Nursing Home Malpractice Insurance Costs Appear To Stabilize Nationwide, Study Finds
Increases in the cost of malpractice insurance and litigation for nursing homes appear to have stabilized in the past year as more states with large nursing home populations have enacted tort reform laws, according to a study released on Wednesday by the American Health Care Association, the Wall Street Journal reports. According to the Journal, increased liability costs -- which include the cost of malpractice insurance and litigation -- have prompted some nursing homes to reduce or eliminate malpractice insurance. The study, conducted for AHCA by Aon, surveyed 76 nursing homes nationwide.
The study found that in 2004 the cost of malpractice insurance for nursing homes nationwide increased by an average of 18% in 2004, compared with an average of 51% in 2003. In addition, the study found that per-bed liability costs increased by 1.8%, or from $2,270 to $2,310, between 2003 and 2004. The study also found that the average claim size decreased from $180,000 in 2003 to $176,000 in 2004.
However, the study found that nursing homes in some states continued to experience high liability costs. In Arkansas, per-bed liability costs increased from $14,550 in 2003 to $16,980 in 2004, and such costs only decreased from $10,400 in 2003 to $10,380 in Mississippi, according to the study. Nursing homes in Arkansas and Mississippi also had large increases in the number of expensive claims, according to the study.
The study found that the nationwide stabilization of nursing home liability costs has occurred in large part because states such as Florida and Texas, which have large nursing home populations, recently have enacted laws that cap damage awards in malpractice lawsuits. In addition, some large nursing home operators that faced a number of malpractice lawsuits have sold their operations in more expensive states such as Florida, the study said (Petersen, Wall Street Journal, 4/27).