October 2018 Newsletter

Elderly Texans among the beneficiaries of liability reform

Liability reforms were a long time coming for the long-term care industry in Texas, where, prior to 2003, half the nursing homes across the state couldn’t find or afford liability insurance.
Highly rated nursing homes were frequently targeted by personal injury attorneys pursuing meritless claims, driving up costs that forced them to scale back their care.
Big changes came following medical liability reform legislation passed in 2003, when the nursing home industry in Texas experienced dramatic improvements in the care they were able to provide their residents – all thanks to savings from liability insurance premiums.
“Texas tort reform saved our organization and the residents that we serve,” said Alan Hale, CEO of Manor Park, a non-profit elderly care facility in west Texas.
Now, Texas has 50 percent fewer cases against nursing homes than the national average – evidence that reforms are making an impact.
Facilities throughout the state, including Manor Park and another non-profit, Morningside Ministries, have credited liability reforms with allowing them to invest resources in recruiting care staff and nurses, training younger people for the various careers in long-term and elderly care, and improving the homes that serve and house Texas seniors.
To read more about how elderly residents in need have benefited from the passage of liability reform, click here.

State liability reforms cited as driving factor in steady liability rates

Annual studies that draw on trends in the liability climate continue to show that premiums have stabilized – and efforts by states to pass reforms is a reason why.
This month, the Medical Liability Monitor released its Annual Rate Survey, and Fitch’s annual report touched on the complexities of the liability insurance underwriting market.
“When looking at Annual Rate Surveys from the last 10 years, the dominant position for more than half of all medical liability insurers has been to hold rates flat, year over year,” stated Medical Liability Monitor’s press release. “The percentage of companies reporting no year-over-year change in rates has been steadily increasing since 2008.”
Liability reform legislation passed in many states over the past 15 years has been a driving factor in keeping rates steady, but there is indication that uncertainty lies in the years ahead.
“While medical professional liability claim frequency remains lower, generally stable and fewer claims make it to trial than in the past, the number of verdicts and settlements in excess of $10 million has been trending upward in recent years,” the press release confirmed.
While Fitch’s report concluded that “falling market premiums are largely a function of changing broader healthcare fundamentals,” including consolidation, the fact that changes to state liability laws have contributed to stable rates continues to warrant a push for comprehensive reforms at the federal level.
Click here to read a full analysis of liability rate trends, and here for an overview of the MLM Annual Rate Survey.

Further funding approved for patient safety efforts

A spending bill signed into law earlier this month includes $2 million earmarked for the Agency for Healthcare Research and Quality (AHRQ), supporting patient safety efforts that improve accuracy in patient diagnoses.
Actively spearheading the effort to reduce diagnostic errors is the MPL Association, a member of the HCLA, which has teamed up with the Society to Improve Diagnosis in Medicine to make inroads on this initiative.
The funding will support grants and explore the process of establishing Centers for Diagnostic Excellence, highlighting the importance of differentiating between an inaccurate diagnosis based on reasonable assumptions and one that is based in negligent care.
To read more about the funding and the way it will be used towards patient safety improvements, click here.

High tort costs deliver little benefit to patients

With total tort costs across the U.S. reaching nearly half a trillion dollars, a new report by the Chamber of Commerce shows almost half of is diverted away from patients.
Released in late October, “Costs and Compensation of the U.S. Tort System” highlights a tort system that has ballooned to 2.3 percent of the nation’s GDP. With tort costs reaching $429 billion in 2016, medical liability litigation was found to make up $19 billion of the total.
“If you break down the cost component, our study shows only 57 cents of every dollar is actually getting to the victims,” said Brian Quigley, senior vice president of strategic communications at the Institute for Legal Reform. “The rest goes to plaintiffs and defense costs, or administrative and transfer costs. All the costs are not going to the people who purportedly the system is there for: the plaintiffs themselves.”
The study made it clear that increased costs did not equate to added value for the patients who seek compensation through legal avenues.
Click here to read a summary of the findings and here for the full report.