Medical Malpractice Insurance

What does John Wooden have to do with Medical Malpractice Insurance?

John Wooden was a Hall of Fame basketball player at Purdue who went on to be a Hall of Fame basketball coach at UCLA. He is the best basketball coach of all time; and his many books carved out a niche for him as a top-rated philosopher. He proved that calm and rational is a winning attitude.

In his book “Wooden on Leadership” he said a winning coach will, “Develop the same sense of responsibility in every player regardless of the amount of time they may get to play. The varsity squad is one team, not regulars and substitutes.”

He recognized that when any player on a team shirks his responsibility the entire team suffers.

Medical Malpractice Insurance

When a professional fails to live up to his responsibilities he damages society. We all lose a bit of trust in those we need to help us through our personal crisis. Our laws reflect the need for society to have responsible professionals, especially doctors and lawyers.  There are also a growing number of Clergy Malpractice suits in the United States, which is hard because of the separation of church and state, but we will concentrate on doctors and lawyers.

When a person sets themselves up as a professional they ask us to believe they have a special training and/or talent that allows them to help us. We place faith in that person and they are paid a salary that reflects a unique talent and are held in revere by society.

When that person improperly performs their duty or fails to perform their duty they are held liable if damages ensue.

Their community, as a matter of both incompetence and negligence, holds them to a standard of practice. Standards vary by specialty and area of the country. This is especially so in the case of a medical professional or an attorney, which is why we differentiate their professional liability by terming it “malpractice”. This is where the need for a specialty line of business insurance come into play.

Medical Malpractice Insurance

malpractice-insurance-doctorWhen people sense malpractice, they can react with anger resulting in legal action. When physician’s malpractice cases go to court, many of them are dismissed and most trial verdicts are decided in favor of the doctor. The percentage of malpractice claims against doctors that result in an award to the plaintiff is very small.

The process is long and arduous for all involved. Some doctors pay hundreds of thousands of dollars a year for their malpractice insurance.

States vary in what constitutes malpractice. In the 70’s many states moved away from a standard of care that considered only what was the customary practice in that area of the country. The standard in those states was broadened to include a national perspective. Expert testimony could be introduced from doctors throughout the country.

This greatly increased the number of suits. I assume that it was much easier to be an expert witness a few states away from your practice than it would be to testify against someone who went to the same medical school as you.

Specialists are held to a higher standard than general practitioners, as are those who perform procedures normally done by a specialist.

Some states apply the legal theory of “respectable minority rule”. If the physician was following a procedure that several of his colleagues used, he would not be found to be committing malpractice. Courts sometimes flounder on what number constitutes a “respectable minority”.

Other states use the “error in judgment” standard. As long as the physician is following accepted standards he cannot be held liable for malpractice for an error in judgment when selecting treatments and making diagnosis.

Medical malpractice involves the following elements:

  1. The existence of a legal duty to provide care/treatment, and
  2. A breach of that duty by failure to adhere to the professional standards, and
  3. A casual relationship between the breach and the injury to the patient, and
  4. Damages from that injury that the legal system can provide compensation.

Medical Malpractice Insurance Losses

According to the Institute of Medicine, preventable medical errors kill 98,000 people in the United States each year and injure many more.

Statistics compiled by the National Practitioner Databank show that in 2004 – 2006 there were 38,363 payouts to victims of medical malpractice with a median medical malpractice award of  $175,000.

MALPRACTICE

Early in my career in the 1970’s I worked for one of the largest insurers of professional liability in the United States. One of the units I worked in handled malpractice insurance for some of the largest hospitals in the United States. One of those was Mayo Clinic, which had an exemplary lack of malpractice, as I recall.

One of the Chicago hospitals that insurer had as a client suffered several large losses that we noticed included the same anesthesiologist. Through discovery we were able to determine that that particular anesthesiologist had been involved in wrongful death claims in over twenty situations — many which did not rise to the level of a malpractice suit, but all had gone through peer review. Thanks to the of the actions of that insurance company that person was found to be incompetent and lost his license.

In this instance, peer review had failed to stop the ill-equipped anesthesiologist from repeatedly inflicting great harm and death. In my experience, peer review can be effective, but often is not as effective as an insurance company with a healthy profit motive. Malpractice Insurance can be very good as a policeman for society.

In my opinion, through my experience with them, physicians are fairly naïve in matters of money and have much larger egos than the average person.

People who want to be doctors make a conscientious decision that they are better able to take care of people than those people are themselves.

At one point in my career I was the CEO of a small insurance company that was providing the Medical Malpractice for doctors at a teaching hospital at a state University. All of the doctors we covered had their own Malpractice Insurance through the hospitals where they worked for their actions as an employee. They also had their own Malpractice Insurance, in many cases, in their own practices. Neither of those policies would cover their actions at the College of Medicine at the University.

A student who the University had washed out of the program sued one of our doctors and the University. That student had been in his surgical rotation, which meant he was in his last year of med school. The student had scrubbed in and was assisting with a surgery.

med-student-malpractice

The doctor became frustrated by the ineptness of the student and sarcastically asked the student how many chambers the heart has and what were their functions. The cardiothoracic surgeon was appalled to find out that not only didn’t the student know the functions, he thought a heart had five chambers.

The University did an audit of the student’s work and found a consistent pattern of the student using pressure tactics to get his professor/doctors to give him a passing grade. Evidently every professor felt it was only a matter of time before someone ran him off.

Professional schools usually rely on their entrance standards to eliminate those incapable of graduating, so a surprising large percentage of those who start a program will graduate.

Part of my work for that company was to sit in on claim review. That file festered because the student would not accept that he could not become a doctor. He felt he had been let in on his merits, had passed every course, and should get his diploma.

He had the ego necessary to be a physician. He simply lacked the discipline to learn the material and, in the opinion of the school, was not fit to be a physician.

My position with that company ended before that claim was settled, but we had offered a considerable amount of money; and it had not been accepted. He told us no amount of money would take the place of the career he wanted.

Midwives Malpractice Losses

One only has to look toward the number of malpractice suits against midwives to understand the dynamics of Malpractice Insurance.

About 90% of physicians will experience a Malpractice suit during their career. About 30% of midwives will be sued. A nationally known midwife said. “Really, there are four factors that can predict the likelihood of a lawsuit: the number of years in practice (the more years of practice increases the likelihood of litigation), the number of births done, your age, and the region of the US where the midwifery practice is located. For example, I’m at high risk because of my years of practice…it’s all about exposure. It’s not about skill, it’s about numbers.”

Given my experience as an agency owner I would say the same thing.  My agency handles tens of thousands of transactions a year. We have had seven claims against us for professional liability (Insurance Agent’s Errors and Omissions). All have been resolved. Nothing was paid out in settlement on any of them, neither by our insurance company nor we have paid an award. In my opinion, and that of the court, our actions were blameless. We did, however, incur a lot of legal fees.

In one case we were brought in because our legal name starts with a “B” and the plaintiff attorney picked our name off the top of a list of licensed agents in our state for that company.  That was our only connection to the case. We had never heard of the plaintiff before the case, nor had the plaintiff heard of us. We were dismissed immediately at trial, but had to prepare, which cost quite a bit.

Things happen during childbirth that result in the need for money to care for the disabled child. Our society doesn’t shoulder that burden. The suit against the midwife is more about the pursuit of money than it is about the midwife doing something bad.7

Bad things do happen in hospitals. I’ve seen losses where the wrong limb was amputated, necessitating another surgery to remove the limb that should have been amputated in the first place. Doctors do misdiagnose for long periods of time causing the patients to miss treatment opportunities.

According to one study 1.5 million people a year are harmed by medication errors.

When bad things happen Malpractice Insurance can help.

Other Enhanced Insurance articles related to Professional Insurance:

General Liability or Professional Liability Insurance

Attorney’s Professional Liability Insurance

Errors and Omissions and Professional Liability Insurance for Independent Agents

Professional Liability / Errors and Omissions Insurance

Professional Liability Insurance for Veterinary Businesses

Veterinarian Professional Insurance

Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.

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