Liability costs climb for long-term care, analysis finds

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Liability costs climb for long-term care, analysis finds
Liability costs climb for long-term care, analysis finds

A nursing home operator with 100 beds can expect $194,000 in liability expenses in 2014, according to a new analysis from the American Health Care Association and Aon Global Risk Consulting.

Liability costs for long-term care providers are expected to increase by 5% next year, while claims frequency also is expected to climb, says the “2013 Long Term Care General Liability and Professional Liability Actuarial Analysis.” The projected national 2014 loss ratio is $1,940 per bed. 

“Rising liability costs drive up the cost of doing business and not only threaten access to care but could ultimately cost jobs,” commented Mark Parkinson, AHCA's president and CEO.
 
Areas with long-standing tort limits are “less economically attractive to attorneys,” said Christian Coleianne, associate director and actuary from Aon Global Risk Consulting. Claim frequency rates are growing in particular in Kentucky, Tennessee and West Virginia, he said.
 
Texas had the second lowest loss rate, at $300 per occupied bed, due to the state experiencing dramatic reductions since tort reform in 2003.
 
“We will continue to look for solutions, such as arbitration agreements, that can help address issues related to liability costs and tort reform,” Parkinson said.

The report aggregated 15,800 individual non-zero claims from long-term care facilities.