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Medical malpractice claim frequency, costs stabilizing: Study

Posted On: Oct. 29, 2013 12:00 AM CST

Medical malpractice claim frequency, costs stabilizing: Study

AUSTIN, Texas — Medical malpractice claim frequency is expected to remain flat in the next year, while the cost of med mal claims has seen the smallest increase in more than a decade, according to a joint study by Aon Risk Solutions and the American Society for Healthcare Risk Management.

The study, released Tuesday during ASHRM's annual conference in Austin, Texas, projected no increase in hospital professional liability claim frequency for 2014. Meanwhile, med mal claim severity, including defense costs, is growing by 2.5% annually, which is the lowest rate of severity growth in the report's 14-year history.

“This risk appears to be fairly under control and fairly stable,” said Erik Johnson, Raleigh, N.C.-based health care practice leader for Aon Risk Solutions' actuarial and analytics practice, in a presentation at the ASHRM conference.

The report estimated that med mal claims in 2014 will represent 60 cents in costs for every $100 of hospital revenue, or $135 per average hospital admission.

Hospitals have been reducing med mal costs in part by improving patient safety and self-insuring to cover malpractice claims, the study said.

“Health care professional liability claims are subject to a complicated set of geographic, societal, and technological influences,” Mr. Johnson said in a statement released early Tuesday. “These forces are largely in-check, resulting in a low inflationary environment for medical malpractice.”

Aon and Dublin-based insurer and reinsurer Beazley P.L.C. also performed an analysis of high-severity med mal claims with costs of more than $2 million.

Valentina Minetti, London-based underwriter and pricing actuary for Beazley's health care specialty lines, told ASHRM conference attendees that Washington, Philadelphia, and Cook County, Ill., had the highest frequency of high-severity med mal claims.

However, she noted that states with tort reform laws, such as California and Maryland, have seen a recent increase in med mal claim severity that is steeper than the national trend.

Beazley claims managers “are seeing record verdicts in states that are not necessarily the usual suspects,” Ms. Minetti said. “States like Wyoming, Maine, Virginia and Colorado have all had state record verdicts in the last 12 to 24 months.”

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