The impact of large medical malpractice awards on malpractice awardees.

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The impact of large medical malpractice awards on malpractice awardees a

Allen W. Imershein Ph.D. & Alan H. Brents

b

a

Director, Institute for Health and Human Services Research , The Florida State University , 2035 Paul Dirac Drive, 236 HMB, Tallahassee, FL, 32310 b

Law student at Boalt School of Law , University of California , Berkeley Published online: 23 Jul 2009.

To cite this article: Allen W. Imershein Ph.D. & Alan H. Brents (1992) The impact of large medical malpractice awards on malpractice awardees, Journal of Legal Medicine, 13:1, 33-49, DOI: 10.1080/01947649209510873 To link to this article: http://dx.doi.org/10.1080/01947649209510873

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The Journal of Legal Medicine, 13:33-49 Copyright © 1992 by Hemisphere Publishing Corporation

Downloaded by [McGill University Library] at 13:45 09 December 2014

THE IMPACT OF LARGE MEDICAL MALPRACTICE AWARDS ON MALPRACTICE AWARDEES Allen W. Imershein, Ph.D.* Alan H. Brents*

INTRODUCTION Cries of "crisis" in medical malpractice have been heard since the early 1970s. Initially, concern was manifested regarding the availability of medical malpractice insurance, as many insurance companies sharply curtailed or eliminated coverage for medical malpractice claims in the early 1970s. The crisis rhetoric abated in the middle and late 1970s, but recurred in the 1980s, this time as a concern over the affordability of medical malpractice insurance.1 While the cost of medical malpractice insurance has risen rapidly for all physicians, physicians in certain regions and specialties have experienced disproportionate increases. For example, the authors have reported that a neurosurgeon in South Florida in July of 1987 paid a medical malpractice premium 18.72 times higher than that paid by general practitioners elsewhere in the state.2 Additionally, the spread in rates throughout Florida increased between 1983 to 1987, and rates in South Florida rose faster (for all classes of physicians) than rates in the rest of the state. The highest rates occurred for South Florida orthopedic surgeons, obstetricians, and neurosurgeons, all of whom paid more than 10 times the premium paid by general practitioners outside of South Florida.

* Director, Institute for Health and Human Services Research, The Florida State University. Financial support for this research was provided by the Florida Physicians Insurance Company, the Florida Orthopaedic Society, and the Florida Neurosurgical Society. Address correspondence to Professor Imershein at the Institute for Health and Human Services Research, Florida State University, 2035 Paul Dirac Drive, 236 HMB, Tallahassee, FL 32310. † Law student at Boalt School of Law, University of California at Berkeley, J.D. 1992 (anticipated). 1

GENERAL ACCOUNTING OFFICE, MEDICAL MALPRACTICE: CASE STUDY ON FLORIDA (1987).

2

Imershein & Brents, The Impact of Large Medical Malpractice Awards on Malpractice Awardees: Final Report (Institute for Health and Human Services Research 1989).

33


34

IMERSHEIN AND BRENTS

Public concern over the medical malpractice crisis arose primarily as a result of the reduced availability of obstetric care, ostensibly as a result of higher premiums. A 1985 national survey of obstetrician/gynecologists found 23 % stating they had reduced the number of high-risk pregnancies they treated. Twelve percent reported restricting their practice to gynecology to reduce their malpractice premiums and exposure to the risk of lawsuits.3 In Florida, 24.4% of obstetrician/gynecologists reported dropping obstetrics from their practice,4 while Flagler Hospital in St. John County closed its obstetrics ward in July of 1986 because of high premiums.5 State legislatures responded to the medical malpractice crisis with enactment of tort reform legislation. Most of this legislation has focused on attempts to reduce the cost of medical malpractice insurance, via such methods as limiting damages, offsetting awards by the amounts of collateral payments, reducing the statute of limitation, and placing limitations on attorney fees.6 Likewise, most of the academic and policy attention relative to medical malpractice has focused on the issue of cost.7 Our study supplements this body of research on medical malpractice cost with an investigation of the life experiences of medical malpractice plaintiffs. Our specific concerns are as follows: (1) the impact of litigation on plaintiffs' lives; (2) plaintiffs' motives for filing lawsuits; (3) practical problems in filing medical malpractice lawsuits; (4) plaintiffs' suggestions for change in the medical malpractice system; and, (5) the financial impact of awards or settlements received by medical malpractice plaintiffs. We decided that our findings would have the most relevance to the current policy debate if we focused on plaintiffs receiving large awards or settle3

4

Zuckerman, Roller, & Bovbjerg, Information on Malpractice: A Review of Empirical Research on Major Policy Issues, 49 LAW & CONTEMP. PROBS. 85 (1986). Anonymous, Insurance Increases Give Florida OB/GYNs Labor Pains, 60 HOSPITALS 16 (1986).

5

GENERAL ACCOUNTING OFFICE, supra note 1.

6

King & Francis, 1986 Health Care Legislation (National Conference of State Legislatures 1987); Landes, 1987 Health Care Legislation (National Conference of State Legislatures 1988); Polchow, 1985 Health Care Cost Containment Legislation (National Conference of State Legislatures 1986).

7

See, e.g., ACADEMIC TASK FORCE FOR REVIEW OF THE INSURANCE AND TORT SYSTEMS, PRELIMINARY FACT-FINDING REPORT ON MEDICAL MALPRACTICE AND MEDICAL MALPRACTICE RECOMMENDATIONS

(Gainesville, FL 1987); Bovbjerg & Havighurst, symposium editors, Medical Malpractice: Can the Private Sector Find Relief? 49 LAW & CONTEMP. PROBS. (1986); P. DANZON, MEDICAL MALPRACTICE:

THEORY, EVIDENCE, AND PUBLIC POUCY (1985); Pennock, The Effect of Comparative Fault on Personal Injury Awards in Malpractice Lawsuits Involving Multiple Tortfeasors, 6 J. LEGAL MED. 223 (1985); R. SAILORS & B. NEW, TOWARDS PREVENTION AND EARLY RESOLUTION: REPORT AND RECOMMENDATIONS OF THE GOVERNOR'S TASK FORCE ON MEDICAL MALPRACTICE (Tallahassee, FL 1986);

Shoenberger, Medical Malpractice Injury: Causation and Valuation of the Loss of a Chance to Survive, 6 J. LEGAL MED. 51 (1985); GENERAL ACCOUNTING OFFICE, MEDICAL MALPRACTICE: INSURANCE COSTS INCREASED BUT VARIED AMONG PHYSICIANS AND HOSPITALS (1987); GENERAL ACCOUNTING OFFICE, MEDICAL MALPRACTICE: SIX STATE CASE STUDIES SHOW CLAIMS AND INSURANCE COSTS STILL RISE DESPITE REFORMS (1987).


MEDICAL MALPRACTICE AWARDS

35

ments. Accordingly, our primary study group consists of Florida medical malpractice plaintiffs who had received a medical malpractice jury award or settlement in excess of $250,000. We also examined Florida medical malpractice plaintiffs in two other categories, those who received no award or settlement, and those who received an award or settlement from $50,000 to $99,999. Although our findings are given in detail in a later section, it should be noted that we found significant evidence that many medical malpractice plaintiffs are pursuing significant non-economic goals in addition to or in place of economic goals. These non-economic goals should be considered in any attempt to reform the medical malpractice system to reduce total cost. I. METHODS We experienced some difficulty in obtaining the names of Florida medical malpractice plaintiffs, as the Florida Department of Insurance, which maintains a Medical Malpractice Closed Claims Survey based on information provided by medical malpractice insurers, is required by law to keep patient names confidential. We did, however, obtain information from this survey on physicians with medical malpractice claims in specified ranges. From this information, we searched for matching court cases in eight Florida counties (Broward, Dade, Duval, Hillsborough, Leon, Orange, Pinellas, and Polk). We then took the names of plaintiffs so obtained and searched for matches in the local county phone books. Possible matches were then contacted by telephone. From a total of 682 possible matches, we were able to contact 82 respondents who acknowledged being medical malpractice plaintiffs. Forty-seven of these plaintiffs refused to grant interviews. The 35 plaintiffs who consented to participate were asked to respond to a standardized questionnaire over the phone. Sixteen of these plaintiffs also consented to inperson interviews. These interviews were unstructured and exploratory in nature, but focused, as did the phone questionnaires, on the following factors: (1) the course of the respondent's medical malpractice litigation; (2) the respondent's opinion of the legal and medical systems; (3) significant family events in the respondent's life since the adverse medical incident for which a lawsuit was filed; and, (4) the financial impact of the adverse medical incident and any award or settlement on the respondent's life. We caution readers that our sample of cases must be regarded essentially as a "convenience" sample. We make no claims about how well medical malpractice plaintiffs from the eight Florida counties we selected represent medical malpractice plaintiffs throughout the country. First, our method of locating cases prevented us from locating certain


36


categories of mobile plaintiffs. We could not locate any plaintiffs who had moved from the county in which the suit was filed, nor any plaintiffs who filed suits in counties in which they did not live. We also missed many plaintiffs who had moved within the same county since publication of the most recent phone book. Although it is difficult to say exactly how the exclusion of these groups affected the survey, it is reasonable to assume that a mobile group would differ from a more geographically stable group. Second, our method of locating cases did not find those plaintiffs: (1) who have no phone; (2) whose phone is listed in another person's name; or, (3) who have an unlisted phone number. Once again, it is reasonable to assume that this group of plaintiffs, especially individuals with no phone or with an unlisted phone number, differ from persons who are more accessible by phone. Third, it is difficult to gauge how those plaintiffs we located who refused to participate differ from those who agreed to participate. Almost certainly, some of the refusals came from people who generally refuse to participate in surveys. Some of them probably preferred not to discuss their litigation. Five of those who refused to participate cited "painful memories" as their reason; three others who refused to participate did so in a very forceful, angry, or obscene manner. A substantial probability exists, therefore, that our sample underrepresents those plaintiffs who have had the most trouble dealing with their adverse medical incident and the subsequent litigation. II. SAMPLE CHARACTERISTICS As mentioned earlier, our sample is comprised of three distinct groups: (1) those respondents who received no award or settlement; (2) those respondents who received an award or settlement between $50,000 and $99,999; and, (3) those respondents who received awards or settlements over $250,000. Group one includes nine respondents; group two, seven; and group three, nineteen. In 18 of the cases, the individual suffering the adverse medical event was male; in 17 cases, female. Thirty-two of these individuals were white, three black. The age range for the injured individual at time of injury is given in Table 1. The relationship between our informant and the person suffering the injury were: same, ten; mother, three; father, one; spouse, eighteen; son, one; and daughter, one. Twenty-three of our respondents' cases were settled; two went to trial with a verdict for the plaintiff; four went to trial with a verdict for the defendant; one case was summarily dismissed by the judge; four cases were dropped by the plaintiffs with no definitive legal judgment ever rendered; and one case was unclassifiable.

37



TABLE 1.

Age

of Injured Individual

Age Range in Years

Number of Cases

0-9 10-19 20-29 30-39 40-49 50-59 60-70 Unk.

4 1 2 4 7 8 7 2

III. FINDINGS Our findings are broken down into several areas corresponding to our major areas of inquiry. These areas were: (1) impact of litigation on plaintiffs' lives; (2) plaintiffs' motives for filing lawsuits; (3) practical problems with pursuing lawsuits; (4) plaintiffs' suggestions for change in the medical malpractice system; and, (5) the financial impact of settlement and jury awards on plaintiffs. In each section, we summarize and review our major findings and present our conclusions from these findings. A. Impact of Litigation We were concerned about the possible effects on our plaintiffs of the process of litigation itself, aside from the effects caused by the adverse medical incident. Accordingly, we asked our respondents: "Aside from the problem caused by the medical injury itself, did the process of pursuing your claim create any additional problems?" Two respondents (5.71%) failed to answer; 16 (45.71%) answered "no"; and 17 (48.57%) answered "yes." Those who answered yes were asked to classify how disruptive these problems were to their lives. Table 2 lists their responses. The major problems our respondents cited as being caused by the process of litigation are: (1) reliving the emotions of the original adverse medical incident; (2) having one's personal life and morality examined and attacked; and, (3) the financial impact of losing and having to pay expenses and fees for the TABLE 2.

Disruption of Life by Lawsuit

Amount of Disruption

Freq.

Percent of "Yes" Answers

Percent of All Resp.

Minor Significant Major Extreme

4 3 5 5

23.53 17.65 29.41 29.41

11.43 8.57 14.29 14.29

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opposing side. In the sections below we analyze these problems, as well as potential benefits from litigation, in greater detail.


1. Reliving the Emotions of the Adverse Medical Incident Five of our respondents reported that undergoing the litigation process caused them to relive the emotional distress of the original adverse medical event. Many of the respondents who settled their claims cited as one reason a desire to avoid the emotional strain of a trial. Several respondents noted that the termination of the lawsuit, through settlement or trial, enabled them to finally come to terms with the original adverse medical incident. As one respondent put it: "When I settled, I was finally able to accept my wife's death." 2. Harassment A most striking finding was that 14 of the 17 respondents who noted problems from litigation mentioned as one of their reasons some form of what they considered "harassment" from the opposing side's attorney(s). Four respondents believed that they were asked questions that were either irrelevant or for which they could have no knowledge. Examples included the following: (1) asking children, who had been very young at the time of their father's death, why they had not visited him in the ICU; (2) asking respondents to give extremely detailed information about relationships formed with physicians, going back over decades; and, (3) asking respondents if they had asked each physician ever visited if the physician had medical malpractice insurance. Eight respondents reported that they, and often their neighbors and friends as well, were asked excessively personal questions about the respondents' lives. In one case involving a damaged nerve in the right hand, a respondent reported that she and her husband were asked questions about: (1) her husband's previous marital history (he had been married twice before); (2) sexual and communication problems between her and her husband; and, (3) her previous social history (who she had dated previously, whether they had been sexually intimate, and the like). Another respondent was confronted in court with pictures and videotapes taken of him and his family without his knowledge. Eight respondents felt that the opposing attorney(s) attempted to portray them as immoral people. One woman, suing over a child braindamaged at birth, found herself being questioned extensively about her smoking during pregnancy and her parenting practices. She stated: "They tried to say that I was a bad mother." One man, suing over his wife's death, felt that the other side attempted to portray him as an unfit father. A woman suing over her husband's death reported that the opposing side had private investigators dig up information about her; they found out about a



39

man she had dated (after her husband's death), and the opposing attorneys questioned her intensively about that relationship, attempting, she felt, to portray her as promiscuous. Other examples included accusing a respondent of attempting to "cash in" on her husband's death and accusing a mother and father, who filed suit over mistreatment of their daughter, of not providing for their children's medical needs. The individuals undergoing these personal interrogations and accusations had a sense of "double victimization," of being victimized first by the adverse medical incident and second by the invasion of their privacy and/or the accusatory tone of the opposing attorneys. One respondent specifically credited the minute examination of her and her husband's personal lives in the lawsuit as contributing to the breakup of their marriage. For another respondent: "It was like a rape trial, where they put the victim on trial." 3. Financial Impact of Losing Three of our respondents suffered a serious financial impact from being on the losing side of a lawsuit. Each had to pay their attorney's expenses, and also the fees and expenses of the other side. One plaintiff, who also had to pay an attorney to defend him when the physician filed a malicious prosecution suit against him, reported that he lost $15,000 in attorneys' fees and expenses. Another respondent reported having to take out a second mortgage on his house to pay attorney's fees and expenses. The third respondent had to switch from a private hospital to a Veteran's Administration hospital after paying the opposing side's attorneys' fees. It is also interesting to note that one of our respondents reported that originally she did not go to an attorney because she had no money and thought she would have to pay just to get a consultation. Another respondent reported that she terminated her lawsuit because she could not afford to pay the $1000 that her attorney demanded for expenses in connection with getting an expert medical opinion. In another case, a married couple, who settled their lawsuit, noted that if the husband had not had a goodpaying job, then they would not have filed the suit for fear of having to pay fees and expenses if they lost.

4. Benefits Two of our respondents reported that the process of pursuing their lawsuits was beneficial (in other than a financial sense). Each cited the healthy effects of being able to tell their story, of "getting it out in the open." As noted below, this desire to "get it out in the open" was a major factor in many respondents' decisions to sue. Also of interest in this connection is that many respondents indicated that talking about the situation to us was beneficial. Three of these respondents made this observation despite the fact that they had earlier admitted that they had misgivings

40


about talking to our interviewer, and even considered cancelling the interview.


5. Conclusions Based on the above, we conclude that in most cases, the process of litigation produces at most a minor harmful effect on medical malpractice plaintiffs. However, the potential exists that, in a small minority of cases, the process of litigation can significantly exacerbate the problems faced by medical malpractice plaintiffs. On the other hand, not all possible effects of litigation are harmful. The process of litigation can provide a substantial non-financial benefit for medical malpractice plaintiffs via the opportunity to tell their story, and thus to "get it off their chest." B. Motivations for Suing The obvious motivation for filing a medical malpractice suit is to obtain monetary compensation for the adverse medical incident. We were interested in what other motivations might be at work in the decision to sue. We felt that to ask a direct question about motivation would be particularly likely to produce answers that were either self-serving or calculated to please the interviewer. Accordingly, we addressed the issue through a more indirect question: "If you had had the opportunity of receiving guaranteed compensation for medical expenses and lost income caused by the medical injury, but no compensation for pain and suffering, inconvenience, or other non-economic losses, would you have taken that opportunity? Why or why not?" This question also allowed us to gauge how our respondents would feel about "no-fault" medical malpractice systems, in which injured persons are compensated for their economic losses from adverse medical events without regard to fault on the part of the physician. Four respondents (11.43%) did not answer the question; 11 (31.43%) answered "yes"; and 20 respondents (57.14%) answered "no." The reasons given by those who responded " n o " are detailed below. 1. Pain and Suffering Nine respondents felt they deserved compensation for their emotional and physical pain and suffering. One of these respondents even admitted that the adverse medical incident had produced no real financial loss. Another admitted that his income was high enough for him to absorb the financial impact easily, but that he felt that "they owed me something for the pain they caused me." 2. Desire to Punish the Physician or Hospital Thirteen respondents indicated that they were angry at the physician or hospital or wanted to punish them. As one respondent put it, "retribu-



41

tion, not money, was the issue." Another sued because "there were just too many mistakes, one right after the other, at the hospital." One respondent thought that the hospital had provided second-class care to her husband because they had no medical insurance. Five respondents were angry that the hospital or physician either lied to them about the problem or seemed not to care about it. In three of these cases, the respondents believed that the hospital or physician was slow to recognize that there was a problem and to deal with it. Although only one respondent specifically stated that she felt "betrayed" by the physician or hospital, there appeared to be a general sense of betrayal on the part of most respondents. They believed that they had trusted the physician or hospital with their life or the life of a relative and that this trust had been misplaced. 3. Make the Error Public Five respondents indicated that they wanted the hospital or physician to acknowledge the error. Similarly, four respondents stated that they wanted to make the incident public. 4. Deter Future Errors Four respondents expressed either a general desire to deter future medical errors or a specific desire to prevent their physician from making future mistakes. At least two respondents wanted the physician's license revoked. 5. Input from Other Medical Personnel Five respondents reported that part of the reason they sued was that someone in the medical field (a physician, nurse, or technician), who was aware of the incident, had informed them they might have cause for a lawsuit. 6. Conclusions Based on the above, we conclude that factors other than the desire for money play a significant role in the decision to sue. The most significant factor, both for respondents who received compensation and for respondents who received no compensation, is some form of retribution and/or deterrence, a desire to punish, to make the incident public, or to prevent future mistakes. This is associated with the fact that, for most plaintiffs, the adverse medical event is experienced as a form of betrayal by someone the plaintiff had trusted. This desire for retribution or deterrence, combined with the desire, in many cases, to obtain compensation for pain and suffering, raises serious questions about the likelihood that a no-fault medical malpractice system

42


would work. One factor that might facilitate acceptance of such a system would be to combine it with a mechanism that would permit patients to effectively complain about hospital and physician errors. It was a widespread perception among our respondents that physicians do not police each other, and that filing lawsuits is the only effective avenue by which they could publicize the errors or punish the physicians.


C. Practical Problems in Medical Malpractice Lawsuits We were also concerned with the problems that our plaintiffs encountered in the process of pursuing the litigation. According to our responses, these problems broke down into five areas: (1) difficulties with medical records; (2) lying; (3) difficulty getting expert testimony; (4) difficulty finding an attorney; and, (5) difficulty with juries. / . Difficulties with Medical Records Three of our respondents reported difficulties in getting the other side to hand over medical records. Two reported that records handed over were incomplete, with sections missing. Five felt that the records that were produced by the other side were altered in some way, most often by the addition of material that had not originally been in the record. Examples of alleged altered records included the following: (1) producing a fake consent form, not the one originally signed by the patient; (2) adding entries to a chart after the fact by the head nurse; and, (3) adding a section to a chart stating that a physician had briefed a patient on matters that had not been discussed with the patient. 2. Lying Aside from the five examples of altered records cited above, three other respondents reported that, in their view, the physician lied about the underlying facts of the case in the context of a deposition or during trial. 3. Difficulty Getting Expert Testimony Seven respondents reported difficulty getting physicians or other medical personnel to testify. In one case, a nurse known to the respondents informed them that she would perjure herself at the trial if called as a witness. In another case, a respiratory therapist who had informed the plaintiffs that they should sue refused to testify because he was still employed at the hospital. In six of these cases, respondents either had great difficulty or were unable to get another physician to testify for them. 4. Difficulty Finding an Attorney Given that our sample involved a group of people who had at least succeeded in filing a medical malpractice lawsuit, and the popular image of


43

attorneys as "trigger-happy" with respect to filing lawsuits, we were mildly surprised to find that three of our respondents complained about the difficulty of finding an attorney to handle their case. Each of these respondents had to go through three or four law firms before finding one that would take their case.


5. Difficulty with Juries Two of the four respondents in our sample, who were on the losing end of jury verdicts, felt that the primary reason for the outcome was the inability of the jury to understand the complex medical issues involved. One respondent stated that "there were six medical experts testifying, three for each side. There were six different opinions given. The jury didn't know what to make of that, so they found for the doctor." The other respondent who complained of problems with the jury indicated that there was a very small pool of people from which to select the jury. He stated: "We ended up with an eighteen-year-old check-out clerk on the jury, for Christ's sake. I don't mean to say that a check-out clerk can't be intelligent, but there's no way an eighteen-year-old could understand what was going on in this trial." 6. Conclusions We find it significant that our sample, comprised mostly of people who managed to successfully prosecute their lawsuit, reported so many problems with the process. We conclude that significant barriers exist in the current system to filing and successfully pursuing claims of medical negligence. If one of the effects of a no-fault system would be to minimize barriers to pursuing claims, then it seems reasonable to conclude that a nofault system would cost more than the current system, given the increased number of claims that likely would result. Because most of our respondents did not mention any form of "cheating" (alteration of records or lying), we conclude that this does not happen in most cases. Furthermore, because accusations of cheating are particularly likely in an adversarial system, the fact that seven of the eight respondents who made claims of cheating received no compensation raises questions about the validity of this information. We are therefore reluctant to conclude that cheating actually happens in a substantial minority of cases. We prefer to limit ourselves to the conclusion that, in a substantial minority of cases, medical malpractice plaintiffs believe that the opposing physician or hospital cheated in some manner. This is a significant observation in light of our above-mentioned conclusion that most respondents felt "betrayed" in some sense by the adverse medical incident. For those respondents who felt that the opposing side cheated, this sense of betrayal is deepened. As one respondent put it: "[My] doctor messed up my eye.

44


Then he got up in court and lied about it. It just about killed me to hear him lie."


D. Respondents' Suggestions for Change We asked our respondents the following question: "Given the opportunity, what, if anything, would you change about the system for pursuing claims of medical negligence?" We classified the resulting suggestions into three major areas: (1) suggestions for making the legal process more efficient; (2) suggestions regarding the money that attorneys receive; and, (3) suggestions regarding changes in the field of medicine. / . Suggestions Regarding the Legal Process The suggestions offered by respondents regarding changes in the legal process are listed in Table 3. We were mildly surprised by the last four suggestions in the table, as they seem contrary to the interest of plaintiffs. However, several of our respondents maintained that, while their lawsuit was reasonable and justified, many or most medical malpractice lawsuits were not. Also of interest in this regard was the stated distaste on the part of many of our respondents for the idea of suing someone, and their consequent contention that they had to overcome great reluctance to file their lawsuits. 2. Suggestions Regarding Attorneys' Compensation Six respondents suggested limiting attorneys' fees. Two felt that attorneys who were paid on a contingency basis should cover their own exTABLE 3. Suggestions Regarding the Legal Process Suggestion

tt of Res.

More focus on truth Workable no-fault system Process should be speeded up Easier access to medical records and/or medical testimony Plaintiffs should only have to give one deposition More mediation or arbitration Plaintiffs' privacy should not be abused Plaintiff should receive the full amount of physician's medical malpractice insurance if the physician is found liable Should be easier to get an attorney Malpractice cases should only be handled by specialist attorneys Statute of limitations for medical malpractice actions should be longer Reduce the number of medical malpractice cases being filed Reduce the amounts of medical malpractice awards Prohibit advertising by attorneys Place a limit on pain and suffering awards

1 2 6 5 1 2 1

:!



45

penses, rather than charge them to the plaintiff. One respondent suggested that the state should verify the accuracy of the expenses that attorneys claim. Although only six respondents specifically suggested a reduction in attorneys' fees, it should be noted that, when asked if they considered their attorneys' fees reasonable, fully 18 of the 35 respondents answered "no." This did not appear to reflect any lack of confidence in the attorney's ability, as only eight respondents indicated that they were dissatisfied with the way their attorney handled the case (13 were satisfied, and 12 rated their attorney's performance as outstanding; two respondents gave no answer). In our extended interviews, several respondents reported being shocked when they found out that they had to pay expenses as well as the contingency fee percentage. 3. Changes in the Medical System Eight respondents urged better regulation of physicians. Four of these respondents respectively suggested the following: (1) physicians' fees should be reduced; (2) physicians should perform fewer unnecessary operations; (3) physicians should honor consent forms; and, (4) physicians should admit mistakes. It should be noted in this context that, in five of our extended interviews, respondents insisted on discussing what they considered high medical expenses, despite the fact that we asked no questions about this subject and had defined our concern as being the process of their lawsuit. 4. Conclusions We find it particularly significant that more than half of our sample considered their attorneys' fees to be too high, and that we received six suggestions that attorneys' fees be limited. This may be the only topic about which a majority of physicians and medical malpractice plaintiffs would agree. Such a finding is not particularly surprising, however, as high attorneys' fees work to the detriment of both physicians and plaintiffs. Many responses addressed the medical profession rather than the medical malpractice system. Given that these responses were basically off the topic of the question, we find them significant. Once again, we would tie this in with our previous discussion of the feeling of "betrayal" by the medical profession experienced by most plaintiffs. We conclude that this sense of being betrayed by, and being angry at, the medical profession results, ironically, from the general high level of trust placed in physicians. The average person wants to be able to place his or her life in the hands of a physician with a blind faith in receiving good care. Consequently, when outcomes are unsatisfactory, patients may feel betrayed. The same positive attributions that benefit physicians (by supporting their authority and high


46


incomes) backfire when adverse medical incidents occur. As noted above, six respondents suggested speeding up the litigation process. In considering this suggestion, we should note that two respondents thought that their case took too little time; 12 believed the amount of time was reasonable; and 15 felt that it took too long for the lawsuit to be resolved. Our respondents' attitudes regarding the length of time involved in litigating their claims were directly related, as one would expect, to the actual amount of time their respective cases took. A nearly perfect demarcation occurred at the 24-month mark. Only one respondent who believed that the process took too long reported a time shorter than 24 months; likewise, only one respondent who thought that the length of time involved was reasonable reported a time period longer than 24 months. Accordingly, we conclude that, if one's goal is to reduce the frustration produced by protracted medical malpractice litigation, then one should aim to move medical malpractice lawsuits through the system in two years or less. E. Financial Impact of Settlements Finally, we especially wished to examine the financial impact of the awards on our respondents. We were concerned with the adequacy of the compensation as well as the use to which it was put. We were also concerned about the effects of lump sum payments. For each of these questions we compared the responses of our plaintiffs across the financial categories of awards noted earlier and below. 1. Adequacy of Compensation We asked our respondents who received settlements or jury awards if their award was adequate to compensate for their losses. We next asked them to gauge the adequacy of their awards to compensate them solely for their economic losses, their medical expenses, and lost income caused by the adverse medical incident. Of the plaintiffs receiving awards in the $50,000 to $99,999 category, only three considered their awards adequate, four considered them inadequate. For plaintiffs receiving $250,000 or more, nine considered the amount inadequate, six considered it adequate, and one considered it more than adequate. However, the number of members of the category $250,000 plus reporting their award as adequate or more than adequate changes dramatically when respondents limit their answer to economic loss only. Only seven respondents considered their awards sufficient compensation for all their losses, but 13 considered it sufficient for their economic losses, with four (versus one previously) considering their award more than adequate. We conclude from these responses that many medical malpractice plaintiffs feel that they deserve substantial compensation for "pain and suffering," a finding that is consistent with our earlier findings regarding



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the reasons plaintiffs give for not wanting to settle their claims for amounts covering economic losses only. We also conclude that most medical malpractice plaintiffs who receive awards over $250,000 believe that their economic losses have been covered, while substantially fewer believe that they have been adequately compensated for all loss, including "pain and suffering." We also asked our respondents to assess whether their financial condition was better before the adverse medical incident or after they received the award or settlement. For those respondents in the $50,000 to $99,999 category, three considered their financial condition better before the injury, two were better after the injury, and two about the same. For the higher category, $250,000 plus, three respondents thought they were better off before the injury, eleven were better off after, and four about the same. The difference in the percentage of respondents reporting their financial condition as better after the settlement is striking, going from 28.6% for the $50,000 to $99,999 category to 61.1% for the $250,000 category. Given that we would expect plaintiffs who received "windfall" settlements to be less likely to respond to our survey, we find substantial support here for the proposition that those receiving awards over $250,000 are being adequately compensated, if not more than compensated, for their economic losses. Also of interest in this regard is the fact that 9 of the 19 respondents in the $250,000 plus category reported that they had used or would use part of their award to finance educational expenses for family members. The average amount of money that respondents in the $250,000 category reported they had set aside (invested rather than spent) was 81.5% of their award. Surprisingly, the figure was 73.3% for the $50,000 to $99,999 category. It would seem that a high proportion of the money received by our respondents went to compensate future economic loss or to generate future gain as opposed to reimburse for previous economic loss. Table 4 lists responses to the question of what the financial impact would have been if the respondents who received an award or settlement had not received the money. We find it significant that, for 12 of these respondents, loss of the settlement or award would have produced no major problems beyond the need to continue working rather than retire. On the other hand, the other eight respondents reported potentially serious financial consequences. Based on these responses, and our other findings (amount of money invested, use of money spent for educational expenses, and respondents' opinions on the adequacy of awards), we conclude that a substantial number of medical malpractice plaintiffs do not desperately "need" the money they are seeking. We caution that we take no position on whether they "deserve" it, and note that the tort system is based on principles of compensation (including compensation for future economic loss) and not individual welfare.

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TABLE 4. Financial Impact of Not Receiving Settlement or Award Response Category

Frequency

Broke, on welfare, in poorhouse, or "starve" Have to give up my child Have to move in with my children Have to work rather than retire No major problems, would be a bit less financially secure No impact

5 1 2 3 3 6

2. Lump Sum Payments Our second major finding on the financial impact of settlements or awards concerns lump sum payments. Twenty of our respondents received a lump sum payment (seven in category $50,000 to $99,999 and 13 in category $250,000 plus). Three of these respondents reported a problem with lump sum payments. One respondent, in the $250,000 plus category, complained that he had to pay taxes on the interest from investments he made with the money. A second respondent, in the $50,000 to $99,999 category, reported that she and her husband took their lump sum payment, ran through it very quickly, and got so used to spending heavily that they ended up going bankrupt. A third respondent, in the $250,000 plus category, stated that one of his sons took the money and spent it very quickly. He used it mainly to buy illegal drugs and, in the process, became a drug addict. We conclude from the above responses that the possibility exists that lump sum payments can be detrimental to some plaintiffs. We leave it to policy-makers to decide whether this finding would justify greater use of periodic payments. To be fair, we should note that several respondents viewed periodic payments merely as a mechanism by which the insurance company seeks to reduce its cash outlay. At least one respondent expressed concern over the possibility that the insurance company could go bankrupt and be unable to pay the annuity. CONCLUSION By and large, the discussion in the literature of medical malpractice tort reform has focused on suggestions to reduce the cost of medical malpractice. Many of our findings have relevance to this issue, but are not confined to this issue. Our findings do not suggest significant harmful effects from the litigation process itself, although such harm could potentially occur in a minority of cases. But significant barriers to successfully pursuing litigation do exist; most of our respondents, all of whom successfully litigated, en-



49

countered numerous problems, including finding an attorney. A majority of our respondents felt that their attorneys' fees were too high. This suggests that an attempt to reduce the cost of medical malpractice litigation by reducing attorneys' fees, especially contingency fees in cases with large awards, would run into opposition only from attorneys. Moreover, factors other than money are clearly significant in the pursuit of litigation. If one is to define the function of the medical malpractice system being as solely to provide monetary compensation for those who really "need" it, then we found substantial evidence that many awards or settlements could be reduced or eliminated altogether. We caution, however, that this finding could reflect the significant barriers to filing a lawsuit that we find still exist. It is possible that persons of higher socioeconomic status are less "in need" of compensation for their adverse medical incident but, ironically, more capable of negotiating the obstacles to initiating litigation. A medical malpractice system truly based on a welfare logic, with most barriers to making and pursuing claims eliminated, might well result in more claims being filed and thus might be more costly. At the same time, the elimination of excessive or "unneeded" awards in such a system might cause it to be viewed as a more just and reasonable system. Our findings suggest, however, that monetary compensation for medical malpractice may not be the most important issue to many plaintiffs. More important may be the fact that most medical malpractice plaintiffs feel "betrayed" by the physicians or hospitals involved in their adverse medical incident. Consequently, medical malpractice plaintiffs have many motivations for suing besides the desire for monetary compensation. These motives include a desire to: (1) punish the physician; (2) make the incident public; and, (3) deter future mistakes. Medical malpractice plaintiffs choose to pursue these objectives through litigation because they believe that the mechanisms currently in operation to regulate physicians are woefully inadequate. We believe that these significant—we would even say powerful—noneconomic goals for many malpractice litigants have significant policy implications. Reforms aimed at reducing the total cost of medical malpractice could well fail if based strictly on a rational economic model to predict potential plaintiff behavior. Such a model also ignores the possibility of reducing total medical malpractice costs through providing alternative means of addressing potential plaintiffs' non-economic motives. Our findings suggest that for any reform to be successful it must provide plaintiffs with: (1) a forum in which to state their case; (2) public visibility; and, (3) a sense that proof of error would result in some form of effective discipline against the physician or hospital. Absent these opportunities in any reform model, plaintiffs' non-economic goals for pursuing litigation are not likely to be satisfied.

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