Eight states lead U.S. in senior dollars for court
July 1, 2002 3 minutes read
Eight states lead U.S. in senior dollars for court
A new independent study shows that much of the increased government funding for senior care between 1995 and 2001 has actually gone for lawyers and other litigation expenses, not toward improved patient care for seniors.
The actuarial study, conducted by Chicago-based AON Risk Consultants Inc., examines the skyrocketing cost of general liability and professional liability claims against long-term care providers who rely on federal dollars to help cover patient care costs for three-quarters of the country’s elderly and disabled residing in nursing homes.
The study reveals that the problem is worse in Florida, Texas, Arkansas, Alabama, Mississippi, Georgia, California, and West Virginia. Among the independent study’s objectives are to identify the national trends in the cost of general liability and professional liability (GL/PL) claims for long-term care and identify state-specific trends and their correlation to future national trends. These are some key national findings:
- The average long-term care GL/PL cost per skilled nursing bed has increased at an annual rate of 24% from $240 in 1990 to $2,360 in 2001. National costs now are 10 times higher than they were in the early 1990s.
- GL/PL costs have absorbed 20% ($3.78) of the $18.47 increase in the countrywide average Medicaid reimbursement rate from 1995 to 2000.
- Almost half of the total amount of claim costs paid for GL/PL claims in the long-term care industry is directly going to attorneys.
Charles H. Roadman II, MD, president and CEO of the Washington, DC-based American Health Care Association (AHCA), says the results suggest that tax money is not going for the health care objectives that most people expect. The AHCA is a nonprofit federation of affiliated state health organizations, together representing nearly 12,000 nonprofit and for-profit assisted living, nursing facility, developmentally disabled, and subacute-care providers that care for more than 1.5 million elderly and disabled individuals nationally.
"In a stark and statistically undeniable manner, many in the trial-lawyer community are targeting dollars meant for seniors’ long-term care as a reliable and generous source of income," Roadman says. "Taxpayers and our federal lawmakers need to be aware that critical health care dollars are being diverted out of patient care for the nation’s poorest and most vulnerable seniors. This analysis sheds light on a problem that should be troubling to every taxpayer, federal official, and senior citizen who relies on Medicaid."
The cost per bed
In California, for instance, the average loss cost per bed has increased from $970 in 1995 to $2,320 in 2001. As the average Medicaid per-diem reimbursement has increased 18% over the past six years — from $79.71 in 1995 to $94.28 in 2000 — the GL/PL loss cost has increased almost 100%. As a result, although the Medicaid reimbursement rate has increased $14.57 during this period, lawsuit and liability insurance costs have absorbed 17% ($2.41) of that growth.
"At a time when improved quality of care’ is the rallying cry for the administration, the Congress, and the public at large, taxpayers should expect to see dollars earmarked for senior care actually used for this important purpose — not to pay for skyrocketing lawsuit costs," Roadman says.
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