government
Long-term care medical liability costs go up
NEWS IN BRIEF — Posted July 23, 2012
Medical liability costs for long-term care are rising by 4% annually and are projected to keep growing into 2013, according to a study by Aon Global Risk Consulting. Although these costs are increasing, “the frequency of claims has declined over time. State-by-state medical liability reform has a clear impact on preserving access to long-term care services while reducing providers’ medical liability costs,” the study said.
The American Health Care Assn. and the National Center for Assisted Living commissioned Aon to conduct the study, which reviewed about 19,500 claims from 37 long-term care providers.
“Rising liability costs add to the many challenges already facing our profession,” former Kansas Gov. Mark Parkinson, now president and CEO of AHCA/NCAL, said in a statement. “Lengthy, costly litigation drives up costs for our residents, long-term care facilities and ultimately taxpayers. This analysis shows costs exploding in states without meaningful, effective medical liability reform. As state and federal governments search for ways to contain health care costs, this is one area that warrants close examination.”
Claim severity and loss rates have been growing since 2009 at a rate of 4% each year, even though the frequency of claims has been stable since 2008. “Since 2005, liability costs have grown from $1,040 to a projected $1,480 in 2012. Costs are expected to increase again in 2013 to $1,540 per bed,” the study stated.
Pre-dispute arbitration agreements in long-term care settings have proven to be effective, despite being limited by statute or challenged in the courts in some states, the study concluded. Claims settled using alternative dispute resolution agreements are 21% less costly than other claims.
“The average total cost of an outcome subject to an arbitration agreement is about $140,000, while the average cost of a nonarbitrated outcome is about $180,000,” according to the study.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2012/07/23/gvbf0723.htm.
