More on the last minute Congressional action

December 13th, 2006

As the 109th Congress raced to the finish line, they left a whole lot of unfinished business. As reported here, Congress did vote to reverse the severe cut in Medicare fees that was scheduled take effect on January 1. Our friends at Kaiser have published a fuller discussion on some items of interest to physicians.

Medical malpractice

December 13th, 2006

Insurance claims against doctors, nurses and other medical professionals have stabilized for the first time in years, according to the seventh annual Aon Hospital Professional Liability and Physician Liability Benchmark Analysis. While that is good news for the medical community, the bad news is that the average size of malpractice claims continues to rise.
The study, which measured 47,735 claims representing more than $4.4 billion of incurred losses in the U.S., found that the overall frequency of medical malpractice claims has not increased for the second straight year.
While claim frequency is stabilizing, according to the study, the average size (severity) of malpractice claims continues to increase at a rate of six percent. However, the average amount paid to indemnify claimants is
increasing at a rate of only three percent, while amounts paid to defend against liability claims are growing at 17 percent as hospitals invest in claims management.
“The improved frequency rate that first emerged in the 2005 study appears to be sustained through 2006,” said Greg Larcher, director and actuary of Aon Risk Consultants and author of the analysis. “Based on study findings, we believe that the impact of past state level legislative reforms has largely been realized and we do not expect significant decreases in claim frequency or severity resulting from tort reform in the future unless other states pass legislation that withstands challenges. Patient safety initiatives being implemented today, however, may be critical for sustaining a favorable frequency trend into the future.”
This year’s study found that a statistically significant relationship exists between mortality and claim frequency in certain segments of the database. For example, after adjusting for patient volume and acuity, Texas hospitals with 200 mortalities in 2004 experienced 6 indemnity claims while hospitals with 150 mortalities experienced 4 indemnity claims. This finding gives an interesting perspective on how changes in quality might affect claim counts.
Added Larcher, “While it is logical to believe that organizations that reduce preventable harm to their patients will also reduce professional liability claim counts and costs, our study takes a first step at proving this true with data. In the long term, the industry would benefit from a more comprehensive measure of quality, beyond mortality, that measures the success of patient safety improvements and their impact on liability costs.”
More than 700 healthcare facilities provided loss and exposure data for the benchmark study. These participants range from small community hospitals to large multi-state publicly traded healthcare systems. The study also includes breakouts of claim costs and frequency trends by state and facility type, including university, specialty, long-term acute care and community.
The 2006 Hospital Professional Liability and Physician Liability Benchmark Analysis is co-sponsored by the American Society for Healthcare Risk Management (ASHRM) of the American Hospital Association. To purchase a
copy, please dial +1.800.242.2626 and request item #178701. Visit http://www.aon.com/hpl_study for more information.
You can read more of my posts on Medical malpractice here.