Staggeringly large malpractice awards against hospitals and doctors are rising worldwide, but especially in the United States, according to data from TransRe, an international reinsurance company that tracks large verdicts.
In December, a US jury returned a record $261m verdict against Johns Hopkins All Children’s Hospital, 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 Centre Health Network to pay $120m to a patient and his family after delayed stroke care that resulted in brain damage.
“Last year 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 $10m or more in the US, the data showed. Slightly more than half of those reached $25m or more, reports Medscape.
From 2012 to 2022, verdicts of $10m or more ranged from 34 in 2013 to 52 in 2022.
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 White, 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 non-economic damages is among those that have been ruled unconstitutional by courts. Utah’s cap on non-economic 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.
Research shows a majority of malpractice cases are dropped or settled before trial, and claims that go before juries usually end in doctors’ favour. 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, said 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.
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,” admitted 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 – an emerging practice where 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.
“This provides 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, 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 one case – the ‘Maya’ case, which involved child protection authorities – a judge later lowered the damages against Johns Hopkins All Children’s Hospital by $47.5m.
And in October, a judge rejected a record $110m medical malpractice award in Minnesota, reducing it to $10m. The district judge ruled the award was “shockingly excessive” and that the plaintiff should either accept the $10m award or retry the case.
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, show data from the Medical Liability Monitor, a national publication that analyses liability insurance premiums.
The Monitor studies insurance premium data from insurers that cover internists, general surgeons, and obstetrician-gynaecologists.
From 2019 to 2023, average premium rates for physicians increased between 1.1% and 3% each year in states without patient compensation funds.
“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 of the publication.
“Responses to this year’s rate survey questionnaire indicate that most responding companies have experienced an increase in claims greater than $1m and claims greater than $5m during the past two 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. And premiums for general surgeons rose by 11.9%, from 2022 to 2023, from $30 761 to $34 426, according to survey data.
In several counties, premiums for some internists rose by 15% and for some surgeons increased by 27% from $60 202 to $76 461, showed data.
Medscape article – Mega malpractice verdicts against physicians on the rise (Open access)
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