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New Insurance Study on Hospital Malpractice Liability

Recently, the Aon/ASHRM Hospital and Physician Professional Liability Benchmark report was released for 2013. According to an article on the release from Claims Journal, this marked the fourteenth year that the study has been conducted. Considering that the project has been underway for nearly a decade and a half, it offers a helpful example of trends in the area of professional liability. Of course, it must be kept in mind that the report is crafted from the insurance perspective, but it is still useful to examine the results to get a feel for one analysis of current malpractice claim and insurance trends.

The Results
Perhaps the most headline-grabbing takeaway from the report is that the rate of medical malpractice growth is at the lowest in the entire history of the report itself. This reflects the same results we have seen time and again in similar reports–medical malpractice payouts are lower than ever. This basic fact is contrary to the claims of so many who continue to push for various tort “reform” efforts to take away even more rights from injured patients.

In fact, far from showing the small “growth” the report conceded that there is no growth at all in malpractice claims and payouts. The story notes that “the cost savings are achieved by promoting patient safety, uniformity of risk management and jointly defending claims, when they happen.”

All told, according to the report, less than.6% of all hospital revenue is paid out in a medical malpractice claim. That amounts to sixty cents for every one hundred dollars earned by a hospital. This reality–coming from an insurance group, no less–is a stark reminder that these payments followed errors have next to nothing to do with rising healthcare costs overall. Even if every single malpractice payout was eliminated, hospital profits would not even register the blip.

Keep in mind, that if that scenario did take place, the costs would not disappear, they would just be shifted to the taxpayer. Instead of medical facilities responsible for the errors paying for the consequences of the error, those costs would be borne by private parties and public support programs like Medicare and Medicaid. Often lost in these debates is the fact that malpractice awards are not mere jackpot lottery winnings for patients–they compensate for losses. Eliminating the payout does just mean the costs has to come from somewhere else.

Re-Focus the Debate
It is becoming increasingly clear that we need to shift the national dialogue away from completely misleading claims about the role of medical malpractice claims in rising healthcare costs. Instead, we need to talk about the role of those who profit from the rising costs. As in all large-scale public issues, some interests are winning as a result of increased costs and some are losing. Any true resolution to get the costs in check must look closely at the conduct of those who benefit from the rising costs.

For help with any sort of medical malpractice issue in Chicago or throughout Illinois, please feel free to contact our attorneys today.

See Other Blog Posts:

Doctor Admits – Malpractice Costs Are not the Problem

The Problem with Forced Arbitration