As hospitals employ a growing number of physicians, a recent report suggests that many facilities are considering whether to offer medical malpractice coverage through in-house self-insurance plans.
A medical malpractice survey conducted by the American Society for Healthcare Risk Management and risk-management firm Aon found that 73% of hospitals report insuring their physicians in-house, while 24% insure them using commercial medical malpractice carriers. The remaining hospitals used some combination of the two insurance forms.
According to the report, the average loss rate for physicians insured by a hospitals' plan in 2010 was $6,100. In comparison, a physician insured by a commercial plan in 2010 had an average loss rate of $15,810. Moreover, administrative simplicity and using the same defense team for the hospital and its physicians resulted in additional savings, the report found.
However, the savings generated by in-house insurance coverage may be offset by the overall increased risk that such hospitals face, Modern Healthcare reports. According to the report, the loss rate for hospital professional liability claims has increased by 5% each year since 2007. Meanwhile, the average cost per claim is expected to reach $171,000 this year, the report showed (Carlson, Modern Healthcare, 10/25 [subscription required]).