Malpractice insurance coverage will cost more next year for Emory Healthcare, as it will for the medical profession in general. But the good news is that the initial projection of a whopping $5.6 million increase has been cut by more than half, according to Emory Healthcare CEO John Fox.

Fox announced in May that increases in the FY2003 malpractice insurance budget—estimated only weeks ago at more than 60 percent—have been whittled to about 30 percent, saving $3 million.

The savings have been achieved in three main ways, according to Shulamith Klein, senior director of the Office of Risk & Insurance Services:

• An assessment of liability losses for the past five years shows that Emory Healthcare should have a more favorable trend with the reduction in primary care centers.

• Several major cases have closed in the past two years for a smaller Emory payout than projected. Hence, a surplus of funds has been identified for FY02 based on a careful review of the balance sheet of Clifton Casualty Insurance Co., Emory Clinic’s primary insurer. This margin will be applied as a premium credit in FY03. These credits may not be available in the future.

• The clinic, on the basis of recent months’ actual loss performance, was able to challenge other assumptions built into the FY03 insurance budget.

Fox emphasized that the new projections are subject to approval by the board of Clifton Casualty, but since a majority of the board is made up of Emory physicians, approval is expected.

For Emory Healthcare as a whole, including Emory Clinic, medical professional and general liability coverage will cost $13.4 million in FY02 and is projected to cost $17.9 million in FY03, Klein said. Clifton Casualty covers the primary limit, and Emory then buys additional coverage from a variety of companies.

Statistics show that about 70 percent of the claims made against Emory are settled with no payment.

—Health Sciences Communications