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Declining margins, changing financial models, and new regulatory hurdles have created pressures that are pushing healthcare entities to merge.
The number of hospital mergers and acquisitions last year reached its highest point in more than a decade, according to a report from Kaufman Hall.
A total of 115 transactions took place in 2017, the most since Kaufman Hall began monitoring hospital mergers in 2000. Many of the deals last year included sellers with net revenues exceeding $1 billion.
The shifting landscape is also affecting management liability risk.
The cost of litigation is rising. The average management claim payout has increased from $2.2 million in 2008 to $6.5 million in 2016, according to data from Advisen.
In 2016, the industry saw two management liability settlements exceed $100 million, according to reports.
The multi-million dollar settlements and rising average settlement costs underscore the importance of management liability insurance.
Without insurance, healthcare entities may run into expensive lawsuits and complex settlements stemming from claims.
