Report: Malpractice claims slowing, expenses growing

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The number of malpractice claims in long-term care has dropped steadily over the last five years, according to a new report.

"Claims in long-term care have declined in frequency over the last few years, which is consistent with what we've seen with hospitals as a whole," said Leon Gottlieb, a principal of Oliver Wyman Actuarial Consulting, an operating unit of Marsh & McLennan Companies, which conducted the study.

Researchers said the reasons for the improvement can be attributed to better quality care, wider use of technology and, in some locales, tort reform.

The study, "Hospital Professional Liability Benchmarking Report," examined more than 350 healthcare facilities in 41 states. Included were nearly 9,000 long-term care beds.
Actual-loss payments in long-term care were only about 60% ($85,381) of the overall average, which was boosted by acute-care, teaching and "other" facilities.

While payout costs have moderated, expenses have been growing rapidly. Gottlieb said that while percentage of costs that represented legal fees was about 15% in the late 1990s, the figure has grown to close to 20% today.

"We've spoken to various risk managers and they feel that the cases actually being asserted are higher quality cases. A lot of the less meritorious claims are not getting anywhere," Gottlieb said.

"For-profit systems showed the lowest average claim severity and the highest ratio of loss expense to indemnity," he added. "This may mean that the for-profit health systems are more inclined to spend more to defend claims and that yields a positive return."

Long-term care claims get reported relatively quickly after the time of the incident, researchers noted.

"About 80% of claims are filed within 12 months, whereas many others stretch farther toward the two-year statute of limitations," Gottlieb said.