Unresolved: Capping jury awards for medical malpractice

[december]

*Originally posted by CarnalK *
** A Quickstart article says the Weiss report gave more context as well: **

Thanks for the link, CarnalK. The Weiss study is not something an insurance regulator or company actuary would pay attention to. Here’s why.

The fundamental assumption in ratemaking is that the amount premiums is a function of the amount of claims. Here’s an example to illustrate the principle. The per cents are fairly typical:

Suppose Expenses are 30% of premiums
Desired Profit is 5% of premiums
Investment income is 45% of premiums

For every $100 of premiums, the insurance company will get an additional $45 of investment income, so total income is $145.

The company uses $35 for expenses and profit, leaving $110 for losses.

Now, turn it around and start with the loss estimate. Suppose the company projects an average obstetrician will have losses of $100,000. The company will charge her a premium of $110,000.

So, the way all insurance professionals determine how a law change will impact premium is to estimate how it will impact losses. E.g., a 25% reduction in loss costs will mean a 25% reduction in premiums. This is fundamental to all actuarial work.

Proportionality doesn’t always apply in the short run. Ratemaking in malpractice is uncertain. Companies may undercharge for several years, then catch up suddenly. There’s a whole other area of study of why rates vary. I studied the question a 15 years ago when I was the featured speaker on a special actuarial meeting on the insurance cycle.

Despite the insurance cycly, in the long run, premiums are based on losses. If you look at successful casualty insurance companies over a period of time, their ratio of loss to premium is typically in the range of 110% - 120%.

The Weiss study doesn’t differntiate between the impact of the insurance cycle and the impact of the change in benefits. That’s no way to bring clarity.

[Typo_Negative]

*Originally posted by Broomstick *
**Gee, really?

Yes, really. When there is trial and malpractice is found it is the insurance company that writes the check. That, after all, is what malpractice insurance is for.

**
[/QUOTE]
He knows that. He was being sarcastic.

A question: Several of you have given hypothetical examples of ‘pain and suffering’ scenarios where the patient has died and the family is suing. Wouldn’t they be suing for wrongful death and not pain and suffering? I was under the impression that a pain and suffering award only went to a person who was injured by a doctor. Am I wrong?

I can only add that 250K seems like a paltry sum if someone has to live in constant pain due to a doctor’s error. I, personally, value my sex drive alone a heck of a lot more than 250K.

I mean, you’re life as you know and love it is ruined, and all you can collect is 250K. That sure doesn’t seem right.

I will gladly support a number or reforms. This isn’t one of them.

someone called for stats about the overall state of pain and suffering awards. I would like to see those. Also, I have seen several TV specials regarding bad doctors (including one horrifying show on VA Hospital doctors). One such show was about bad doctors screwing up and being sued in one state, closing up shop, and moving to another state. The gist was that their record of being sued wasn’t following them and their patients, insurers and even medical boards were largely unaware. (this show WAS a number of years ago, and I expect at least some improvement has been made).

[CarnalK]

Actually DSeid, the US study only uses three specialties as well(that’s why I mentioned it in my post). From the chart on your link:

SOURCE: Medical Liability Monitor, 2001. Percentages represent the combined average of the highest premium increases for OB/GYNs, Internists, and General Surgeons among select states, 2000-2001. Average highest premium increase is derived from the highest potential premium increase among internal medicine, general surgery or obstetrics/gynecology specialists in that state during 2001. These combined averages are not weighted.

And all the other tables on your link say “ob/gyn,internists,general surgeons” in the headers.

[CarnalK]

december said- The Weiss study is not something an insurance regulator or company actuary would pay attention to.
<insurance math snipped>
The Weiss study doesn’t differntiate between the impact of the insurance cycle and the impact of the change in benefits. That’s no way to bring clarity.

Well it’s purpose was to show the relation between legislative award caps and premium rates, not to instruct insurance actuaries. It seems to show the opposite relationship we might expect. The Weiss study specifically does note that the insurance business cycle(along with five other factors you can read in my top post) could have a greater effect than caps.

Are you sure clarity is the word you are looking for?

[DSeid]

Carnal, You are correct. I had missed that footer. The remaining however stands.

[Stratocaster]

*Originally posted by december *
**Good question. First a pedantic point. Punitive Damages are an unusual award when the action of the defendant or the insurance company are particularly outrageous. Most of the non-economic damages are categorized as Pain and Suffering.

My point is that the cap on non-economic damages may not be a sufficient reform, given that the goal is to maintain the affordability of malpractice insurance. More reform than that is desirable.

**OK. I understand now that you think a cap may not be enough. So my point still stands then, I guess. This was not the first time I’ve heard, from the same speaker, that this really wouldn’t affect awards significantly, while it would simultaneously save an entire industry from catastrophe. Those two thoughts really shouldn’t be hanging around in the same argument, methinks.

[Stratocaster]

*Originally posted by Broomstick *
**First, I didn’t advocate “legislating away” anything. Yes, there SHOULD be legal remedies for misconduct.

**OK, sorry if I misunderstood your position. There are certainly those who support this cap in this very thread, and that effectively does just as I suggest.

However, I do NOT think the average juror has the knowledge and background to make determinations in medical cases. I say that both as someone who has actually served on a jury, and someone who works with medical researchers. I have a greater than average knowledge of medicine, yet I would hesistate to say I’d be able to distinguish malpractice from bad luck in all instances.

But why is this materially different than any of the countless technical issues a jury is often asked to consider and opine upon, using the testimony of experts? Jurors tend not to be experts on DNA or fingerprints or contract law or lots of things. But they can consider the testimony of experts and decide who has presented the best evidence.

The fact that doctors can disagree over a given case is no different than the disagreement that occurs in courtrooms everyday between experts, IMO.

[JohnBckWLD]

Until the monopoly lawyers have over our political system, medical malpractice reform (or any other type of tort reform) will never see the light of day.

Can I prove that? No.

But it appears we’re going in the wrong direction when last week Circuit Judge J. Leonard Fleet ruled that Adam Riff of Florida can move forward with his lawsuit against Welleby Veterinary Medical for emotional damages caused of the loss of his 11 year old dog, Lucky.

[Broomstick]

*Originally posted by Bob Cos *
But why is this materially different than any of the countless technical issues a jury is often asked to consider and opine upon, using the testimony of experts? Jurors tend not to be experts on DNA or fingerprints or contract law or lots of things. But they can consider the testimony of experts and decide who has presented the best evidence.

Actually, I think there are a number of areas of techology where the jury system doesn’t work well, although medicine is slightly different from even most of those.

See, the jury system came about in a time and place when and where the sort of techonology we have now didn’t exist. When farmer Brown was accused of stealing Farmer Jones’ cow, and said cow was found in farmer Brown’s possession… well, that didn’t require technical experts to explain, did it?

At least fingerprints are a technology most folks have heard about - they know everyone’s print is unique, they understand that prints can be fragmentary or smeared or otherwise unusable for identification, and so forth. DNA is more problematic - both for use and for explanation.

As an example of a non-medical area where I don’t think the jury system and the joint-and-several-liability thing doesn’t work well is aviation. MOST people don’t understand aviation, or how it’s different than driving a car (which is what most people seem to want to compare it to), and since both pilots and aviation-related companies are perceived as “deep pockets” the jury awards can get quite steep. So steep, in fact, that in 1986 all manufacturing of certified single-engine piston planes ceased in the United States. It did not resume until Congress passed some liability reform for the industry.

Medicine is equally, if not more complex. However, there is one important difference between medicine and, say, aviation or automobile manufacturing or space launches. In everything except medicine, if someone is maimed or dies then something obviously went Very Wrong. In medicine, however, you can do everything correctly and still wind up with a corpse in the morgue. Unlike any other high-tech endeavor, death is not, in and of itself, a proof of wrong-doing. But the average person is so used to thinking that injury or death is the result of wrong-doing that I think it can be very very difficult for said person to wrap his or her brain around the idea that, despite the bad outcome, nothing wrong was done.

What’s the solution? I don’t know. I do have a fondness for the jury system and I think in many instances it DOES work as it’s supposed to. But maybe in some areas it’s not the best solution. Or maybe we need some sort of pool of people with knowledge in an area from which to draw juors - as it stands now, during jury selection lawyers try to eliminate people from the panel that might know a great deal about a subject. Or we get into conflict of interest problems (which is why lawyers are not permitted to serve on juries). But when the point of contention is of a highly technical nature I’m not convinced that pulling 12 citizens at random (after filtering through lawyers to make sure no one is too much an expert) off the street is the best way to determine innocence or guilt.