CNN Money, Oct. 19, 2015
The findings, published this week in Aon’s annual benchmark analysis of hospital and professional liability, show the average cost of closed claims with indemnity reached an historic high of $463,000 in 2012 and has stayed at that elevated level since: in 2014 it stood at $459,000. However, the experience of so-called tort reform states – where non-economic damages have been capped by statute – is particularly concerning. The severity of average claims in these states has been increasing faster than elsewhere. In 2008, only 2.2% of claims from tort reform states exceeded $2,000,000. By 2013, this proportion had risen to 4.1% and last year it jumped further, to 5%.
“Tort reform, though still valuable in restraining the cost of claims, provides less effective insulation to hospitals than was originally the case,” said Steve Chang, healthcare claims team leader at Beazley. “The plaintiffs’ bar has become very adept in maximizing the economic damages which remain uncapped. Moreover, we are finding that the distinction between tort reform and non-tort reform states is becoming increasing blurred with states such as California, Maryland and Florida, all of which are tort reform states, beginning to rival their non-tort reform counterparts.”