Professional Liability Actuarial Analysis – Senior Living

11/18/2019 Written by: AP Senior Living Risk Solutions

A recent liability actuarial report forecasts the liability loss rate for long-term care facilities will continue to increase by 5% with claim frequency driving the increase at an expected 2% growth rate. The conclusion this year is the annual cost to defend, settle or litigate claims will decrease – projected 2020 costs are $2,300 per occupied bed (down from $2,410 per bed). Additionally, findings identified that claim severity, or average size of a claim, will increase by 3% annually.  

With this knowledge, what can senior living management do to limit their claims? Here are a few options:

  • Implement an adverse event management process which focuses on those resident events that correlate to survey deficiencies (especially those with a Scope and Severity rating of G or higher) as well as a high potential for a professional liability claim or lawsuit. Evidence in this report indicates claim costs are higher the longer claims stay open. Implementing a Quick Response process engages a clinical risk manager along with a claims manager to assist community staff in identifying appropriate interventions as well as deploying insurance carrier resources to develop a claim closure strategy within days of the event. By quickly managing these events, communities are able to mitigate financial risk associated with surveys and liability insurance.
  • Educate family members on realistic expectations relative to the care and services provided in a senior living setting. Family members need to be reassured they are making the best decision for their loved one as well as the realities of nursing home life. If unrealistic expectations are identified, this allows for a conversation with family and the caregiving team – including the physician to educate diagnosis progression as well as the care plan for services.
  • Implement Arbitration Agreements. Claims with arbitration agreements settle three months faster than those without. To learn more about implementing an arbitration agreement, we invite you to watch one of our recently recorded webinars here.

With rising costs, senior living communities should be aware of ways to improve the efficiency, safety and success of the organization. The right preparation can help senior living communities reduce costs stemming from claims. If you’re looking for ways to minimize risks and reduce costs, contact an AssuredPartners Senior Living team member.

Source: Aon Global Risk Consulting - 2019 Aon Professional and General Liability Benchmark for Long Term Care Providers Actuarial Analysis

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