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 the Maya case, which involved child protection authorities, a judge later lowered the damages against Johns Hopkins All Children’s Hospital by $47.5 million.
A federal judge in October, for example, rejected a record $110 million medical malpractice award in Minnesota, reducing it to $10 million. The district judge ruled the award was “shockingly excessive” and that the plaintiff should either accept the $10 million award or retry the case.
After a verdict is awarded, the defendant typically challenges the award, and the case goes through the appellate pipeline, Mr. Henderson explained. A judge may reduce some elements of the verdict, he said, but more often, the plaintiff and defendant agree on a compromised figure.
Seattle medical liability defense attorney Jennifer Crisera has experienced this firsthand. She recalled a recent case where a plaintiff’s attorney demanded what she describes as an unreasonable amount to settle a claim. Ms. Crisera did not want to give exact numbers but said the plaintiff made an 8-figure demand and the defense offered a low 7-figure range.
“My impression was that plaintiff’s counsel believed that they could get a nuclear verdict from the jury, so they kept their settlement demand artificially high,” she said. “The division between the numbers was way too high. Ultimately, we had to let a jury decide the value.”
The plaintiff won the case, and the verdict was much less than the settlement demand, she said. Even so, the defense incurred trial costs, and the health provider was forced to endure the emotional stress of a trial that could have been avoided, Ms. Crisera said.
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, Mr. White said.
Medical liability insurance premiums for physicians have steadily increased since 2019, according to data from the Medical Liability Monitor, a national publication that analyzes liability insurance premiums. The Monitor studies insurance premium data from insurers that cover internists, general surgeons, and obstetrician-gynecologists.
From 2019 to 2023, average premium rates for physicians increased between 1.1% and 3% each year in states without patient compensation funds, according to Monitor data.
“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 for the Medical Liability Monitor. “Responses to this year’s rate survey questionnaire indicate that most responding companies have experienced an increase in claims greater than $1 million and claims greater than $5 million during the past 2 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. Premiums for Montgomery County general surgeons rose by 11.9% from 2022 to 2023, from $30,761 to $34,426, according to survey data.
In several counties in Illinois (Adams, Knox, Peoria, and Rock Island), premiums for some internists rose by 15% from $24,041 to $27,783, and premiums for some surgeons increased by 27% from $60,202 to $76,461, according to survey data. Some internists in Catoosa County, Georgia, meanwhile, paid $17,831 in 2023, up from $16,313 in 2022. Some surgeons in Catoosa County paid $65,616 in 2023, up from $60,032 in 2022. Inflation could be one factor behind higher liability premium rates. Claim severity is a key driver of higher premium rates, Mr. White added.
“We have not seen stability in claims severity,” he said. “It is continuing to go up and, in all likelihood, it will drive [premium] rates up further from this point.”
A version of this article appeared on Medscape.com.