Claims management and tort reforms make impact; patient safety and
quality-of-care efforts point to future improvements
CHICAGO, Oct. 23 /PRNewswire-FirstCall/ -- Insurance claims against
doctors, nurses and other medical professionals have stabilized for the
first time in years, according to the seventh annual Aon Hospital
Professional Liability and Physician Liability Benchmark Analysis. While
that is good news for the medical community, the bad news is that the
average size of malpractice claims continues to rise.
(Logo: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO )
The study, which measured 47,735 claims representing more than $4.4
billion of incurred losses in the U.S., found that the overall frequency of
medical malpractice claims has not increased for the second straight year.
While claim frequency is stabilizing, according to the study, the average
size (severity) of malpractice claims continues to increase at a rate of
six percent. However, the average amount paid to indemnify claimants is
increasing at a rate of only three percent, while amounts paid to defend
against liability claims are growing at 17 percent as hospitals invest in
claims management.
"The improved frequency rate that first emerged in the 2005 study
appears to be sustained through 2006," said Greg Larcher, director and
actuary of Aon Risk Consultants and author of the analysis. "Based on study
findings, we believe that the impact of past state level legislative
reforms has largely been realized and we do not expect significant
decreases in claim frequency or severity resulting from tort reform in the
future unless other states pass legislation that withstands challenges.
Patient safety initiatives being implemented today, however, may be
critical for sustaining a favorable frequency trend into the future."
This year's study found that a statistically significant relationship
exists between mortality and claim frequency in certain segments of the
database. For example, after adjusting for patient volume and acuity, Texas
hospitals with 200 mortalities in 2004 experienced 6 indemnity claims while
hospitals with 150 mortalities experienced 4 indemnity claims. This finding
gives an interesting perspective on how changes in quality might affect
claim counts.
Added Larcher, "While it is logical to believe that organizations that
reduce preventable harm to their patients will also reduce professional
liability claim counts and costs, our study takes a first step at proving
this true with data. In the long term, the industry would benefit from a
more comprehensive measure of quality, beyond mortality, that measures the
success of patient safety improvements and their impact on liability
costs."
More than 700 healthcare facilities provided loss and exposure data for
the benchmark study. These participants range from small community
hospitals to large multi-state publicly traded healthcare systems. The
study also includes breakouts of claim costs and frequency trends by state
and facility type, including university, specialty, long-term acute care
and community.
The 2006 Hospital Professional Liability and Physician Liability
Benchmark Analysis is co-sponsored by the American Society for Healthcare
Risk Management (ASHRM) of the American Hospital Association. To purchase a
copy, please dial +1.800.242.2626 and request item #178701. Visit
http://www.aon.com/hpl_study for more information.
About Aon
Aon Corporation ( http://www.aon.com ) (NYSE: AOC) is a leading
provider of risk management services, insurance and reinsurance brokerage,
human capital and management consulting, and specialty insurance
underwriting. There are 46,000 employees working in Aon's 500 offices in
more than 120 countries. Backed by broad resources, industry knowledge and
technical expertise, Aon professionals help a wide range of clients develop
effective risk management and workforce productivity solutions.
About ASHRM
The American Society for Healthcare Risk Management (ASHRM) is a
personal membership group of the American Hospital Association with more
than 5,000 members representing clinical care, insurance, law and other
related professions. ASHRM initiatives focus on developing and implementing
safe and effective patient care practices, the preservation of financial
resources and the maintenance of safe working environments.
For more information, contact:
Raphaele Schnoll, +1.312.755.3592, raphaele.schnoll@kemperlesnik.com
or
Al Orendorff, +1.312.381.3153, al_orendorff@aon.com
This press release contains certain statements related to future
results, or states our intentions, beliefs and expectations or predictions
for the future which are forward-looking statements as that term is defined
in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from either historical
or anticipated results depending on a variety of factors. Potential factors
that could impact results include: general economic conditions in different
countries in which we do business around the world, changes in global
equity and fixed income markets that could affect the return on invested
assets, fluctuations in exchange and interest rates that could influence
revenue and expense, rating agency actions that could affect our ability to
borrow funds, funding of our various pension plans, changes in the
competitive environment, our ability to implement restructuring initiatives
and other initiatives intended to yield cost savings, our ability to
execute the stock repurchase program, our ability to consummate the pending
sale of the Aon Warranty Group, changes in commercial property and casualty
markets and commercial premium rates that could impact revenues, changes in
revenues and earnings due to the elimination of contingent commissions,
other uncertainties surrounding a new compensation model, the impact of
investigations brought by state attorneys general, state insurance
regulators, federal prosecutors, and federal regulators, the impact of
class actions and individual lawsuits including client class actions,
securities class actions, derivative actions, and ERISA class actions, the
cost of resolution of other contingent liabilities and loss contingencies,
and the difference in ultimate paid claims in our underwriting companies
from actuarial estimates. Further information concerning the Company and
its business, including factors that potentially could materially affect
the Company's financial results, is contained in the Company's filings with
the Securities and Exchange Commission.
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