Variations in hospital malpractice costs, 1983-1985.

The rapid increase in the costs of hospital liability in recent years has focused attention on the present and future ability of hospitals to offer complex, high-risk procedures. In this study of the costs of malpractice coverage and their rates of increase between 1983 and 1985, we found that the rapid increases in the costs of liability insurance are largely accounted for by the fact that hospitals are purchasing more coverage. Their costs per dollar coverage remained constant over the two-year period. Although malpractice cost differences are narrowing among the nine U.S. census regions, our analyses suggest that there will be significant inequities in what Medicare allows in its prospective payment formula for malpractice insurance costs.