Report: Catastrophic liability claims against hospitals on the rise 

Medical justice
Catastrophic liability claims are increasing, according to a new report. (Getty/yavdat)

Healthcare liability claims are on the rise, and the sticker price for the most extreme or catastrophic claims is growing the fastest, according to a new report. 

Analysts at Aon released the latest iteration of its annual look at the cost of liability claims in healthcare, and they found that claims with a value of $5 million or more have increased more quickly since 2013 than the overall rise in liability claims. The cost of those claims is also increasing, according to the report. 

The researchers looked at claims data from Beazley PLC and found that more than 1 in every 200 claims was valued at more than $10 million in 2016 and 2017. The average liability claim in 2017 was $575,000, a bump of 1.8% compared to the year prior. 

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Virginia Jones, associate director and actuary at Aon, who is one of the report’s authors, told FierceHealthcare that the increasing frequency and dollar value of claims go “hand-in-hand.” 

“When we look at frequency, there are more in recent years than in the past,” she said. “They’re growing, and they’re now larger.” 

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Jones said that a crucial piece of the study was diving into regions that would be considered “high-risk jurisdictions” for these claims and would thus be more litigious than others. These markets, along with big-ticket obstetrics claims, are driving the uptick, she said.  

The report also looks more broadly at trends in liability that providers should be keeping tabs on. Overall, Aon estimates that hospitals will annually lose $2,860 per occupied bed equivalent to liability and $5,540 for each internal medicine physician. 

When looking specifically at certain types of care, the report projects an $182 loss for each birth and a $5.73 loss for each visit to the emergency department in 2019. The average liability claim, Aon estimates, will be $44,000. Aon projects that hospital and physician liability claims will increase by 2% annually, a figure it’s stuck to over the past several iterations of its report. 

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Jones said providers can’t simply pick up and move out of the highly litigious regions, so the key to addressing this problem is for more providers to collect more data and dive into what is driving claims at their specific facilities. Using data to suss out the reason for liability claims isn’t a new strategy, she said, but there needs to be renewed interest and focus in taking advantage of analytics. 

“If we take a few more strides into our data and analytics, each organization can really tackle these large claims,” Jones said.