Fairview Hospital vascular surgeon Daniel J. McLaughlin has never paid a settlement or damages in a lawsuit, yet his medical malpractice premiums rose from about $20,000 four years ago to $176,000 last year. In November, despite a ruling that a $30 million verdict was excessive, a local judge reinstated that award in a Cleveland medical malpractice case.
Are doctors leaving Northeast Ohio to practice where the business climate is more favorable? Should jury verdicts be capped through tort reform?
Yes, said panelists at a program entitled, “Medical Malpractice Insurance: Crisis or 
Hype?” The event was Tuesday, Nov. 16 at Baldwin-Wallace College. It was jointly sponsored by the B-W Health Care MBA Program, Baldwin-Wallace’s Buckhorn Endowed Chair in Economics, and the Healthcare Executives Association of Northeast Ohio (HEANO). Three of the four panelists - McLaughlin, a hospital executive and an insurance expert - said there is indeed a crisis, and tort reform is needed to provide relief.
Left to Right: Raymond J Marvar of Cleveland Clinic Health System - Western Region; vascular surgeon Daniel J. McLaughlin; Robert R. Ebert, B-W's Buckhorn Professor of Economics; attorney J. Michael Monteleone; Thomas S. Campanella, Director of the Health Care MBA Program at B-W; and Paul A. Greve Jr. of insurer Willis North America. They participated inthe Nov. 16 panel about Northeast Ohio's crisis in medical malpractice insurance.
But the fourth panelist, a lawyer who specializes in medical malpractice cases, said while he believes doctors are being “ripped off” by insurance companies, he retains his faith in the civil justice system. Juries - not state legislatures - should determine damages in cases of medical malpractice, said trial lawyer J. Michael Monteleone, president of the law firm Jeffries, Kube, Forrest & Monteleone.
Further, Monteleone suggested, doctors should do a better job in policing themselves. “I have tremendous respect for (the medical profession),” Monteleone said. “Those of us who live in Northeast Ohio are lucky to have as many good doctors as we do.” However, he added, as in any profession, there are some bad apples - a small percentage, yet the medical community does not do a good job in disciplining and rooting out those bad apples. “No one does anything about them except the civil justice system,” Monteleone said. “And when you don’t clean your own house, somebody else has to come in and do the work.”
Others on the panel expressed a different view of jury awards, noting that doctors in Northeast Ohio pay some of the highest medical malpractice premiums in the nation. Even in Columbus and Cincinnati, doctors pay lower premiums.
That’s because juries in Cleveland issue pricier verdicts, panelists said.
Raymond J. Marvar called recent verdicts“eyeball popping.” Marvar is vice president / general counsel of the Clinic System -Western Region, which includes Fairview, Lakewood and Lutheran Hospitals. Paul A. Greve Jr., senior vice president / senior consultant with the health care practice of international insurance brokerage Willis North America, said that for property/casualty insurers, only earthquake coverage is a more volatile product line than medical malpractice insurance.
“The problem, from the insurance industry perspective, has been the increased numbers of verdicts and settlements exceeding $1 million since the mid- to late- 1990s,” Greve said. “In a capitalistic system, whether we like it or not, the goal must be for the insurance companies to make a profit, or they will vote with their feet and exit the market.”
Four years ago, 30 insurance providers sold medical malpractice insurance in Ohio. Today, the field has narrowed to five companies. McLaughlin, who is medical director of the peripheral vascular lab at Fairview Hospital and also assistant program director for the general surgery residency program at the hospital, called for standardization of jury awards.
“If I lose my arm, it should be worth the same in Cincinnati . . . as it is in Cleveland,” he said. He noted with irony that Cleveland doctors pay higher premiums than elsewhere while its large hospital systems are consistently ranked among the best in the nation. “If we’re all that good, how can we be all that bad?” he asked. “Indiana has malpractice (premiums), at least in my field, one-tenth the cost of Cleveland, Ohio. With all due respect, we’re not 10 times as bad; they’re not 10 times as good.”
Marvar said doctors pay lower rates in Indiana, California, Wisconsin, Louisiana, Colorado and New Mexico because those states have implemented tort reforms such as capping non-economic damages - punitive or other monies juries can award beyond a plaintiff’s lost wages and cost of treatment.
Ohio has attempted tort reform. The Ohio Supreme Court struck down one statute on constitutional grounds - in a case brought by a client of Monteleone’s who was paralyzed during spinal surgery.
“You’re looking at the guy who got the Supreme Court in 1991 to throw out the last cap. That cap was $200,000,” Monteleone told his fellow panelists.
Marvar and McLaughlin said they expect the Ohio Supreme Court justices elected in November to view tort reform more favorably than past courts.
Monteleone said his firm declines to pursue 24 out of 25 malpractice accusations brought to it, but Marvar and McLaughlin said lawyers’ fees and frivolous claims drive up insurance costs.
McLaughlin said 70 percent of malpractice suits are dismissed and seven in 10 of the rest are found in favor of the physician. Marvar said when the plaintiff does win, just 28 cents of each dollar awarded goes to injured patients, while lawyers’ fees, depositions, expert witnesses and court costs gobble the rest. Marvar also said worthless claims - those eventually dismissed - cost an average of nearly $25,000 apiece to defend.
Beyond large jury awards, panelists cited other factors in soaring costs: “defensive medicine,” where doctors order more tests than necessary to avoid lawsuits; lower investment returns at insurance companies; and insurers’ failure to gauge the escalating loss trend in the 1990s.
Robert R. Ebert, B-W’s Buckhorn Professor of Economics, who spoke briefly at the beginning of the program, said the medical malpractice insurance crisis is particularly acute in Ohio.
“Will physicians and hospitals be able to maintain a consistently high level of care in the current malpractice environment?” Ebert asked. The crisis has not only medical and legal implications, but economic and political ramifications as well, he said.
Thomas S. Campanella, director of the Baldwin-Wallace College Health Care MBA program, was the program’s moderator and organizer.
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