CT hospitals slash malpractice costs

Action linked to better outcomes, fewer errors
Tools

Connecticut's hospitals strive to improve patient outcomes and reduce medical errors. Their efforts have paid off with lower malpractice insurance costs, the Hartford Business Journal reported.

The state's 29 acute-care hospitals spent a collective $119.9 million on medical malpractice insurance premiums in fiscal 2012. That's down 5.6 percent from the prior fiscal year and 16.1 percent less than fiscal 2009, according to numbers released by state regulators.

Better quality of care and a fairly competitive market among insurance carriers has helped to keep premiums down, according to hospital operators. The recent mergers into larger systems also improved their bargaining power, the Journal reported. Hospitals also self-insure, usually paying the first $5 million of a claim out of their own pockets, and purchasing additional coverage for large claims. That's one reason total malpractice award payouts between 2008 and 2012--$836 million--outstripped the premiums paid. And those hospitals also receive discounts on premiums if they have robust cash reserves.

Malpractice-related costs are also on the decline elsewhere. New York City hospitals reported that their payouts were down about $3 million last year, about a 2.4 percent decrease.

But it's too early to determine whether this is an ongoing trend. A new study by the RAND Corp. suggests that the Affordable Care Act could help increase malpractice suits by as much as 5 percent in states that see large bumps in their insured populations. The study suggests malpractice premiums would rise as a result.

Malpractice costs cause friction in other parts of the country. In California, voters will decide later this year whether to lift a $250,000 cap on noneconomic-related malpractice damages, a limit that has been unchanged since 1975. Both doctors and hospitals oppose the measure, although state statute prohibits hospitals from employing doctors directly.

To learn more:
- read the Hartford Business Journal article

Related Articles:
RAND: ACA may drive malpractice claims up 5%
Capping medical malpractice awards isn't way for hospitals to go
NYC malpractice costs down $3M from 2012
Malpractice reform key to reducing costs of defensive medicine
How to reduce the malpractice threat of ACOs
2012 malpractice awards tumbled to lowest level in 10 years