The True Cost of Unmet Expectations in Healthcare with a Focus on Senior Living Claims

In more than 35 years of defending senior living providers, one truth has been consistently reinforced: most claims don’t start with bad care — they start with unmet expectations.

Families often arrive with emotions that are complex and unspoken — grief, guilt, confusion, fear. Residents bring their own needs, histories, and assumptions about what “care” will look like. When there is no clear communication or shared understanding of roles, responsibilities, and realistic outcomes, risk festers.

As trial attorneys and claims managers, our firm has sat across from hundreds of family members in depositions, mediations, and trials. What I’ve heard — and what industry benchmark reports back up — is that the failure to align expectations at the outset is one of the most potent claim drivers in the entire senior living ecosystem.

$50 Million Here, $45 Million There: Litigation’s Growing Price Tag

We’ve all read the headlines:

• $50M verdict for bedsores, dehydration, and falsified records.
• $45M for a brain injury resulting from staff assault.
• $42.5M for unauthorized sedation causing wrongful death.
• $38.6M in the largest-ever EADACPA settlement.

These extraordinary cases are deeply painful, not just in human terms but in financial impact. But even beyond these large jury awards, the industry is facing another slower, less visible threat: the rising cost of defending even modest claims.

Key Cost Drivers Backed by Data

In CNA’s latest data analysis of aging services claims:

• “Unrealistic expectations, combined with inadequate communication and unmet needs, often lead to allegations of negligence or abuse.”
• Claims escalated in severity even when clinical care was within standards, largely due to what the report calls “emotional drivers.”
• Communication breakdowns with family members—particularly during moments of crisis—triggered litigation even in situations where no regulatory violations were found.

These findings confirm what defense attorneys experience every day in discovery and depositions: many claims arise not from malpractice, but from a breakdown in trust and shared understanding.
Marsh-McLennan/Oliver Wyman’s recent national benchmark analysis paints a clear picture of rising litigation costs:

• Median claim costs:
  • Assisted Living: $200,000
  • Skilled Nursing: $430,000

Defense costs account for nearly 30% of total incurred expenses, often exceeding $130,000 to $150,000 per claim.

Severity continues to rise, driven by social inflation, documentation gaps, family involvement, and inconsistent expectations around staffing and care obligations.

This report validates how non-clinical issues are amplifying exposure. Cases are increasingly driven by perceptions and narratives, not strictly medical facts.

Milliman’s in-depth actuarial study also confirms a troubling trend:

• Claims involving elopements, miscommunication, or family disputes routinely generate disproportionately high payouts, despite minimal or no clinical harm.
• Communication failures at the time of incident (e.g., delay in notification, lack of empathy) increase plaintiff engagement, prolong litigation, and drive settlement values.

Liberty Mutual’s findings on claim closure and severity are especially instructive:

• Over 62% of assisted living and 72% of skilled nursing claims close with payment.
• Average indemnity:
  • Assisted Living: $166,398
  • Skilled Nursing: $245,559
• Claims that remain open longer—often due to poor documentation or contested family expectations—tend to carry much higher legal costs.

Liberty also links expectation misalignment and documentation gaps as central contributors to prolonged and expensive litigation.

WTW’s 2023 benchmarking report offers more granular data on defense costs and family-driven claims:

• Defense expenses now comprise up to 30% of total claim costs in certain high-severity segments.
• Even when the provider is found not liable, the cost to defend emotionally charged claims remains high, especially when communication issues are at play.
• The report ties these trends directly to family misunderstandings, unrealistic expectations, and prolonged litigation timelines due to emotional or reputational stakes.

The True Cost: A Broader View

Beyond the numbers, these studies reflect the deeper reality facing providers and insurers:

• Litigation costs are rising, not solely due to the nature of the injuries involved, but due to the context in which those injuries occur.
• The legal expense to defend can rival or exceed indemnity payments, even in claims without clear evidence of wrongdoing.
• Unclear roles, lack of empathy at time of incident, and failure to acknowledge family concerns continue to drive lawsuits that might otherwise be avoided.

As a defense attorney who has deposed hundreds of families and reviewed thousands of care records, I can say with certainty: the problem often isn’t care—it’s perception. And in court, perception shapes everything.

The Quiet Cost: Defense Expenses and Insurance Pressure

Let’s talk about the defense side — the part I know best. These cases are expensive to defend. They require detailed record review, depositions, expert reports, and often protracted mediation or trial preparation.

In the CNA and the Marsh McClennan/Oliver Wyman reports, legal defense costs were consistently identified as a major component of total claim spend, sometimes surpassing indemnity payouts, especially in cases that settle after significant discovery. These expenses contribute to:

• Increased insurance premiums
• Coverage limitations
• Underwriting reluctance in certain markets

This isn’t a critique of defense counsel — these cases are complex and deeply human. But it is a call for all stakeholders to understand that the costs aren’t just clinical or financial — they’re cultural and systemic.

Toward a Blueprint for Proactive Legal and Risk Strategy

As we think about building better litigation strategies and, ideally, reducing claim frequency and severity, it’s time we take unmet expectations seriously as a root cause.

Our firm is working on a comprehensive blueprint for Communication and Resolution Programs (CRPs) that provide a structured framework to:

Engage families early:

• Clarify roles and care responsibilities
• Document expectations at the time of admission
• Respond transparently and effectively when something goes wrong
• Improving quality of care
• Mitigating the risk of the next harm

This is not about avoiding liability — it’s about managing relationships before they fracture.

The Bottom Line

When we fail to understand what families expect, and when we don’t explain what a provider can and cannot do, we leave a void. And into that void comes blame, confusion, mistrust — and eventually, litigation.

If you’re a provider, insurer, or in-house counsel navigating this landscape, I invite you to get in touch. Let’s talk about how we can bridge the gap between clinical care and legal expectations — before it becomes a lawsuit.

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