In December, in what’s known as the “Take Care of Maya” case, a Florida jury returned a record $261 million verdict against Johns Hopkins All Children’s Hospital, St. Petersburg, Florida, for its treatment of a young patient and her family after an emergency room visit.
A month earlier, in New York, a jury ordered Westchester Medical Center Health Network to pay $120 million to a patient and his family following delayed stroke care that resulted in brain damage.
Mega malpractice awards like these are rising against physicians and hospitals around the country, according to new data from TransRe, an international reinsurance company that tracks large verdicts.
“2023 blew away every record previously set among high medical malpractice verdicts,” said Richard Henderson, senior vice president for TransRe. “If we look at the 50 largest verdicts in 2023 and average them out, we have a higher monetary amount than any other year.”
In 2023, there were 57 medical malpractice verdicts of $10 million or more in the United States, the data showed. Slightly more than half of those reached $25 million or more.
From 2012 to 2022, verdicts of $10 million or more ranged from 34 in 2013 to 52 in 2022, TransRe research found.
While New York, Illinois, and Florida typically saw the highest dollar verdicts in previous years, so-called “nuclear” verdicts now occur in states like Utah and Georgia where they once were uncommon, said Robert E. White Jr, president of TDC Group and The Doctors Company, a national medical liability insurer for physicians.
A rollback of tort reforms across the country is one contributor, he said. For example, Georgia’s cap on noneconomic damages is among those that have been ruled unconstitutional by courts. Utah’s cap on noneconomic damages still stands, but the limit was deemed unconstitutional in wrongful death cases. In 2019, a portion of Utah’s pre-litigation panel process was also struck down by the state’s Supreme Court.
“We used to be able to predict where these high verdicts would occur,” White said. “We can’t predict it anymore.”
Research shows a majority of malpractice cases are dropped or settled before trial, and claims that go before juries usually end in doctors’ favor. Plaintiffs’ attorneys cite large jury verdicts in similar cases to induce settlements and higher payouts, White said.
And while mega verdicts rarely stick, they can have lasting effects on future claims. The awards lead to larger settlement demands from plaintiffs and drive up the cost to resolve claims, according to Henderson and White.
“Verdicts are the yardstick by which all settlements are measured,” White said. “That’s where the damage is done.” The prospect of a mega verdict can make insurers leery of fighting some malpractice cases and motivate them to offer bigger settlements to stay out of the courtroom, he added.
Why Are Juries Awarding Higher Verdicts?
There’s no single reason for the rise in nuclear verdicts, Henderson said.
One theory is that plaintiffs’ attorneys held back on resolving high-dollar cases during the COVID pandemic and let loose with high-demand claims when courts returned to normal, he said.
Another theory is that people emerged from the pandemic angrier.
“Whether it was political dynamics, masking [mandates], or differences in opinions, people came out of it angry, and generally speaking, you don’t want an angry jury,” Henderson said. “For a while, there was the halo effect, where health professionals were seen as heroes. That went away, and all of a sudden [they] became ‘the bad guys’.”
“People are angry at the healthcare system, and this anger manifests itself in [liability] suits,” added Bill Burns, vice president of research for the Medical Professional Liability Association, an industry group for medical liability insurers.
Hospital and medical group consolidation also reduces the personal connection juries may have with healthcare providers, Burns said.
“Healthcare has become a big business, and the corporatization of medicine now puts companies on the stand and not your local community hospital or your family doctor that you have known since birth,” he said.
Plaintiffs’ attorneys also deploy tactics that can prompt higher verdicts, White said. They may tell a jury that the provider or hospital is a threat to the community and that awarding a large verdict will deter others in the healthcare community from repeating the same actions.
Juries may then want to punish the defendant in addition to assessing damages for economic harm or pain and suffering, White said.
“I am concerned that jurors are trying to right social wrongs rather than judging cases on the facts presented to them,” added Mike Stinson, vice president for policy and legal affairs for the Medical Professional Liability Association.
Third-party litigation financing also can lead to mega verdicts. That’s an emerging practice in which companies unrelated to a lawsuit provide capital to plaintiffs in return for a portion of any financial award. The firms essentially “invest” in the litigation.
“What this does is provide an additional financial backdrop for plaintiffs,” Henderson said. “It allows them to dig in harder on cases. They can hold out for higher numbers, and if nothing else, it can prolong litigation.”
Do High Awards Actually Stick?
Multimillion-dollar verdicts may grab headlines, but do plaintiffs actually receive them?
Rarely, said TransRe, which tracks the final outcomes of verdicts. In many cases, large verdicts are reduced on appeal.
In the Maya case, which involved child protection authorities, a judge later lowered the damages against Johns Hopkins All Children’s Hospital by $47.5 million.
A federal judge in October, for example, rejected a record $110 million medical malpractice award in Minnesota, reducing it to $10 million. The district judge ruled the award was “shockingly excessive” and that the plaintiff should either accept the $10 million award or retry the case.
After a verdict is awarded, the defendant typically challenges the award, and the case goes through the appellate pipeline, Henderson explained. A judge may reduce some elements of the verdict, he said, but more often, the plaintiff and defendant agree on a compromised figure.
Seattle medical liability defense attorney Jennifer Crisera has experienced this firsthand. She recalled a recent case where a plaintiff’s attorney demanded what she describes as an unreasonable amount to settle a claim. Crisera did not want to give exact numbers but said the plaintiff made an 8-figure demand and the defense offered a low 7-figure range.
“My impression was that plaintiff’s counsel believed that they could get a nuclear verdict from the jury, so they kept their settlement demand artificially high,” she said. “The division between the numbers was way too high. Ultimately, we had to let a jury decide the value.”
The plaintiff won the case, and the verdict was much less than the settlement demand, she said. Even so, the defense incurred trial costs, and the health provider was forced to endure the emotional stress of a trial that could have been avoided, Crisera said.
Higher medical malpractice premiums are another consequence of massive awards.
Premium rates are associated with how much insurers pay on average for cases and how frequently they are making payouts, White said.
Medical liability insurance premiums for physicians have steadily increased since 2019, according to data from the Medical Liability Monitor, a national publication that analyzes liability insurance premiums. The Monitor studies insurance premium data from insurers that cover internists, general surgeons, and obstetrician-gynecologists.
From 2019 to 2023, average premium rates for physicians increased between 1.1% and 3% each year in states without patient compensation funds, according to Monitor data.
“Nuclear verdicts are a real driver of the industry’s underwriting losses and remain top of mind for every malpractice insurance company,” said Michael Matray, editor for the Medical Liability Monitor. “Responses to this year’s rate survey questionnaire indicate that most responding companies have experienced an increase in claims greater than $1 million and claims greater than $5 million during the past 2 years.”
However, increases vary widely by region and among counties. In Montgomery County, Alabama, for instance, premiums for internists rose by 24% from 2022 to 2023, from $8,231 to $10,240. Premiums for Montgomery County general surgeons rose by 11.9% from 2022 to 2023, from $30,761 to $34,426, according to survey data.
In several counties in Illinois (Adams, Knox, Peoria, and Rock Island), premiums for some internists rose by 15% from $24,041 to $27,783, and premiums for some surgeons increased by 27% from $60,202 to $76,461, according to survey data. Some internists in Catoosa County, Georgia, meanwhile, paid $17,831 in 2023, up from $16,313 in 2022. Some surgeons in Catoosa County paid $65,616 in 2023, up from $60,032 in 2022. Inflation could be one factor behind higher liability premium rates. Claim severity is a key driver of higher premium rates, White added.
“We have not seen stability in claims severity,” he said. “It is continuing to go up and, in all likelihood, it will drive [premium] rates up further from this point.”
Alicia Gallegos is a freelance healthcare reporter based in the Midwest.
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Publish date : 2024-02-02 10:54:19
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