CHICAGO (Oct. 20, 2015) – Nationwide, health care systems continue to experience relatively flat medical malpractice costs according to the Aon/ASHRM Hospital and Physician Professional Liability Benchmark report. The 2015 report was released today by Aon Risk Solutions, the global risk management business of Aon plc (NYSE: AON), in conjunction with the American Society for Healthcare Risk Management.
While medical malpractice trends remain stable, health care systems continue to focus on an emerging risk - cyber exposure. Effective delivery of health services requires organizations to collect, store and share massive amounts of confidential patient data. Health care systems are working to safeguard data, identify exposures, and strategically evaluate combinations of commercial and self-insurance insurance coverage. The 2015 Hospital and Physician Professional Liability Benchmark report provides risk managers with a survey of the dynamics of health care cyber liability and the cyber insurance market.
Additionally, the study indicates that future medical malpractice claim trends will likely be linked to patients’ relationships with, and expectations of, their providers. Patient satisfaction scores continue to show a correlation to medical malpractice claim frequency while more clinical measures of quality do not seem to be statistically linked to malpractice claims.
“We have observed that systems having better patient satisfaction scoring tend to have fewer medical malpractice claims,” said Ron Calhoun, health care practice leader for Aon Risk Solutions. Mr. Calhoun adds, “Given the increase in financial responsibility borne by patients, it will be interesting to see if that influences patient satisfaction and the patient-provider relationship. That may have an impact on medical malpractice in years to come.”
The 2015 report examines several trends from useful vantage points, including:
Cause of Loss Statistics
This benchmark study details average claim severity and frequency by cause of loss, including:
- Listings of the top 10 most severe and most frequent causes of medical malpractice claims
- A deeper dive into causes of loss underlying the high severity of birth related claims
Insurance Buying Practices
Participants in the benchmark study completed a survey indicating how they coordinate commercial insurance with their self-insurance programs. Survey results presented in this report include:
- Attachment points and total insurance limits for small and large organizations
- Use of self-insurance for coverage of employed physicians
New Service Line Statistics
This benchmark study provides benchmark frequency and severity measures for four specific hospital departments, including obstetrics, emergency departments, behavioral health units and rehabilitation units.
Claim frequency and severity benchmarks by state
Statistical information specific to 26 states as well as the District of Columbia is analyzed, providing state-specific benchmarks for:
- The frequency and severity of claims within these states
- The average indemnity payments and expenses for claims recently closed within the states
Noteworthy statistics from the 2015 Aon/ASHRM Hospital Professional Liability Benchmark report
- Projected loss rate for hospital professional liability is $2,800 per occupied bed equivalent (OBE) for events occurring in 2016. The frequency of claims is projected to be 1.64 percent per OBE and the severity of claims is expected to be $171,000 per claim.
- Projected loss rate for physician professional liability is $5,130 per class 1 (internal medicine) physician for events occurring in 2016. The frequency of claims is projected to be 2.93 percent per class 1 physician and severity of claims is expected to be $175,000 per claim.
- Projected loss rate for hospital general liability is $118 per OBE; the average general liability claim is expected to be $37,000 for claims occurring in 2016.
- Projected loss rate for obstetrics claims occurring in 2016 is $172 per birth; emergency department is $5.86 per visit; behavioral health is $2,000 per occupied psychiatric bed; and rehabilitation is $1,260 per rehabilitation bed.
- The Aon/ASHRM Hospital and Physician Professional Liability Benchmark database includes claims from all U.S. states and provides specific benchmarks for 26 states as well as the District of Columbia. Of the 26 states, Florida ($8,710) has the highest projected loss rates for 2016 while Indiana ($750) and Minnesota ($830) have the lowest projected loss rates for 2016.Using their excess claims database, Beazley Group provides analytics detailing the increasing severity of the largest claims by venue and highlighting the growing number of claims hitting excess layers of coverage.
To purchase a copy of the 2015 Aon/ASHRM Hospital and Physician Professional Liability Benchmark report, visit ASHRM online store: http://www.ashrm.org/store.
About the 2015 Aon/ASHRM Hospital and Physician Professional Liability Benchmark report
The database includes 110 U.S. health care systems, representing 29 percent of the total U.S. hospital industry. Data collected includes approximately 100,000 non-zero claims, representing more than $17 billion of incurred losses. The database contains historical claim information for 10 accident years (2005 to 2014). All ASHRM members were invited to participate in the study, which is designed as a hands-on tool to provide health care risk managers with a better understanding of their cost of risk compared to an industry benchmark. Through measurement, analysis and comparison of the claim and exposure data, risk managers can develop proactive strategies to help reduce risk related costs and improve related outcomes.
Health care risk managers and health care professionals interested in calculating their facility's loss cost may access the Hospital Professional Liability Benchmark Calculator. This online rater calculates 2016 prospective loss rates based on exposure data input by the user. Register to access the 2015 HPL Calculator
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon’s global partnership with Manchester United.
The American Society for Healthcare Risk Management (ASHRM), is a personal membership group of the American Hospital Association (AHA). ASHRM supports healthcare risk managers by serving as their voice, building awareness about the profession, delivering the information they need and fueling their career development. Today, over 6,000 members and 42 affiliated local chapters represent ASHRM’s variety of healthcare-related entities with clinical, legal and financial interests.
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