COMMENTARY

Docs Raise Money for Candidates; Why Mega Payouts Rise; More

Wayne J. Guglielmo, MA

Disclosures

January 22, 2015

In This Article

Why Are There More Mega Payouts?

Although both the number and costs of medical malpractice claims may have decreased sharply in recent years—as information from the National Practitioner Data Bank and the National Association of Insurance Commissioners, respectively, makes clear—the number of mega payouts or "super losses" is on the rise, according to a December 16th story in Insurance Business America.[2]

The story is based on a report from specialty healthcare insurer Hiscox, which is headquartered in Hamilton, Bermuda. Surveying its own data, the company found that its annual payouts for medical malpractice claims in excess of $5 million have increased dramatically during the past decade or so, rising from the 7.5%-10% range in the early 2000s to the 15%-25% range now. Company analysts expect that that rise will continue in the future.

What accounts for the increased frequency of these mega payouts?

One big factor is the consolidation of the American hospital industry, says Justin Keith, the company's vice president of underwriting: "There's a sentiment in the United States of general distrust with big business, so when your community hospital that you've known for 30 years becomes part of a much bigger national hospital corporation, you're no longer suing your friend.... You're suing some faceless name."

Keith also blames what he refers to as Americans' "increasingly litigious nature" for the rise in the percentage of higher verdict amounts. That said, he added that the growth in mega payouts runs the gamut across facilities of all sizes and types of healthcare practice, and without regard to how patients perceive the quality of care.

State Doctors Back an "I'm Sorry" Confidentiality Bill

Ohio doctors who offer a private apology to patients or family members after a medical mishap could soon have that conversation kept private and out of court, according to an Associated Press story that ran in early December on Ohio.com, among other news outlets.[3]

Favored by the state's physician groups, the legislation is aimed at encouraging doctors to reply to patient and family queries without fear of reprisals. By so doing, physician representatives believe, the number of malpractice suits could be reduced, because patients often sue in order to get not just fair compensation but also answers to their lingering questions.

States with similar proposals already on the books include Arizona, Colorado, Connecticut, Georgia, Massachusetts, and South Carolina, according to Tim Maglione, a lobbyist for the Ohio State Medical Association. In addition, legislation is pending in Congress that would accomplish much the same goal.

Not surprisingly, Ohio's trial attorneys have come out foursquare against the legislation. Doctors are alone among professionals in some states in their ability to keep their admission of mistakes from a jury or court, says Rick Topper, a Columbus, Ohio, trial attorney. Over the past decade, he adds, the number of medical malpractice lawsuits has already plummeted because of award limits and "I'm Sorry" statutes themselves.

"If the doctors are worried about lack of information, put it in the medical records," says Topper. "Then the patient is going to know what happened."

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