27 November 2019Analysis

US medical malpractice claim costs up 50% since 2009: Beazley

The average cost of a medical malpractice claim has increased by 50 percent in the US since 2009, according to Beazley, an insurer of hospital professional liability.

Beazley also noted a sharp rise in the number of claims of more than $5 million over the last four years.

The findings were published by Beazley and Aon, in an article about the HPL insurance market, contained in the latest annual Aon/ASHRM Hospital and Physician Professional Liability Benchmark Study. The article analysed trends in HPL claims above $5 million and the impact on the HPL insurance market.

The analysis examined data from Aon’s hospital and physician professional liability claims database, and Beazley’s database of more than 850,000 unique professional liability claims, representing 47 percent of all US hospital beds.

Valentina Minetti, US hospitals focus group leader at Beazley, said: “The average paid claim with indemnity closing in 2018 was 6 percent higher than in 2017. While that is only a single-digit increase from year to year, the cumulative effect of similar rises has taken the average paid claim from $400,000 in 2009 – to almost $600,000 last year.”

Claims larger than $5 million now comprise a much greater portion of all claims than in years past, Beazley also found. Between 2015 and 2018 such claims represented 1.9 percent of total claims, versus 1.2 percent in the four years to 2014. In the early 2000s these larger claims were less than 1 percent of the total.

Minetti said Beazley attributes this rise to a combination of aggressive plaintiff attorneys and generous jury awards.

“The double-digit million dollar claims are having a chilling effect on the medical liability community,” she said. “Awards of this size drive hospitals to increase their self-insurance, can cause premiums to rise and industry capacity to decrease, so there is certainly a shared interest in seeing these rising costs stabilise.”