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18 Hartford Business Journal • October 28, 2019 • www.HartfordBusiness.com By Matt Pilon mpilon@hartfordbusiness.com M edical-malpractice insurance payouts on behalf of Con- necticut hospitals, physicians and other healthcare providers in 2018 hit their highest total since the state's been tracking the data. In all, malpractice insurers, in- cluding self-insurance entities like "captives," paid out $262.6 million to patients alleging errors, misdiag- noses and other medical missteps. That was a 33 percent, or $65.7 mil- lion, increase over 2017, and the total bested a prior record of $229.8 million in malpractice payouts set back in 2006, the year after the state began tracking and reporting the data. The average payment also hit a record level in 2018 — $935,000 — after staying below $700,000 for the prior five years, according to the Connecticut Insurance Depart- ment, whose data includes legal settlements and judgments. Some hospitals and doctors worry that the uptick could signal coming increases in their malprac- tice premiums. That would fit with a broader trend, as premiums have been rising across the country in recent years, after more than a decade of stability, according to the Medical Liability Monitor, an Illinois-based news ser- vice that tracks malpractice issues. Rising malpractice claims and li- ability insurance costs are signifi- cant because they increase health- care costs for everyone, including individuals and employers. Dr. Mary Cooper, vice president and chief quality officer at the Con- necticut Hospital Association, said it's tough to draw conclusions from one year's worth of Connecticut malpractice data. "I don't know if this is a blip or if this is a trend," Cooper said, not- ing that the number of malpractice claims that have resulted in pay- ments has been trending downward in recent years. Ken Ferrucci, senior vice president of government affairs for the Con- necticut State Medical Society, which represents more than 7,000 doctors in the state, was less equivocal. "When you see the average pay- ment go up by more than $300,000 that's why we're probably going to start seeing increases in liability rates," Ferrucci said. Medical-malpractice insurers no- tified state insurance regulators of six rate increases in 2018, which is higher than normal in recent years. The Medical Liability Monitor's latest annual survey released earlier this month found that more than 25 percent of U.S. insurers increased rates for 2019, the highest percent- age since 2006. What's driving the increase? While malpractice-insurance prices have spiked during several crisis cycles between the 1970s and early 2000s, the last decade or so has been pretty stable for hospitals, doctors and other providers in Con- necticut and across the country. The Medical Liability Monitor survey identifies several culprits causing upward pressure on med- mal premiums: A higher frequency of high-severity, big-dollar claims and "a record number of large ver- dicts in excess of $10 million and $25 million." In Connecticut, it's difficult to tell which hospitals or providers were responsible for the 2018 increase in malpractice-insurance payouts. The Insurance Department, which reports annually on closed malpractice claims processed by insurers licensed to write business in the state, doesn't disclose specific judgements or payouts by provider. However, the report does make it clear that hospitals bear the largest malpractice burden, with insurers making $576 million in payments on their behalf between 2014 and 2018, more than half of the $1 bil- lion in total payments for all care providers during that period. Ultimately, those costs increase the price of health care. A 2010 Harvard School of Public Health study pegged the national cost of medical malpractice — in- cluding attorney fees and providing potentially unneeded "defensive- medicine" procedures to avoid lawsuits — at nearly $56 billion a year, or 2.4 percent of overall U.S. healthcare spending. That's a lot of money, but less than certain other health cost drivers, such as prescription drugs, which made up 17 percent of healthcare expenditures in 2016. Impact of uncertainty, stress Wethersfield ophthalmologist Dr. David Emmel has been a solo practitioner in Connecticut for three decades. During the last 10 years, his mal- practice premiums have been stable, which experts attribute to a com- Costly Mistakes Spike in medical-malpractice payouts worries CT doctors, hospitals Medical-malpractice lawsuit payouts in CT Year Total payments 2009 $168.8M 2010 $166.1M 2011 $139.1M 2012 $161.4M 2013 $154.8M 2014 $158.5M 2015 $212.9M 2016 $181.8M 2017 $196.9M 2018 $262.6M Source: CT Insurance Department Wethersfield ophthalmologist Dr. David Emmel has never faced a medical- malpractice lawsuit, but his malpractice insurance rates are increasing, mirroring a national trend. HBJ PHOTO | MATT PILON