No ‘jackpot verdicts’

OLYMPIA – Despite doctors’ complaints of “jackpot verdicts,” a study released Tuesday by Washington Insurance Commissioner Mike Kreidler found no big spike in malpractice settlements, verdicts or claims.

“We expected to see some extraordinary claims, high dollar amounts. We expected lots of plaintiffs’ judgments,” said Beth Berendt, deputy commissioner for rates and forms. “And it just wasn’t there.”

She and the study’s authors, however, acknowledged that there are large holes in the data. For one thing, insurers for some of the riskiest medical specialties weren’t included. Nor were medical providers who “self-insure,” like the University of Washington Medical Center or Group Health Cooperative.

“I would take this survey with not a grain of salt, but a boulder of salt,” said state medical association CEO Tom Curry, who called the study “deeply flawed.”

“It’s a reminder that the only thing worse than no data is bad data,” he said.

The study came as doctors’ and lawyers’ groups are battling over competing ballot measures to reform medical malpractice laws. Doctor-backed Initiative 330 includes a controversial $350,000 cap on payments for “non-economic damages” like pain and suffering. Lawyer-backed Initiative 336 includes a three-strikes-you’re-out provision to yank the medical licenses of physicians with repeated malpractice judgments against them.

The sharp-elbowed campaign is already the most expensive initiative clash in state history. In campaign ads, the trial lawyers are highlighting heart-rending medical errors. The doctors’ side is using slogans like “help bring the lying lawyers to justice” and running TV commercials showing actor-lawyers grinningly pocketing fat wads of settlement cash.

“There’s certainly nothing in (the report) that substantiates a medical malpractice crisis,” said Barbara Flye, chairwoman of the No on I-330 campaign. Sure, there are data limitations, she said, but that’s because the insurance industry has stymied Kreidler’s repeated attempts to force more disclosure from high-risk insurers and others.

There is no evidence of “jackpot” settlements for people injured by medical negligence, she said.

“In fact, quite the opposite,” she said. “The only jackpot winner in this whole Initiative 300 fight is the insurance industry.”

Curry said that the study’s most worrisome finding was that among the companies who provided data, nearly half of their legal defense costs were spent on claims that were dropped, thrown out of court by a judge, or rejected by a jury. In one recently closed case, he said, a doctor was vindicated after nearly a decade in court and $989,000 in legal expenses for the doctor’s insurer.

“These things do add up,” Curry said.

The result of such cases, he said, are ever-higher malpractice insurance costs and fewer available doctors. In the last 41/2 years, he said, the number of OB-GYNs and family physicians insured by the state’s largest malpractice insurer, Physicians Insurance, has decreased by nearly one-third.

The study found that the average malpractice-claim payment has risen in the past year from $220,623 to $225,296. But it also showed that the percentage of successful claims had dropped from 29.5 percent last year to 27.7 percent this year.

Large malpractice payouts aren’t the sole reason behind high malpractice insurance costs, Curry said, but they “create an updraft effect,” leading attorneys to push for larger and larger settlements.

After spiking last year, malpractice insurance rates dropped this year at Physicians Insurance, according to rate data provided by Kreidler’s office. In fact, some specialties – gynecologist/surgeons, vascular surgeons, anesthesiologists, opthamologists – pay less in inflation-adjusted dollars for insurance now than they paid 20 years ago.

“It tends to be a cyclical business,” said Lisa Smego, the property casualty manager in Kreidler’s office. She cited a similar rate spike in the 1980s. “Chances are we’re in a softening period now.”

Curry’s response: “They will say that there’s no crisis and that this is a cyclical phenomenon,” he said, “but what it really is is a pause in an ever-higher spiral.”