Big malpractice verdicts becoming more frequent, report finds

The average loss incurred from professional liability claims continues to increase due to a rising frequency of large medical malpractice verdicts, according to a new report published by Aon Plc. and the American Society for Health Care Risk Management.

The report, released Oct. 15, aims to provide healthcare leaders with a better understanding of their cost of risk compared to an industry benchmark. The report used data from more than 127 healthcare systems and 105,000 claims to predict 2020 liability. 

Five things to know:

1. The number of professional liability claims filed against hospitals and physicians is expected to remain flat, while claim severity, including defense costs, is anticipated to grow by 2 percent annually. 

2. For the upcoming 2020 accident year, assuming the loss is limited to $2 million per occurrence, researchers predicted that hospitals will experience an annual loss rate of $2,960 per occupied bed equivalent and $5,260 per full-time internal medicine employed physician. 

3. The report found that the frequency and average severity of losses greater than $5 million will continue to increase. 

4. The average indemnity paid for claims reaching $5 million or more is now $10 million, compared to $8.6 million a few years ago.

5. Hospitals with greater patient satisfaction scores had lower professional claims filed against them.

"This helps support the conclusion that there is clearly a human element, a broken relationship, or an unfulfilled expectation underlying many [professional liability] claims," the report authors wrote. 

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