Hospital Professional Liability Claims Benchmarking Report
After peaking early in the decade, medical malpractice claims have decreased steadily through 2006. However, our latest study, the Hospital Professional Liability Claims Benchmarking Report, coauthored by sister companies Marsh and STARS Risk Technologies (formerly CS STARS) suggests that the frequency of claims is back on the rise. Whether due to the down turn in the economy or other reasons, claim frequency trends are changing and healthcare institutions need to adapt. Facilities should look to use all tools available to assess their performance and make informed decisions about their quality and patient safety initiatives.
To identify the current trends in the healthcare industry, Oliver Wyman’s actuarial practice, along with Marsh and STARS Risk Technologies recently analyzed over 30,500 claims worth more than $4.1 billion. The claims and exposures were from hospital systems in 43 states (including Washington, DC) across the country. A diverse representation of non-for-profit, university, religious and community facilities were examined.
Highlights of the Study
- Claim frequencies are on the rise after a consistent decrease over the prior 6 years. Religious owned and University owned systems saw the greatest increases.
- The increase in frequency in 2007 was experienced across all hospital departments that are measured in this report, as well as in most states, with Texas being a notable exception.
- For-profit systems showed the lowest average claim severity and the highest ratio of loss expense to indemnity. This may suggest that the for-profit health systems are more inclined to spend more to defend claims and are yielding positive returns.
- Since 2000, indemnity payments have increased at a modest pace. However, legal expenses have increased more sharply, especially for claims closed 2005 and later. The average annual increase in legal expenses is more than double the average annual increase in indemnity payments.
- The average delay between occurrence and reporting of claims continues to decrease.
