Indiana hospitals hit hard by malpractice costs

Hospitals in the Hoosier State are getting clobbered by rising medical malpractice insurance costs.

Hospitals statewide are experiencing their third straight year of double-digit percentage increases in premiums, according to the Indianapolis Business Journal.  Money is pooled into a state fund to pay patients who suffer from medical injuries related to malpractice. The fund has lost $100 million or more annually over the past four years due to a high volume of judgments being paid. In 2013, it paid out $176 million--a record since the fund was established in the 1970s, according to the Business Journal.

The fund has run at a deficit 10 out of the last 18 years. Given the cap on damages will rise from $1.25 million to $1.65 million next year, hospital officials are worried that rates will continue to rise.

Malpractice claims against hospitals have been rising nationwide. In 2014, they topped an average of $500,000 for the first time, according to data from the American Society for Healthcare Risk Management.

Moreover, physicians and hospitals are no longer the sole malpractice targets. Nurses are also being sued for medical malpractice, and judgments are being awarded in ever-increasing amounts. They totaled $90 million against nurses between 2010 and 2014, according to the Nurses Service Organization.

Meanwhile, the state's hospital community said the fund has been operated in a reactionary manner.

"Most healthcare providers would like to avoid the volatility of the annual...rate changes, which appear to be issued in reaction to the prior year's losses," Michele Calderon Johns, chief risk officer for Indiana University Health, told the Business Journal. That hospital system paid $13.6 million into the fund last year.

To learn more:
- read the Indianapolis Business Journal article