Compliance

Report: Medical Malpractice Costs Expected to Rise

By Staff Report

Oct. 13, 2010

Claim frequency against hospitals combined with increased claim severity is expected to drive up medical malpractice liability costs in 2010 and 2011 for hospitals and physicians, according to a report released Oct. 13 by Aon Risk Solutions.

U.S.-based hospitals are expected to face more than 44,000 claims arising from incidents occurring in 2009, according to the report, Hospital Professional Liability and Physician Liability Benchmark Analysis, which Aon Risk Solutions put together with the American Society for Healthcare Risk Management.

The report, which is in its 11th year, confirms an emerging change in the liability environment, Aon Risk Solutions, the global risk management business for Chicago-based Aon Corp., said in a written statement.

The report anticipates that 2009 claims costs will exceed $8.6 billion, with claims primarily stemming from key hospital risk areas—obstetrics units and emergency departments—that make up more than one-quarter of expected expenses, Aon Risk Solutions said in a written statement.

Meanwhile, the total cost of medical malpractice claims per hospital bed is expected to grow 5 percent annually, according to the report, which added that hospitals are expected to experience a loss rate of $3,280 in 2011, a $150 increase from 2010’s expected loss rate and a $300 rise from 2009’s loss rate.

“The uncertainties of health care reform and difficult economic times represent significant sources of risk for many hospital systems,” said Erik Johnson, health care practice leader for Aon Risk Solutions’ actuarial and analytics practice and author of the report’s analysis, in a written statement. “While many hospitals have grown accustomed to declining professional liability costs, the underlying claim frequency and severity cost drivers have entered a period of growth. Whether commercially insured or self-insured, hospitals and physicians should prepare for increases to their professional liability costs in the coming years.”

The report’s analysis covers 119 hospital systems and more than 1,800 facilities, representing 23 percent of the total U.S. hospital industry segment.   

Filed by Jeff Casale of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

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