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| Shapiro, Appleton & Washburn

A Milwaukee Journal Sentinel report found that medical malpractice lawsuits in Wisconsin have plummeted while the state’s malpractice insurance fund ballooned.  Medical malpractice filings have decreased more than 50% since 1999, but the Injured Patients and Families Compensation Fund, into which health care professionals must pay, increased from $501 million to $1.15 billion in the same time period. This is more than it has paid out in its entire 39-year existence.

Wisconsin caps non-economic damages such as pain and suffering at $750,000 in a medical malpractice case and $500,000 in a wrongful death case. Punitive damages are banned altogether in medical malpractice cases. Furthermore, if the doctor is a state employee, total damages are capped at $250,000. In light of these laws, many lawyers in Wisconsin have stopped taking medical malpractice cases in the past 10 years because they are expensive to pursue and the chances of winning have become very slim. Lawyers say huge success rates for defendants coupled with capped damages remove an insurance company’s incentive to settle.  Considering a lawyer only recoups the cost of a lawsuit if he settles the case or there is a verdict for the client, it’s understandable that lawyers are deciding medical malpractice suits are not worth the risk to their business.

The MJS obtained a survey from PIAA, an insurance industry trade organization, reporting that  nationwide, defendants won 94.47% of cases that went to verdict between 2008 and 2012. Clearly the odds are overwhelmingly in insurance companies’ favor.

Health care industry advocates say the decrease in claims means doctors and hospitals are making fewer mistakes, but National Practitioner Data Bank (NPDB) statistics show that adverse actions across the country have increased from 25,107 in 2003 to 39,519 in 2013, suggesting that if anything, doctors and hospitals are making more mistakes.Healthcare consumers and patients take the brunt of the legal changes, mistakes keep occurring, but competent attorneys may not be willing to take the risk to represent patients hurt by malpractice.

Is Virginia destined for the same fate?

The road to recovery for plaintiffs in Virginia is rocky. NPDB statistics show adverse actions rose from 848 in 2003 to 1,416 in 2013, yet the number of medical malpractice payments dropped by 24% and the amount of payments adjusted for inflation decreased in the same period. To me, this shows there are more mistakes every year, fewer people are being compensated for those mistakes, and the ones who are compensated are being paid less.  What a great recipe though for insurance companies and hospitals—reduce your legal liability, increase your profitability, and keep claiming that there is a massive medical malpractice crisis with runaway juries!

Our firm is very familiar with Virginia medical malpractice damages and we write about it frequently. Virginia doesn’t have a state-run insurance fund like Wisconsin’s. If a Wisconsin plaintiff receives a verdict that exceeds $1 million, its insurance fund pays the excess, so the plaintiff still receives the full award. Here, the verdict amount in excess of the cap is simply reduced.

Wisconsin lawyers say the insurance fund pushes cases to trial because the risk to defendants is so low, whereas other states see more settlements out of fear of “the big verdict”. Unfortunately, Virginia has the worst of both worlds: insurance companies don’t have an incentive to settle because their maximum liability is still relatively low, currently the ceiling for newly arising cases is $2.15 million, but even if a jury awards a “big verdict”, plaintiffs can’t collect more than the ceiling and the jury is not even told that this is the law.


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