Respectful Insolence

A sign of the times

One of the annoyances of becoming an attending is the need to sign up for managed care and insurance plans. The forms are all similar, but they are sufficiently different that you can’t just fill one out and be done with it. Every couple of years, a flood of paperwork comes through, asking for renewal. One disadvantage of working for a state institution is that I don’t have much say over what plans I have to sign up for. My cancer institute makes the deals and then distributes the applications. However, one advantage is that there is an office that fills out a lot of the simple “busy work” parts of this pile of applications. I supply the office with my CV and some information about my educational background, and then they send me the forms with most of the information filled out. However, one thing that I always have to fill out is a series of questions about my past, such as whether I’ve ever been disciplined by medical boards, had to reliquish hospital privileges, been convicted of anything worse than traffic violations, etc.

One question that is inevitable is whether or not I had ever been sued. The question usually asked (1) whether I had been sued in the last three to five years (the exact time depending upon the company) or (2) whether I had ever settled a case out of court. If the answer was “yes,” then inevitably would follow the request for full details of the case. Last week, I was filling out one of these forms, when I came across the usual question, but its form was vastly different than what I remembered from previous applications in the late 1990’s and early 2000’s.

Has there been, within the past five years, more than one malpractice judgment found against you or malpractice settlement made, with or without prejudice, in excess of $50,000?

Notice the difference. The insurance company no longer asks if you’ve been sued. It only asks if you’ve lost or settled more than one malpractice suit for more than $50,000 in the last five years. The assumption is clearly that many good physicians will not only have been sued in the last five years, but will have lost or settled one case for more than $50,000!

In fact, I have noticed this trend over the last several years. The malpractice questions on these forms seem to be getting less and less restrictive. I first noticed three or four years ago that most forms no longer asked just whether the applicant had been sued or not, but rather whether he or she had lost or settled a suit within the last five years. Then, a couple of years ago it progressed to such forms asking whether the physician had lost or settled more than one suit in the last five years.

Now they don’t seem to care about even that anymore. This insurance company, at least, only seems to care whether the physician applicant has lost or settled more than one big malpractice case in the last five years. It doesn’t even ask if you’ve settled for smaller cases. You can conclude one of two things here. Either the insurance company in question is lowering its standards (unlikely, given the lock they have on physician reimbursement in the area), or so many physicians are being sued and being forced to settle that the insurance company made a business decision that it has no choice but to accept physicians who have lost or settled one or more malpractice cases in five years, particularly in high risk specialties. More telling, it has decided that it no longer cares whether a physician has settled multiple cases for less than $50,000 over the last five years. It only wants to know if an applicant has lost or settled for $50,000 more than once. (I’m guessing it they would be less likely to reject an obstetrician or a neurosurgeon who lost a $50,000 settlement than a pediatrician or family practice doctor.) True, not all insurance companies are so lenient. For example, another recredentialing package I just dealt with asked simply if I had paid any malpractice settlement in the last three years. Even so, a few years ago, theses companies would have been asking me if I had ever been sued at all (regardless of winning, losing, or settling), and they would have wanted to know my history not in the last three years but in the last five to seven.

It’s a sign of the times.

Comments

  1. #1 Katie
    May 8, 2006

    Sigh. Although I am not a physician, you have my sympathy. Sadly, I think things will get worse before then get better. Or will it get better???

  2. #2 AndyD
    May 8, 2006

    That’s actually quite worrying.

    Formerly, it must have been a case that a person who was sued in the past was more likely to be sued in the future, i.e. the number of lawsuits was a good indicator of competence (or at least error-proneness).

    If that is less and less the case – i.e. doctors get sued every time that is a less than perfect outcome – then you have a much harder time sorting out the good from the bad. It simply becomes a lottery..

  3. #3 Ivan
    May 8, 2006

    Orac- I am totally sympathetic to the burden that nuisance suits put on MDs, but I am not clear as to what the solution is. My understanding is that:
    1. Many suits have no basis
    2. Many people who have suffered from malpractice don’t sue.
    3. Medical error is a huge health risk that isn’t properly addressed by the medical profession.
    Am I wrong in those three points, and what is the solution?
    Has your department changed it’s approach in recent years to help future MDs better learn from their mistakes.

    And while I am on a rant, wouldn’t it be better to let residents get some sleep instead of subjecting them to conditions that literally make them stupider?

    Ivan

  4. #4 Barry
    May 8, 2006

    At my hospital, the first restrictions on resident hours were made insurance companies, AFAIK. They capped their malpractice insurance to 80hrs/week; apparently figuring that insuring fatigue-drugged zombies was a bad deal.

  5. #5 Lord Runolfr
    May 8, 2006

    I wonder if your profession isn’t being “punished” for its own success. Medical treatment has become so good with modern technology that even people with severe medical conditions go to the doctor with a presumption that their conditions will be cured, and they are inclined to sue if they don’t get better simply because of their high expectations.

  6. #6 Walter E. Wallis, P.E.
    May 8, 2006

    Have hope – Engineering Errors and Omissions insurance went through the roof a decade ago, but we got a law requiring a professional finding of error before the suit could go forward.

  7. #7 Eh Nonymous
    May 8, 2006

    I think this is a plain misreading of the facts.

    There has been a substantial change in the intelligence with which the insurers are asking questions.

    I’ve heard the old one about how X percent of all doctors are responsible for Y percent of all MMDV (multi-million dollar verdicts). Same goes for various specialties, high-risk procedures, etc. And surely, the same slicing goes for actual incidents of committed malpractice.

    You get some correct positives if you ask if they’ve been sued; you get closer to eliminating false positives if you focus only on “negative outcomes” for the insurer; you narrow down to the true poor risks when you look only at the repeat losers.

    You’ll miss a few (false negatives) but you’ll also leave alone the many doctors who

    – haven’t been sued
    – have been sued but have never had a loss or settlement
    – have lost or settled but for less than X
    – did, but less than twice.

    It’s just smart insuring. This isn’t about worse lawyerism. It’s about superior insurance-side risk-avoidance.

    That’s my take, and I’m sticking by it.

  8. #8 M
    May 8, 2006

    The insurance form isn’t as indicative as you suppose; the presence of a given question on an insurance form doesn’t suggest anything about whether the insurer “cares,” as you put it, but rather if the answer can provide any meaningful information allowing the insurer to adjust its rates.

    All you know from the form is that sued-or-not-sued, and loses or settlements less than $50,000 no longer provide any meaningful indication of your likely future liability.

    $50,000 sounds like a good proxy for the typical nuisance suit settlement, where the insurance company settles it to avoid litigation costs. At $250 an hour, $50,000 is equal to only about 200 hours of legal work.

    Does the absence of the question about ever-sued-or-not mean insurers no longer find a doctor being sued to be relevant to future liability? Sure. But it’s hard to know what to make of that in terms of claims actually made, except that the existence of a previous suit is not as indicative of a future suit as it was.

    Have the laws changed in your state recently? The addition of heightened pleading standards, like certification by an expert, could account for the difference.

  9. #9 Deoxy
    May 8, 2006

    Eh Nonymous and M,

    I think you are ignoring a clear progression, as Orac laid out:

    -many years ago, you were “high risk” if you had been sued at all
    -several yaers ago, you were “high risk” if you had lost or settled
    -a few years ago, you were “high risk” if you had lost lost or settled more than once
    -now, you were “high risk” if you had lost lost or settled more than once AND it was over a certain amount

    Do you think they wouldn’t still be at the first of those if they could get enough doctors?

    That tells us that the predictive value of being sued is essentially ZERO. THAT is bad. It even tells us that settling or losing is not a useful indicator!

  10. #10 Ed Sodaro MD
    May 8, 2006

    This is clear evidence of the total collapse at any pretence of justice by the John Edwards-style multi-billion dollar Liablity Industry.

    The time is long past due for major reform of this utterly corrupt, parasitic, and unjust business.

  11. #11 Chris
    May 8, 2006

    Note that what the insurance companies are trying to predict is not the competence of the doctor, or the amount of malpractice committed by the doctor. They don’t care about those things.

    They only care how much money they will likely have to pay, in the future, because of malpractice suits against that doctor – with or without merit, it makes no difference to the insurance company; money spent settling or defeating (or losing!) a meritless suit is just as lost as money spent settling, defeating or losing a well-grounded one.

    The fact that past lawsuit performance is no longer a good indicator of future lawsuit *cost*, and/or there are so many small lawsuits that it isn’t useful to distinguish between doctors with a lot of them and doctors with few or none, does tell us something, but it’s not exactly clear what.

  12. #12 nolo
    May 8, 2006

    I’m amazed at how much information about the civil justice system can be derived from one poorly-worded question in a particular insurer’s questionnaire. I’m also amazed at how many perfectly intelligent doctors believe that there is a malpractice litigation “crisis,” and are perfectly happy to base their belief in the existence of such a crisis on purely anecdotal evidence.

  13. #13 Orac
    May 8, 2006

    I’m also amazed at how many perfectly intelligent doctors believe that there is a malpractice litigation “crisis,” and are perfectly happy to base their belief in the existence of such a crisis on purely anecdotal evidence.

    Straw man argument.

    I never stated there was a “crisis.” I pointed out that this observation of mine was a “sign of the times.” Nothing more.

  14. #14 M
    May 8, 2006

    “That tells us that the predictive value of being sued is essentially ZERO. THAT is bad. It even tells us that settling or losing is not a useful indicator!”

    No, it tells us that “being sued” and “losing/settling for less than $50,000″ are not a useful indicator for future claims.

    Which sounds logical to me. If you take the position that cases which settle for less than $50,000 are unjustified “nuisance” suits (which is the position of the insurance companies), and that “nuisance” suits have no connection to actual malpractice, then it stands to reason that nuisance suits are distributed among medical specialities more or less evenly.

    Which tells us that all the insurance company has recognized is “suffering a nuisance suit before is not a useful indicator of suffering a nuisance suit later.” Does this mean there are more nuisance suits? Maybe. It could also mean there are fewer doctors behaving in ways that attract nuisance suits. Or it could mean state laws have been changed to discourage nuisance suits to the point that they don’t impact the insurer’s bottom line.

    By the way, if you want a reality check about medical malpractice, come up with what you think the actual malpractice rate is. Then look up how many malpractice suits were filed in your state, and, if possible, how many survived dismissal to settle or prevail at trial.

  15. #15 buttfor2007
    May 8, 2006

    The request for a copy of the complaint as well as the results of the litigation is part of the accreditation standard of the HMO. Naturally, their accreditation agency depends entirely on their fees.

    http://www.ncqa.org/index.htm

    In 75% of case, the verdict is not guilty because the jury is not fooled. If the verdict of a medmal case was, “not guilty,” it serves no purpose for an insurance company to second guess the decision of a judge and jury sitting through 2 weeks of a trial. One may inform the HMO, their request violates res judicata (the finality of the outcome of a trial) and shows disrespect toward the court. The latter’s honor should be defended with punitive sanctions against the HMO. In one case, where that kind of language was used, credentials immediately came through without providing the demanded information.

  16. #16 Matt
    May 9, 2006

    How anyone who doesn’t work for the insurer reaches a conclusion about such a broad issue based on a single clause in an insurance application is beyond me.

    That’s like filling out a health insurance application and noticing they didn’t ask if you were HIV+ and then concluding they already assume you will be and thus they believe all people are intravenous drug users or are having unprotected sex frequently.

  17. #17 Matt
    May 9, 2006

    Couple questions:

    1. You said: “Either the insurance company in question is lowering its standards (unlikely, given the lock they have on physician reimbursement in the area)”

    Is this a health insurer or a malpractice insurer, and if it’s the latter, what do reimbursements have to do with it?

    2. Did they have another line where they asked for claims overall? It would seem silly just to ask for lawsuits, considering that you are just as likely, if not more, to have settled claims without a lawsuit as with one.

  18. #18 Deoxy
    May 9, 2006

    M,

    “No, it tells us that “being sued” and “losing/settling for less than $50,000″ are not a useful indicator for future claims.”
    “Which sounds logical to me. If you take the position that cases which settle for less than $50,000 are unjustified “nuisance” suits (which is the position of the insurance companies), and that “nuisance” suits have no connection to actual malpractice, then it stands to reason that nuisance suits are distributed among medical specialities more or less evenly.”

    So, money going out the door for “unjustified reasons is just peachy? THAT is what you’re saying “sound logical.”

    Basically, that’s theft. The current system allows this.

    And you’re just fine with that. Great.

    You both made my point AND depressd mee at the same time.

  19. #19 M
    May 9, 2006

    Deoxy, no need to be melodramatic. I never said that nuisance suits were “peachy.” I merely said that they were likely distributed evenly among doctors within a given specialty, which is why insurers don’t adjust premiums based on the number of previous nuisance suits a doctor has had.

    In case you believe otherwise, I don’t think nuisance suits are a good thing. But if you’re looking for me to sing the woes of a profitable insurance company, well, it’s not going to happen. In case you’re wondering, I don’t sympathize with lawyers who file nuisance claims, either.

    I’d rather remove the insurance companies and the lawyers from it altogether with a patient compensation fund. It’d be cheaper and more effective. But, hey, if your think doctors should have to cough up a third of their revenue to insurance companies while a substantial percent of injured patients go uncompensated, that’s your business.

  20. #20 doctordel
    May 10, 2006

    I may just be naive but I do not believe that we physicians have all bought into Nolo’s contention, which is that we agree the malpractice “crisis” is generated and/or defined by excessive litigation. We have been told this is the case by our malpractice providers but do we all truly think that med mal cases are bankrupting insurers? Is there evidence to suggest this is true?

    For me the malpractice crisis, as it were, is a practical concern. Malpractice cases happen. These cases are often without merit but they are often meritorious as well. Physicians need malpractice insurance. Insurance companies provide this coverage. If the insurance companies stop providing this product then we cannot practice medicine. I don’t like it but we are all to some degree at the mercy of the insurance companies and their lobbies. Unless we want to all go without med mal coverage, protect our assets as best we can, and hope for a career devoid of bad outcomes, we need these insurance companies and the injured need them too: if I was truly negligent and injured a young bread-winner in the prime of their life and with two children, I can promise that the plaintiffs could never get out of me what they could get from the insurance company-blood from a stone, ya know.

    I know Matt, Nolo and others see the insurers as the cold-hearted, money-grubbing, fairness-be-damned villians in this drama-and maybe they are-but how many judgements would be paid without them, if the defendant was responsible for the whole amount? I would guess that the numbers would likely not be sufficient to justify taking most cases; as Matt has pointed out before, even a $500,000 judgement is almost not worth pursuing from his standpoint.

    All most of us really want is to practice in a climate of fairness.

  21. #21 Matt
    May 10, 2006

    “I know Matt, Nolo and others see the insurers as the cold-hearted, money-grubbing, fairness-be-damned villians in this drama”

    That’s incorrect. I see them as entities who are designed to make money, and there is nothing good or bad in that. That’s the role of all companies that aren’t non-profits. What I object to is the legislating the risk out of the risk insurance business.

    I find a lot of irony in the fact that the post above this one on this site is about the “Skeptics Circle”. Orac appears to suspend all his skepticism when discussing legal issues.

  22. #22 Matt
    May 10, 2006

    “I know Matt, Nolo and others see the insurers as the cold-hearted, money-grubbing, fairness-be-damned villians in this drama”

    That’s incorrect. I see them as entities who are designed to make money, and there is nothing good or bad in that. That’s the role of all companies that aren’t non-profits. What I object to is the legislating the risk out of the risk insurance business.

    I find a lot of irony in the fact that the post above this one on this site is about the “Skeptics Circle”. Orac appears to suspend all his skepticism when discussing legal issues.

  23. #23 dr. charles
    May 11, 2006

    makes me sick.

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