Environment offers opportunity to reduce cost of risk


The current stable medical malpractice environment presents opportunities to reduce the cost of risk.

This is according to a report by Aon and ASHRM, entitled Aon/ASHRM Hospital and Physician Professional Liability Benchmark report. The report said that nationwide, health care providers continue to experience relatively flat medical malpractice costs.

“Although overall cost levels appear to be calm, these seemingly still waters hide a system of swirling undercurrents,” said Erik Johnson, leader of the health care practice group with Aon’s actuarial & analytics practice. “Proactive organizations are using data, analytics and business intelligence to reduce costs and strengthen risk management in this stable environment. Our report helps these organizations to identify underlying problem areas, even when the overall picture looks good.”

Ron Calhoun, health care practice leader for Aon Risk Solutions, added: “Health care providers are adapting to transformations in the way services are paid for and delivered. The benchmark information in this report can serve as a diagnostic tool to identify areas where clinical integration and risk management can be used to narrow practice pattern variations and improve results.”

The benchmark study provides statistical information specific to 27 states as well as the District of Columbia. For California, a special section of the report highlights analysis of the impact of Proposition 46 – the proposed change to the Medical Injury Compensation Reform Act’s non-economic damage caps.  

The projected loss rate for hospital professional liability is $2,870 per occupied bed equivalent for events occurring in 2015. The frequency of claims is projected to be 1.69 percent per OBE and the severity of claims is expected to be $170,000 per claim.