However, the average amount paid to indemnify claimants is increasing at a rate of only 3 percent, while amounts paid to defend against liability claims are growing at 17 percent as hospitals invest in claims management, Aon said.

Greg Larcher, director and actuary of Aon Risk Consultants and author of the analysis, said, "The improved frequency rate that first emerged in the 2005 study appears to be sustained through 2006."

Based on study findings, the impact of past state-level legislative reforms has largely been realized. "We do not expect significant decreases in claim frequency or severity resulting from tort reform in the future unless other states pass legislation that withstands challenges," said Mr. Larcher.

Patient safety initiatives being implemented today may be critical for sustaining a favorable frequency trend into the future. Mr. Larcher added.

This year's study found that a statistically significant relationship exists between numbers of hospital deaths and claim frequency in certain segments of the database.

For example, after adjusting for patient volume and acuity, Texas hospitals with 200 mortalities in 2004 experienced six indemnity claims, while hospitals with 150 mortalities experienced four indemnity claims. This finding gives an interesting perspective on how changes in quality might affect claim counts, the report suggested.

"While it is logical to believe that organizations that reduce preventable harm to their patients will also reduce professional liability claim counts and costs, our study takes a first step at proving this true with data," Mr. Larcher said.

In the long term, said Mr. Larcher, "the industry would benefit from a more comprehensive measure of quality, beyond mortality, that measures the success of patient safety improvements and their impact on liability costs."