Comparative Impact Analysis of Low-Deductible Insurance Versus In-house Hospital Assumption of Risk and Management on Medical Malpractice Claims

Abstract

Objectives Claims management is critical to ensure the safe and high-quality medical care for which liability insurers and/or hospitals are responsible. The aim of this research is to determine whether increasing hospital malpractice risk exposure, with increasing deductibles, has an impact on malpractice claims and payouts. Methods The study was conducted at a single tertiary hospital, the Fondazione Policlinico Universitario Agostino Gemelli IRCCS, Rome, Italy. Payouts on closed reported and registered claims were analyzed during 4-study periods, which ranged from 1.5 million euro annual aggregate deductibles entirely managed by the insurance company to 5 million euro annual aggregate deductibles entirely managed by the hospital. We retrospectively analyzed 2034 medical malpractice claims submitted between January 1, 2007, and August 31, 2021. Four periods were examined depending on the claims management model adopted, ranging from total outsourcing to the insurer (period A) to an almost total hospital assumption of risk method (period D). Results We found that progressive hospital assumption of risk is associated with a decrease in the incidence of medical malpractice claims (average variation per year: −3.7%; P = 0.0029 if the 2 initial periods and the 2 last periods—characterized by the highest risk retention—are respectively aggregated and compared), an initial decrease in the mean claims cost followed by an increase that is still lower than the national increase (−5.4% on average), and an increase in the total claims cost (when compared with the period where the insurer solely managed claims). We also found that the rate of increase in payouts was less than the national average. Conclusions The assumption of more malpractice risk by the hospital was associated with the adoption of numerous patient safety and risk management initiatives. The decrease in claims incidence could be due to the implementation of patient safety policies, while the cost increase could be attributed to inflation and rising costs of healthcare services and claims. Notably, only the hospital assumption of risk model with a high-deductible insurance coverage is sustainable for the studied hospital, while also being profitable for the insurer. In conclusion, as hospitals progressively assumed more risk and management responsibility of malpractice claims, there was a progressive decrease in the total number of claims, and a less rapid rise in claim payouts as compared with the national average. Even a small assumption of risk appeared to elicit meaningful changes in claim filings and payouts.