Reversing a downward trend, the frequency of medical malpractice claims against hospitals is rising, an insurance brokerage and risk management group has found.

The information that claims are expected to continue increasing at a 1 percent annual rate, after a decade of decrease, was contained in a report released last week by Aon Corporation and the American Society for Healthcare Risk Management (ASHRM).

Aon and ASHRM said more than 100 health care organizations representing over 1,500 facilities ranging from small community hospitals to large multistate health care systems provided loss and exposure data for the study.

Besides frequency, "the tenth annual Hospital Professional Liability and Physician Liability Benchmark Analysis" examines trends in severity and overall loss costs related to hospital and physician professional liability.

It found that one out of every four claims and 24 percent of hospital professional liability costs are associated with hospital acquired conditions such as infections and injuries, medication errors, objects left in surgery and pressure ulcers.

The study attributes much of the rise in claims to the downturn in the U.S. economy.

Changes to the Centers for Medicare and Medicaid reimbursement rules regarding so called "never-events," defined as preventable medical errors that result in serious consequences for the patient also contributed to the rise.

In addition, issuers of the report said in a statement there have been "changes in public sympathy towards health care providers."

Erik Johnson, the study author who is health care practice leader for Aon's Actuarial and Analytics Practice, said in a statement announcing the report, "Worsening economic conditions in 2008 may have influenced individuals to assert claims against hospital systems."

He noted, "In 2003 through 2007 public attention was directed on tort reform activity and prohibitive medical malpractice costs for physicians. This coincided with significant reductions in professional liability claims. As public attention shifted to other subjects, the momentum of the reductions dissipated. Recently, the public focus has evolved to discussions regarding waste, inefficiency and defensive medicine. It remains to be seen how this will influence the frequency of professional liability claims."

His analysis also found that:

o In 2010, hospital loss costs per occupied bed equivalent, a major part of the total cost of risk, are expected to increase five percent annually to $3,170.

o Claim severity, including both indemnity and defense costs, continues to increase at a consistent rate and (where claims are limited to $2 million per occurrence) they are projected to increase by 4 percent annually.

o In 2010, hospitals can expect to incur liability costs of $181 per birth in the Obstetrics Unit and $7.20 per visit in the Emergency Department.

Aon said its database of hospital professional liability claims used in the benchmark analysis includes 81,889 non-zero claims representing $9.5 billion of incurred losses and includes information for accident years 1999 to 2008.

Meanwhile, Aon also released a "Health Care Industry Report" today which said the health care industry professional liability market should remain stable for the rest of the year. However, expectations are that market pricing will increase in 2010, in part due to the increase in frequency noted in the Benchmark Analysis.

Copies of the "2009 Hospital Professional Liability and Physician Liability Benchmark Analysis," can be purchased through www.ashrm.org/store.

Special Reports /

Survey Says Malpractice Claims Rising At Hospitals

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