Liability costs will climb 5%

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Long-term care operators can expect a 5% increase in liability costs in 2014, according to a new analysis from Aon Global Risk Consulting and the American Health Care Association.

That would raise the projected annual loss ratio to about $1,940 per bed. 

The frequency of claims also is expected to rise, according to the “2013 Long Term Care General Liability and Professional Liability Actuarial Analysis.” It covered about 16% of LTC beds across various levels of care.

“Rising liability costs drive up the cost of doing business and not only threaten access to care but could ultimately cost jobs,” said AHCA President and CEO Mark Parkinson.

Texas had the second-lowest loss rate, at $300 per occupied bed, which observers attribute to that state's 2003 tort reform.

Areas with 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. 


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