Risk Retention and Management Implications of Medical Malpractice in the Italian Health Service

Abstract

This work provides an economic exploration of the multifaceted world of medical malpractice risk. Third party liability insurance plays a central role in protecting healthcare providers and public care institutions from the financial consequences of medical malpractice claims, although in recent years, the industry landscape has been characterised by periods of distress for this type of protection, with rising litigations and reimbursement costs, resulting in a peculiarly complex market. For the Italian context, the study focuses on the financial repercussions for healthcare institutions of the growing trend towards risk retention practises, legally empowered by the introduction of Law No. 24/2017. The analysis employs Generalised Linear Models for the regressive approach to incorporate the structural and organisational characteristics of hospitals and uses quantitative simulations to explore different scenarios at a regional aggregate level. Due to the limited existing literature and data on the topic, this research aims to provide new methods for effectively understanding and managing this type of risk, thereby supporting decision-making processes in the healthcare sector.

Keywords

• medical malpractice
• risk retention
• risk management
• generalised linear models
• insurance market