Study reveals surge in US medical malpractice claims costs

It also found that the number of high-value claims has risen sharply

Study reveals surge in US medical malpractice claims costs

Life & Health

By Lyle Adriano

An annual report jointly prepared by Beazley and Aon has found that the average cost of a medical malpractice claims in the US has significantly increased – by 50% – since 2009.

The recently published version of the Aon/ASHRM “Hospital and Physician Professional Liability Benchmark Study” also found that there was a sharp rise in the number of claims of more than $5 million over the last four years.

Based on both Aon’s and Beazley’s hospital and physician professional liability claims databases, the study looked into trends in hospital professional liability (HPL) claims above $5 million (labeled as “large claims”), as well as their impact on the HPL insurance market.

“The average paid claim with indemnity closing in 2018 was 6% higher than in 2017,” observed Beazley US hospitals focus group leader Valentina Minetti.

Minetti also pointed out that although there were only single-digit increases each year during the study period, the cumulative effect of similar increases has bumped up the average paid claim from $400,000 in 2009 to nearly $600,000 last year.

Aon/Beazley’s study also found that large claims – those above $5 million – now comprise a larger portion of all claims than before. Compared to the 2011-2014 period, where large claims accounted for 1.2% of all claims, the 2015-2018 period saw large claims take 1.9% of all claims.

“We attribute this rise to a combination of aggressive plaintiff attorneys and generous jury awards,” commented Minetti on the increase.

“The double-digit million dollar claims are having a chilling effect on the medical liability community,” the expert concluded, adding that awards of such size could drive hospitals to increase their self-insurance, leading premiums to rise and industry capacity to decrease. It is because of this adverse domino effect that Minetti suggests that there is a “shared interest in seeing these rising costs stabilize.”

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