Hospitals Dealing With July Malpractice Increases

By Gary Mogel

NU Online News Service, July 21, 3:58 p.m.EDT?Hospitals across the U.S. were confronted with medicalmalpractice premium increases of up to 80 percent in their July 1renewals, according to a specialist in hospital liabilityunderwriting and reinsurance.

In an interview with National Underwriter, Judy Hart,executive vice president of Bermuda-based Endurance SpecialtyInsurance Ltd., characterized as "highly erratic" the July 1renewal season, when many hospital malpractice policies renew.

"Some accounts received increases of 60 to 80 percent, whileothers had increases of 20 percent," Ms. Hart noted. "Renewalpremiums were highly dependent on loss experience and the statewhere the hospital is located," she added.

"Medical malpractice insurance premium increases have been aproblem over the past two years, affecting all health careproviders and ancillary professionals," said Ms. Hart. She pointedout that the malpractice crisis affecting physicians is receivingthe most attention in the media, but hospitals are also being hithard with increases.

"It is a severity issue," Ms. Hart said, referring to the highcost of catastrophic claims. Some insurers, such as St. Paul, haveentirely withdrawn from the market, and others have sufferedfinancial problems resulting in rating organization downgrades, sheexplained.

Ms. Hart pointed out that it is still too early to tell whethermalpractice-related tort reforms recently passed by some stateswill have an effect on hospital premiums. "In some states that havehad tort reform for a while, such as California and Michigan, ithas made a difference."

She added that federal malpractice reform appears "totally dead"now, as Congress failed to agree on a reform package.

Ms. Hart said malpractice premium pricing has fortunately notresulted in widespread closing of departments or curtailment ofmedical services. While there have been sporadic reports of suchclosures, Ms. Hart said that she is not aware of any of herhospital accounts curtailing services due to malpractice premiumincreases.