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Professional Liability Costs for Hospitals and Physicians Continue to Rise, Outpacing Inflation
Date:10/12/2010

xpected expense.

Loss rates, which measure the total cost of medical malpractice claims per hospital bed, are expected to grow 5 percent annually. In 2011, hospitals are expected to experience a rate of $3,280, reflecting a $150 increase from 2010's expected rate of $3,130 and a $300 rise from 2009's rate of $2,980.  

From 2000 to 2006, tort reforms, patient safety initiatives and sympathetic public attitudes were influential in the reduction of medical malpractice costs. Today, there is less momentum associated with establishing new tort reforms and existing tort reforms face serious legal challenges in several states.

"The uncertainties of health care reform and difficult economic times represent significant sources of risk for many hospital systems," said Erik Johnson, Health Care Practice leader for Aon Risk Solutions' Actuarial and Analytics Practice and author of the analysis. "While many hospitals have grown accustomed to declining professional liability costs, the underlying claim frequency and severity cost drivers have entered a period of growth. Whether commercially insured or self-insured, hospitals and physicians should prepare for increases to their professional liability costs in the coming years."

Dominic Colaizzo, managing director of Aon Risk Solutions' Health Care Practice added, "This challenging environment increases the pressure on health care providers to seek the most appropriate and cost-effective

SOURCE Aon Corporation
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