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 medical malpractice premium increases of up to 80 percent in their July 1 renewals, according to a specialist in hospital liability underwriting and reinsurance.

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

"Some accounts received increases of 60 to 80 percent, while others had increases of 20 percent," Ms. Hart noted. "Renewal premiums were highly dependent on loss experience and the state where the hospital is located," she added.

"Medical malpractice insurance premium increases have been a problem over the past two years, affecting all health care providers and ancillary professionals," said Ms. Hart. She pointed out that the malpractice crisis affecting physicians is receiving the most attention in the media, but hospitals are also being hit hard with increases.

"It is a severity issue," Ms. Hart said, referring to the high cost of catastrophic claims. Some insurers, such as St. Paul, have entirely withdrawn from the market, and others have suffered financial problems resulting in rating organization downgrades, she explained.

Ms. Hart pointed out that it is still too early to tell whether malpractice-related tort reforms recently passed by some states will have an effect on hospital premiums. "In some states that have had tort reform for a while, such as California and Michigan, it has 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 not resulted in widespread closing of departments or curtailment of medical services. While there have been sporadic reports of such closures, Ms. Hart said that she is not aware of any of her hospital accounts curtailing services due to malpractice premium increases.

Special Reports /

Hospitals Dealing With July Malpractice Increases

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