Forecast: Liability costs to top $215,000

Share this content:

Long-term care facilities can expect their annual loss rate to increase by 5% over the course of 2016, according to a new report from the American Health Care Association and Aon Global Risk Consulting.

This is the third year in a row that the loss rate — the annual amount per occupied bed it costs to defend, settle or litigate claims — has increased by 5%. The loss rates have been steadily increasing since 2010, the report found.

That increase will bump the annual loss rate for long-term care facilities from $2,030 to $2,150 per occupied bed. That means a facility with 100 occupied beds should be prepared to pay upward of $215,000 in liability expenses in 2016.

Consolidation, uncertainty about healthcare reform and solicitation campaigns from plaintiff attorneys all drive the increase, authors wrote.

The report, which was released in late November, noted that claims against long-term care facilities that were resolved under arbitration agreements had a 7% lower cost and were finalized three months earlier than claims resolved without arbitration. 

The report also projected a 3% increase in the likelihood that a facility would face a claim in 2016.