Medical malpractice claim costs remain stable


The cost of medical malpractice is growing at the slowest rate in the 14 year history of a newly released report that specifically covers this sector.

The Aon/ASHRM Hospital and Physician Professional Liability Benchmark report is the result of a long-running collaboration between Aon Risk Solutions, the global risk management business of Aon, in conjunction with American Society of Healthcare Risk Management (ASHRM).

“We project zero growth in the number of malpractice claims," said Erik Johnson, healthcare practice leader for Aon's Actuarial and Analytics Practice and author of the analysis. “Healthcare professional liability claims are subject to a complicated set of geographic, societal, and technological influences. These forces are largely in-check, resulting in a low inflationary environment for medical malpractice.”

New in this year's report is the use of hospital admissions and revenue as a basis for benchmarking medical malpractice cost levels. The report estimates that in 2014 medical malpractice claims will represent $0.60 per every $100 of hospital revenue or an average of $135 per hospital admission.

According to the report, healthcare organizations are achieving efficiencies and savings by employing physicians and using their self-insurance facilities to cover medical malpractice. The cost savings are achieved by promoting patient safety, uniformity of risk management and jointly defending claims, when they happen.

However, Johnson warns: “Some costs that would have traditionally been covered by the physician are now shifted to the hospital."

Ron Calhoun, managing director of Aon Risk Solutions Healthcare Practice, added, "Risk management involvement and investment in patient safety have translated into improved medical malpractice results. Hospitals are focused on containment of traditional risks such as medical malpractice while they take on new opportunities introduced by the Accountable Care Act and the transition from fee-for-service models and into outcome-based models."


medical malpractice, Aon/ASHRM Hospital and Physician Professional Liability Benchmark report, Aon Risk Solutions, ASHRM