Study ranks Kentucky high in long-term care liability

The long-term care industry is no stranger to medical malpractice liabilities. These lawsuits are a major contributor to the increasing costs of long-term care, and according to a recent study by Aon Risk Services, Kentucky is among the top four states with the highest long-term care liability costs.

The study examines four key components of long-term care liability: loss rate trends, frequency, severity and Medicaid reimbursement rates (as related to liability costs). The nationwide comparison shows Kentucky’s increasing rates to be a combination of two primary issues:

• Kentucky is paying higher claim amounts than most states (severity) – Kentucky has no legislated cap on damage claims, meaning there is no limit to the amount of money an individual can seek for pain and suffering damages (non-economic claims). Tort reform legislation that includes a cap on these types of claims would be one way to control escalating costs. The study finds, however, that tort limits combined with constitutional protections to be the most effective method implemented by any state.
• Kentucky has a higher frequency of suits filed than other states (frequency) – Nearly one out of every 100 beds occupied by long-term care patients results in a liability claim. That number is projected to increase by the end of 2011, making Kentucky the second highest of the profiled states.

Nationally, long-term care liability costs are increasing by 3% annually. By 2012, costs are projected to reach $1,470 per recipient. Kentucky more than doubled that number in 2010 with a staggering cost of $3,230 per individual.

 Bryan Sunderland, vice president of public affairs at the Kentucky Chamber, says the business community should take notice.

“The costs associated with medical liability can be a tremendous drain on the economy. These lawsuits ultimately increase insurance premiums that trickle down to create higher costs for businesses, individuals and an already frail Medicaid system,” said Sunderland. “This isn’t an issue any of us can afford to ignore.”

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