On September 9, 2009, President Obama, in addressing Congress, asked the Department of Health and Human Services to take action to reduce malpractice costs. By June 2010, the Administration’s Affordable Care Act and soon thereafter, the HHS Patient Safety and Medical Liability Initiative, were underway. With the goals of evaluating patient safety, providing uniformity of care, improving doctor-patient communications and reducing liability issues, health care in the United States was on the road to reform; however, a recent report by Aon Risk Solutions may have made the road a bit rocky.
Aon Risk Solutions, an international risk management consulting company, teaming with the American Society of Healthcare Risk Management (ASHRM), reports that America’s hospitals are expected to receive over 44,000 medical malpractice claims related to 2009 incidents. Aon and ASHRM’s 11th-annual Hospital Professional Liability and Physician Liability Benchmark Analysis anticipates claims costs in excess of $8.6 billion.
The report also indicates that claim severity has been increasing at a rate of four percent per year, that liability claim frequency is rising at a rate of one percent annually and that in 2010, hospitals should expect specific liability costs associated with emergency department and obstetrical care. The increases could drive medical liability costs higher than general inflation.
This report comes after medical malpractice premiums for internists, general surgeons, and obstetrician/gynecologists had continued to decline over the past three years. Tort reform and patient care initiatives have influenced reductions in medical malpractice costs. Declines in premiums are also linked to drops in malpractice claim filings; however some experts speculate that the poor economic situation, overstressed healthcare system and healthcare reform may alter that trend.
Increased liability costs could result in dramatic changes in some health care markets. Rural providers may be forced to close practices. Physicians may order more diagnostic procedures as a means of insulating themselves from liability and less as a standard of care. Disparities in the standards of care, as well as understaffing in some specialties areas, may result from the rising cost of practicing medicine.
Concentrated effort will be needed to truly understand the impact of rising medical malpractice claims and premiums on hospitals, physicians and patients. The challenges of managing liability risks may ultimately derail health care reform progress. What may be unavoidable is the reality that political, economic, legal and social factors shape the practice of medicine in our country.