Long-term care continues to be one of the fastest growing segments of health care litigation with liability costs rising year after year. To evaluate liability risk, aging services providers need to be aware of the current legal landscape in long-term care, what it is expected to look like in the future, and where they should focus their efforts within their own organization to reduce risk exposure.

Let’s Look at Recent Events

Statistics on long-term care lawsuits are hard to come by, given the majority of these cases – more than 95%, according to the Nursing Home Abuse Center – are settled out of court. However, data presented at the 2018 ACI Annual Forum on Long Term Care Litigation and Risk Management Strategies can help give us the lay of the land.

We know that in 2017 there were 22 jury verdicts nationwide for nursing home and assisted living cases with $4,867,945 being average amount awarded to plaintiffs. The largest jury verdict of the year totaled $28,550,000, with $25,000,000 in punitive damages awarded. Although typically rare in injury cases, punitive damages were awarded in four (33%) of the cases with jury verdicts. This will be an interesting trend to watch and is certainly a concern for long-term care providers.

Where arbitration was involved, the payout numbers looked quite a bit better. The average award to plaintiffs was $461,750, based on a total of six arbitration awards. A telling figure: the total number of arbitration awards combined with punitive damages was zero. Clearly, keeping a case out of court has its advantages.

According to the 2018 Aon General and Professional Liability Benchmark for Long Term Care Providers, the portion of claims with arbitration agreements in places has increased over time. These claims have a 3% lower total cost and tend to settle two and a half months sooner than those resolved without arbitration. Of claims that closed between 2015 and 2017, about 63% had an arbitration agreement in place.

Projected Liability Costs for Long-Term Care

It comes as no surprise that the frequency and severity of aging services claims are projected to keep climbing. The Aon report warns long-term care providers that they should expect to see a 3% uptick in total claims frequency coupled with another 3% climb in the average size of each claim, with an estimated average loss rate of $2,410 per bed.

Consequently, liability insurance rates for the senior living and long-term care industries could increase from 5% to 30% or more in 2019, according to Senior Housing News. States likely to see the greatest increases are California, Illinois and Florida.

Areas of Concern

Falls are consistently identified as the leading claim category by CNA¹ and will continue to be an issue at facilities who serve an aging and frail population. Last year, falls accounted for 40.5% of closed claims with nearly two-thirds of these claims asserting failure to monitor. In about half of fall-related claims, death was the outcome. Pressure injuries are cited by CNA as the second most serious challenge, comprising nearly 23% of closed claims in 2018. Death is the most common outcome of pressure injury (62% of closed claims) and the costliest. The average total paid for pressure injury allegations with death as the outcome was $246,386. Other common risk-prone issues include nutrition and hydration, medication errors, wandering and elopement.

Long-term care facilities are already dealing with more complex situations related to the health of their patients and residents. The reality is that 68% of seniors have at least two chronic health conditions, according to the National Council on Aging.³ Dementia is a common ailment among seniors that increases the risk of falls and elopement. In the CNA report cited above, it was a factor in more than half of fall-related claims, and the condition will only become more prevalent in the future.

According to the World Health Organization, the likelihood of experiencing the onset of Alzheimer’s Disease doubles every five years after age 60, when it is present in about 2% of patients. By the time someone reaches age 85, they face a one in three chance of having Alzheimer’s, and some studies place that figure as high as 50%. Currently, people age 85 or older constitute the fastest growing segment of the population.²

Higher acuity in older patients and residents is a result of people living longer and moving beyond their healthy retirement years. This demographic is on track to inundate nursing homes and assisted living facilities in the next few decades as the Baby Boomer generation, defined as those born during about a 15-year period following World War II, reaches old age. This population boom is often referred to as the “silver tsunami.”

The U.S. Census Bureau estimates that by 2030, 21% of people living in the U.S. will be older than 65. That’s up from 15% today and represents an additional 40 million people. By 2035, 78 million Americans will be 65 and older.

Demand for senior care will skyrocket along with the aging population, but it’s uncertain there will be a labor market large enough to look after the people who need it. Paul Osterman, author of “Who Will Care for Us: Long-term Care and the Long-Term Workforce,” predicts that in 2030 there will be a national shortage of 151,000 paid direct care workers and 3.8 million unpaid family caregivers. Facilities need to start thinking now about how they will be able to attract and retain qualified staff so they can meet the requirements for providing proper standards of care.

One last note on boomers and their effect on senior living: as they start needing additional medical care, they will look for housing alternatives that allow them more freedom than a traditional nursing home or assisted living facility. Continuing Care Retirement Communities (CCRCs) are becoming more popular because they offer seniors more choices for how and where they want to live, with access to the types of care they need. However, the fact that not all states have regulations governing these unique housing options, and less-defined regulations in those that do, makes them more vulnerable to litigation.

Moving Forward

Aging services providers will continue to face claims and lawsuits, possibly at an accelerated pace due to the silver tsunami and an impending long-term care worker shortage. However, knowing where the biggest challenges lie can help you take proactive steps to manage your risk. For most facilities, this will entail:

• Having an adequate staff that is equipped to handle patients or residents with higher acuity
• Cultivating work satisfaction to prevent turnover and retain employees
• Implementing a fall prevention and wound management program
• Focusing on memory care to prevent injuries caused or compounded by dementia
• Keeping communication open with patient and resident family members and set realistic expectations so they fully understand the realities of their loved one’s situation
• Maintaining consistent and complete documentation to accurately illustrate the level of care provided

About Excelas:

Excelas provides efficient and affordable medical record organization and analysis to organizations nationwide. We can handle any project, from a single case to a class action lawsuit. Our health information specialists have reviewed millions of pages of records, helping clients identify and address issues that could raise questions about a patient or resident’s care. Contact us to find out how we can help your organization.

¹ CNA Aging Services 2018 Claim Report; Valuing Employees, Minimizing Risk
² National Institute on Aging: https://www.nia.nih.gov/living-long-well-21st-century-strategic-directions-research-aging/introduction
³ https://www.ncoa.org/blog/10-common-chronic-diseases-prevention-tips/