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Variations in hospital malpractice costs, 1983-1985.
1Health Economics Research, Needham, MA 02194.
Summary
Hospital liability insurance costs increased due to purchasing more coverage, not higher rates. Malpractice insurance costs per dollar remained constant between 1983-1985, but Medicare inequities persist.
Area of Science:
- Healthcare Economics
- Medical Malpractice Law
Background:
- Rising hospital liability costs impact the provision of complex, high-risk procedures.
- Assessing trends in malpractice coverage costs is crucial for hospital financial stability.
Purpose of the Study:
- To analyze the costs of malpractice insurance and their rate of increase from 1983 to 1985.
- To identify factors contributing to the rise in hospital liability expenses.
Main Methods:
- Examined malpractice coverage costs and their changes over a two-year period (1983-1985).
- Analyzed cost per dollar of coverage and regional variations.
Main Results:
- Increased liability costs were primarily driven by hospitals purchasing greater amounts of coverage.
- The cost per dollar of malpractice coverage remained stable during the study period.
- Malpractice cost disparities across U.S. census regions are diminishing.
Conclusions:
- Hospitals' increased spending on liability insurance, not rising rates, explains cost escalation.
- Despite narrowing regional differences, Medicare's prospective payment system may create inequities in malpractice insurance cost reimbursement.