the study, “2014 Long Term Care, General Liability and Professional Liability Actuarial Analysis.”
The study covered 13,700 claims of 34 providers that operate about 230,000 long-term care beds. They represent 17% of the long-term care beds in the United States, and six of the 10 largest operators in the country, according to the survey.
Liability costs per bed varied widely among states. In Kentucky, where there is a lack of restrictions on tort actions, including a state constitution that prohibits limits on noneconomic damages, the projected loss rate is $9,200 per occupied bed, according to the study.
At the opposite end of the spectrum, in Texas, which has a $250,000 limit on noneconomic damages per claim, the projected loss rate is $320 per occupied bed.
“The need for long-term and post-acute care is growing, and increasing liability costs impede our ability to serve those we care for and their families,” Mark Parkinson, president and CEO of the Washington-based AHCA, said in a statement. “This report underscores the importance of delivering solutions so we can continue to provide the highest quality care and improve lives.”
Last year’s study had also projected a 5% increase in loss rates for 2014.
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