Report: Liability costs expected to rise in 2016

Liability costs for skilled nursing centers are still on the rise, according to a new analysis from Aon Global Risk Consulting and the American Health Care Association (AHCA).

The 2015 Long Term Care General Liability and Professional Liability Actuarial Analysis projects the national loss rate to rise from $2,030 per occupied bed to $2,150 in 2016. A skilled nursing facility with 100 beds could incur $215,000 in liability expenses next year, the report noted.

Quickly-changing business environments and a litigation-minded society aren’t helping, said Barry Weiner, Aon’s healthcare practice managing director. “Consolidation in the health care industry, uncertainty around health care reform and increasingly effective solicitation campaigns from plaintiffs’ attorneys are all factors impacting the long term care sector,” he said in a release. “The findings in the analysis deliver tremendous value to providers in helping them effectively navigate this complex landscape.”

The report considers national trends as well as individual state trends for 18 states. The 2015 data mirrored last year’s data, where Kentucky ranked as the most expensive loss rate of the state examined, whereas Texas, a state that has enacted substantive tort reforms, has a loss rate far below the national average.

Claims that sought arbitration as an alternative to traditional litigation saw seven percent lower costs and faster turnarounds, the report noted. “The report validates what we have been saying about arbitration,” said Mark Parkinson, president and CEO of AHCA in a release. “Arbitration is an important way to help protect the legal rights of patients and their families while providing a faster resolution of disputes. It also reduces costs for patients and their families, the nursing center, and the health care system.”

The report examined 17,600 claims from 35 providers, who combined operate 240,000 beds across the long-term care spectrum. The report data pool includes six of the 10 largest operators and accounts for approximately 17 percent of all long-term care beds in the country.

Read the full report here.

Topics: Executive Leadership , Finance , Risk Management