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Ohio Medical Malpractice Closed Claims Report Released

As part of tort reform legislation sponsored by the Ohio State Medical Association, The Ohio Department of Insurance requires all underwriters to release statistics on paid indemnity, as well as a variety of other statistics related to malpractice liability. This data is compiled to produce the Ohio Medical Professional Liability Closed Claim Report. The most recent report, released on January 29th, 2009, covers claims paid in the 2007 calendar year. The full text of the report is available for free at the Ohio Department of Insurance.  Though Ohio has experienced trends mildly favorable to providers in recent years, some of the statistics contained in the report are noteworthy, and serve as a reminder of our obligations to ensure quality patient care, and take proactive measures to protect against medical malpractice allegations.  We will have a series of posts focusing on trends from the Ohio Medical Malpractice Closed Claim Report, the first of which focuses on high level findings.  Subsequent posts will examine some of the details and specialty-specific data.

Overall Trends

1. Most Cases Result In No Payment. The overwhelming majority of medical malpractice cases in Ohio continue to be resolved without any indemnity payment being made to the claimant. From the report:
   

   A large majority of medical professional liability claims resulted in no payment to a claimant. Nearly 80% of the claims or 2,705, had no indemnity payments, while a little over 20% of the claims or 746, closed with an indemnity payment. The total amount paid to claimants was $235,463,393, an average of $315,635 per claim in which an indemnity payment was made.

2. Total Claims Are Down Significantly.  Though the percent of claims with indemnity has remained unchanged in recent years (roughly 4 of 5 claims have been dismissed in each of the past three years), the total number of claims has decreased significantly in the three years since reports have been published.  Data from 2007 shows 3,451 claims, compared to 4,004 claims in 2006 and 5,051 claims in 2005.  This 31% decrease relative to 2005 data is heartening, and suggests that Ohio’s tort reform efforts have (and are continuing) to produce some of the intended effects.
3. Average Indemnity Is Up. Though volume has decreased, other indicators have trended sharply in the other direction. Average indemnity, which was $269,374 in 2005, is now $315,635 in the latest report–a 17% increase since the first data point. Overall, these data suggest that only the more serious malpractice allegations are being pursued, but that providers and insurance companies are having to defend themselves more aggressively in instances where patients choose to take action.
4. ALAE Is On The Rise. Even when an indemnity payment is not made, there are significant investigation and legal costs related to the claim. In Ohio, the total ALAE allocation for 2007 was $103,033,668, or 43% as much as the sum of all indemnity payouts made during that same year. ALAE averaged $35,603, up over 45% since the initial 2005 data point.
5. Age of Claim Matters. There is a significant correlation between the age of the claim and the size of the indemnity payout, if paid.  Again, quoting the report:
   

   The amount paid to claimants increased with the age of the claim. Of the claims that closed with an indemnity payment, 186 closed within one year of being reported and had average paid indemnity of $67,146. That figure rose to $297,935 for 202 claims closing in their second year. Nine claims closed seven or more years after being reported, having average paid indemnity of $2,785,326.

   In speaking with the medical director of one prominent medical malpractice company, he offers that older cases tend to be more complex and difficult to resolve, leading to higher average indemnity payments.

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