The frequency of medical malpractice claims has declined onepercent over the past year, according to a just-released analysisby Chicago-based Aon.

In its report=="2005 Hospital Professional Liability andPhysician Liability Benchmark Analysis"==released today, Aonreported that while frequency dropped slightly, the average cost(severity) of each malpractice claim grew at a rate of 7.5percent.

According to Aon, this is the first time in the history of thestudy that the frequency trend decreased for both hospitals andphysicians.

In a statement announcing the report findings, Greg Larcher,assistant director and actuary of Aon Risk Consultants explained,"We believe that legislative reforms in several states over thelast few years are contributing to the reduction in claims."

Mr. Larcher, the report author, said: "In addition, the medicalmalpractice availability and affordability crisis of the lastseveral years has resulted in a rapidly growing alternative market.Healthcare systems now have a greater financial incentive to reducetheir cost of risk."

Greg Morris, chief operating officer of Aon Healthcare,attributed the decline to actions taken by healthcare systems toimprove quality of care. He said that "a heightened awareness ofhow quality care and patient safety tie directly to the cost ofrisk" have also likely played a role in the decline.

The Aon study examines more than 200,000 hospital bedequivalents and represents approximately 10 percent of the hospitalprofessional liability market, and 15 percent of the alternativesegment of the market.

In total, the analysis database contains 53,000 non-zero claims,representing $4.5 billion of incurred losses, and includeshistorical claims information for 10 years (1995 to 2004).

The study also includes breakouts of claim costs and frequencytrends by facility type, including university, specialty,religious, publicly traded and community.

The 2005 Hospital Professional Liability and Physician LiabilityBenchmark Analysis is co-sponsored by the American Society ofHealthcare Risk Managers.