Medical Malpractice Claims No Longer Legal Juggernaut
With the attention paid to medical malpractice claims by the news and popular culture, a common public perception is that the number of such lawsuits is skyrocketing.
December 03, 2010 /24-7PressRelease/ -- With the attention paid to medical malpractice claims by the news and popular culture, a common public perception is that the number of such lawsuits is skyrocketing. Another frequent public concern is that all too often the dollar amounts of such claims are staggering, and too many plaintiffs are asking for unreasonable compensation. In reality, however, these sentiments are far from accurate: a recent report shows that the frequency of medical malpractice claims is slightly declining, and claims severity (or the average amount per claim) is leveling off.
The Details in the Data
The report was released by Zurich, one of the leading insurers of hospitals and health care organizations throughout North America. Zurich in North America is a part of Zurich Financial Services Group, an insurance-based financial services provider that employs approximately 60,000 people and has offices in more than 170 countries. In the fifth annual Zurich benchmarking report on claims trends in the healthcare industry, data from 1,600 hospitals in the years 1997 through 2007 was collected and analyzed.
The results of the Zurich report are somewhat surprising. For example, over the last several years, claims frequency (determined by comparing the number of occupied beds to the number of legal claims) is actually on the decline. Currently, claims frequency is 1.96 claims per 100 Occupied Bed Equivalents (the unit used to measure hospital occupancy). Several factors could be causing the decline: tort reform, the impact of risk management and patient safety initiatives, and improvements in patient care have all been cited as likely contributors.
In addition to the frequency of medical malpractice claims, the Zurich report also examined the severity of such claims. The average amount per claim has risen annually by 4 percent over the past 11 years. Last year's report, however, indicated that claims had risen annually by 6 percent over the 11 years prior to that survey. This displays the recent trend toward stabilization in the amount asked for in medical malpractice suits. Authors of the study also note that it is important to distinguish which type of claims account for the yearly increases. The largest claims, for the most part, are not getting larger; rather, growth in the severity of medium or "typical" claims accounts for the bulk of the increases.
As it turns out, the nature of health care institutions has a lot to do with the severity of malpractice claims they face. Currently, for-profit and government hospitals show very similar severity of claims. Non-profit hospitals, on the other hand, have the lowest claims severity. Within the non-profit segment, church-based and non-church based institutions faced a similar frequency of claims. But, severity of claims in church-based facilities is significantly lower than their non-church counterparts: over the course of the study, church-based hospitals had a 30 percent lower average severity of claims. These findings are strengthened by a separate study released by Thomson Reuters in August 2010 that found "Catholic and other church-owned systems are significantly more likely to provide higher quality performance and efficiency to the communities served than investor owned systems" or "secular not-for-profit health systems." The authors of the Zurich report caution that they cannot definitively correlate the higher quality performance shown by the Reuters study with their own findings; still, they intend to continue to review the Thomson Reuters findings in the future.
Finally, average claim amounts varied by the geographic location of care facilities. New York, Illinois and Pennsylvania continue to be the most severity prone states. While the reasons certain states face higher claims severity are not entirely clear, Leo Carroll, head of Healthcare-Specialty Products, Zurich North America Commercial, says that his company is "continuing to monitor the impact to claim activity by changes in tort reform, patient safety initiatives, and use of technology to improve quality of care."
Medium Claims: An Avenue for Improvements in Care
While very large claims -- defined in the Zurich report as those over $5 million -- often receive the most media attention, in reality they comprise only 0.3 percent of all medical malpractice claims (800 out of 240,000 claims examined over the past 11 years have been greater than $5 million).
Far more typical are medium-sized claims that are valued at under $1 million. These claims are viewed as the industry standard for patients seeking fair compensation. In the aggregate, medium-sized claims can also serve as a powerhouse for increasing the standard of care in hospitals.
If you or a loved one has a possible medical malpractice claim, it is important to contact an attorney as soon as possible. An attorney can help you recover monetary damages, and ensure that your case is part of the solution in establishing a higher standard of care for all patients.
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