With the courts resuming normal operations following two years of pandemic-related delays, many hospitals and health systems are seeing their medical malpractice expenses surge.
According to a report from STAT News, the payouts to patients and families harmed by medical errors are straining hospitals’ finances during an already challenging time.
“It’s a big thing,” Ed McGrath, managing director with the VMG Health consultancy, told STAT. “When you’re getting hit on labor and you’re getting hit on supply costs, and then you start getting hit on medical malpractice, that’s a triple whammy.”
Civil cases, which include malpractice, were placed on the back burner when jury trials resumed, with criminal proceedings taking precedence.
Health Systems often work to build reserves for legal costs into their insurance programs. However, a recent report from VMG Health said some are seeing malpractice costs rise to levels they did not anticipate. VMG Health talked to executives from 21 not-for-profit health systems, and more than half said they’re struggling with malpractice costs.
According to STAT, health systems that self-insure for malpractice liability are the ones experiencing the higher costs. But McGrath thinks the effects will extend to all health systems next year, even among those who buy liability insurance.
“I think 2023 will still be a pretty tough year when it comes to this particular topic,” McGrath told STAT.
In their latest financial statements, major health systems, including Baylor Scott & White Health, UPMC, Cleveland Clinic, and others, have all reported larger self-insurance reserves or professional and general liability funds, which include malpractice.
Cleveland Clinic’s insurance expenses grew 66% year-over-year in the quarter that ended Sept. 30. A spokesperson told STAT News the sharp rise in premium cost includes increases to medical malpractice, cybersecurity, property, and auto.
Read more about malpractice lawsuits’ impact at statnews.com.
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