“That was something of a surprise,” said Greg Larcher, director and actuary of Aon Risk Consultants and author of the analysis, referring to the 17 percent jump, noting that the 3 percent rise in payments to claimants represents a leveling that's roughly in line with inflation.

“Based on study findings, the impact of past state-level legislative reforms has largely been realized,” he said. “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.”

Reforms included not only caps on pain and suffering damages, but also measures aimed at so-called “jurisdiction shopping” in which claimants go to the county seen as most favorable toward large settlements.

Some states have farther to go than others in terms of frequency improvements. For example, in Florida, the loss-per-bed rate for hospitals fell 10 percent last year to $6,200 from a record $6,900 per bed in 2004, according to Aon. But that compares to the national average of $4,300 last year. “Florida is regressing to the mean, but it has got a long way to go,” Mr. Larcher said.

On a national level, emphasis will now be on patient safety and error elimination. Such initiatives being implemented today may be critical for sustaining a favorable frequency trend into the future, he said.

This year, the study for the first time attempted to look at the relationship between improved patient care processes and liability claims, he said, noting that Aon revealed a statistically significant relationship between mortality and claims frequency in certain segments of the database. For example, Texas hospitals with 200 mortalities in 2004 experienced six indemnity claims, while those with 150 deaths had four such claims.

“We tried to establish the thought process that if your quality-of-care initiatives reduce the number of deaths and bad outcomes, then you will also reduce the number of liability claims,” he said.

So while the benefits of tort reform start to level off, the study purports that future improvements will result from quality-of-care initiatives. “That is just our gut,” Mr. Larcher said. “Now, we must get some numbers around that [to] quantify the improvement.”

If frequency continues to improve without any new tort reform measures, Mr. Larcher hopes to be able to say “these decreases have been in lockstep with quality-of-care initiatives.”

While patient safety initiatives may vary greatly from state to state, there has been some effort to standardize them to better measure the results. In December 2004, the Institute for Healthcare Improvement initiated the 100,000 Lives Campaign in which participating hospitals pledged to implement six quality improvement changes with the goal of preventing 100,000 avoidable deaths.

“The 100,000 Lives campaign is unique in that the measurement of success–avoidable deaths–is an integral part of the campaign,” Mr. Larcher said. Each hospital saved an average of 26 lives annually, which Mr. Larcher calculated as an 11 percent annual improvement in the mortality rate.

The 100,000 Lives Campaign indicates that hospital deaths are being reduced in hospitals that implement the six quality improvement changes, and the data indicates that hospitals with fewer deaths tend to have fewer hospital professional liability indemnity claims.

“We believe this provides more than just anecdotal evidence [about] the ability of patient safety initiatives to affect hospital professional liability claims,” Mr. Larcher said.

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