Email Article Print Article

One Doctor's Response to the Phony Medical Malpractice Crisis Newsletter

By Rob Lambert - Email Editor

Date : May 29, 2008

Dear Valued Reader,

The last newsletter By Randall Edwards generated so many furious comments from readers that I thought it was appropriate to have Doctor Mike Sinclair have a chance to counter Randall’s points. Enjoy."

Rob Lambert

I have reviewed Mr. Randall Edwards’ article entitled "The Phony Medical Malpractice Lawsuit Crisis". I have also read many of the responses that he has posted on this forum. I usually find his answers to be intelligent and filled with common sense. In this case, I find his analysis to be "faulty" at best. The phrase I would have preferred to use instead of "faulty" would not be appropriate for a distinguished forum like this one.

There are many statements within his analysis that are simply wrong. There are others that need to be challenged. But his biggest departure from reality is his perception that a lawsuit is a business transaction where two parties disagree and choose to settle their disagreement in a civilized manner. I feel certain that Mr. Edwards views a lawsuit as just that...a civilized forum where parties can settle a disagreement.

For a physician, the act of receiving a notice of intent to file suit for medical malpractice has the same emotional impact as finding out that your routine annual check up shows that you have cancer. Your entire life as you know it is stopped dead in its tracks. The feeling is completely devastating. The emotions are the same as if somebody told you that you are going to have to spend the next few years fighting for your life or you will die. In fact it is even worse than that. If you don't win this fight, this fight that you cannot back out of, this fight that you did not ask for, not only will you die, but so will your family. For doctors that have been sued, I don't need to describe this situation any further, they already know exactly what I am talking about. But for Mr. Edwards, no description is sufficient. He will never understand how awful it feels to be sued for medical malpractice.

Now let's take a look at his opinion, piece by piece and try to shed some light on his analysis.

"From what I’ve been able to ascertain, the so-called "malpractice lawsuit crisis" is a lie from start to finish. It’s a red herring, manufactured by the insurance industry to deflect the blame for bad investment decisions on trial lawyers and their clients – the victims of medical malpractice."

The above statement seems to imply that the insurance companies were having a crisis and they needed a way to solve the crisis. That is not even remotely accurate. First, what is a malpractice lawsuit crisis? A malpractice lawsuit crisis has a few parts. Like most things, the cost of malpractice insurance is based on the laws of supply and demand.

Insurance companies were getting clobbered with so many suits that they could no longer afford to offer malpractice insurance. Their solution was pretty easy...stop selling malpractice insurance. When any company has a product or service that is not profitable, they stop offering that product or service. When many insurance companies stopped offering it, the supply went down, so the price went up. The insurance companies that were still selling medical malpractice insurance can't just sell unlimited quantities.

They are required to limit their sales based on the amount of money they have in reserves. Since they could not sell all they wanted to sell, what little was left became very expensive. The problem is that doctors can't pass the increased costs to their customers because their rates are fixed by Medicare and the health insurance companies. The last year that I had malpractice insurance, my cost was $8,000 per year. The next year it would have cost $40,000, and I have never been sued. I don't have the opportunity to increase my fees to cover that cost. All I can do is see more patients in less time, which increases the risks of mistakes. So I didn't buy any medical malpractice insurance. In other states, where doctors must buy insurance, they either went out of business, made less money, or saw more patients in less time. More patients in less time equals more mistakes which leads to patient injury. Even worse, less doctors in business equals less available health care which in turn causes more patient injury. The point is, the insurance companies did not have a crisis that needed fixing. The patients and doctors had (and have) a crisis, and it is getting worse.

"I have never represented a medical malpractice plaintiff whose claims I thought to be absolutely without merit. I don’t think there are a lot of lawyers who do."

That is a pile of idealistic rubbish. The patients have a bad outcome, so they are mad. They open the phone book to find a lawyer. They don't even have to find a medical malpractice lawyer...any lawyer will do. This lawyer reviews the case and then opens his book of lawyers that he knows personally. If he thinks it is a good case (worth a few million dollars), he calls Mr. Randall Edwards who now owes him a big fat referral fee. If he thinks it is a crappy, frivolous case, he calls one of several well known ambulance chasing, scum bucket lawyers who will extort the insurance company into paying a mere $50,000 to avoid the cost of the litigation.

Now the referring lawyer gets a nice little referral fee. If the patient sees Mr. Edwards first, and is told he has a crappy case, he keeps looking until he finds an ambulance chasing, scum bucket lawyer on his own. Is it any wonder that Mr. Edwards can say all of his cases have merit?

"Medical malpractice claims are expensive to bring. They require a good deal of medical knowledge on the part of the lawyer, an investment in finding and paying for medical experts who are willing to testify, and a commitment to taking a case all the way to trial. A medical malpractice lawyer knows at the outset that his case will be hard-fought by the doctor's insurance company."

Wrong, wrong and wrong. It costs almost nothing to "bring" a frivolous medical malpractice suit. The scum bucket lawyer dictates an affidavit in about 10 minutes (cost, $20), pays one of his regular scum bucket, expert medical doctors that specialize in signing affidavits to sign it (cost, $500) and then sends the intent to sue by certified mail to the doctor to ruin his day, and maybe his life (cost, $20). He now has the opportunity to talk about settling with the insurance company for the policy limits (cost, Priceless!). At anytime, he can drop the case with almost no chance of being held responsible for his actions. If he wants to raise the jackpot, the scum bucket lawyer can have his paralegals run up a bill for the insurance company by filing motions, demanding depositions, demanding interrogatories, and adding other doctors to the lawsuit because their names were also on the chart. The insurance company has a choice of paying hundreds of thousands of dollars to defend their doctor, or paying $50,000 to make the scum bucket lawyer go away. There is NO obligation for the insurance company to put up an expensive fight to defend a frivolous suit. After all, this is just a business transaction....grrrr.

As far as his examples of true malpractice are concerned, lets look at number three...

"The patient who underwent a routine laparoscopic gall bladder removal who ended up on life support for nearly two months with Adult Respiratory Distress Syndrome after her surgeon, who, unknown to the patient, was suffering from multiple sclerosis at the time, nicked her bowel during the procedure. "

I defy Mr. Edwards, or any other lawyer to name any good general surgeon who has never nicked the bowel during surgery. Nobody is perfect. Every good surgeon occasionally nicks the bowel during surgery. A few of those patients have terrible outcomes. Those are the facts of life and surgery. On the other hand, how much would you like to bet that most lawyers would try to make it sound like the doctor's personal history of multiple sclerosis made this complication a heinous crime in order to sway the jury?

Remember, a lawyer’s job is NOT to find the truth, their job is to persuade. Their job is to zealously promote their client's position. If the truth gets in the way, they work around it. That is their job.

"The list goes on and on. Were these claims a part of some "lawsuit lottery?" The answer...is no. The motivation behind medical malpractice lawsuits is to seek remedies for medical malpractice, plain and simple."

Wrong again. Those cases ARE part of a lawsuit lottery, but not for the patients...for the lawyer. The patients had terrible outcomes. Insurance should help compensate them. But there is no justification for the lawyer's compensation to be proportional to the compensation of their clients. If the lawyer is entitled to 40% of what it takes to compensate a client, then the client is only getting 60% of what they deserve. If a lawyer is entitled to 40% of what it takes to compensate the client, then I should be entitled to 40% of the earning potential of every patient whose life I save. If a dermatologist takes a mole off of a lawyer, and it turns out to be a malignant melanoma (which would surely kill the lawyer if left untreated), would the lawyer feel obliged to send the dermatologist 40% of what the lawyer makes for the rest of his life? No?? Is that because the lawyer paid the dermatologist his fee to remove the lesion? Then why should a lawyer be entitled to anything above a reasonable hourly fee? Is a lawyer entitled to 40% because not all clients can pay $500 per hour? Then why is the dermatologist not entitled to his 40%? Not all of his patients can afford his services either, but he is expected to eat that cost even though he NEVER gets a chance to win a "health care lottery". There is no question that these lawsuits are part of a "lawsuit lottery" that benefits the lawyers.

"Did compensating these patients for their injuries add to the cost of your health care? The answer...is no."

This might be the only point Mr. Edwards was partially correct. It wasn't the patient's compensation that causes health care costs to go up, it is the cost of defensive medicine that causes the cost of health care to sky rocket. Every doctor who knows he may be sued for a bad outcome will want to cover every possible scenario, every possible diagnostic option, no matter how unlikely. If there is a test that I can order that has a 50/50 chance of saving a life, or preventing harm, then it is highly likely that I will order that test. But what if the odds are only 1%? Can I afford to be wrong 1% of the time? How about 1 in a 1,000? I see 12,000 patients per year. Can I afford to be wrong 12 times per year? How about 1 in 100,000? Can I ever afford to be part of this scum bucket lawsuit lottery? NO! That is what adds to the cost of health care.

"Insurance companies would have you believe that runaway juries, sympathetic to anyone who can hobble into the courtroom with a legal complaint in one hand and a cane in the other, will award millions at the drop of a hat."

This argument is just plain dumb. Doctors don't have millions of dollars of coverage. In my state, $250,000 per claim is what most doctors (who still have insurance) have for coverage. Any amount of award over the policy limit does not bother the insurance companies one darn bit. Massive awards are not a problem for insurance companies. Massive awards are a problem for the doctors.

"Due to various protections in the litigation system itself, the fact of the matter is that very few medical malpractice claims ever get to court. If they don't have merit, they are generally dismissed in a summary proceeding long before a jury could ever get a peek at them..."

What about the damage to the doctor that has occurred from all of those initial proceedings? What about the damage from having patients witness the sheriff come into the waiting room and demand to hand the lawsuit papers directly to the doctor? What about the time out of the office to prepare the defense? What about the damage that is done to the practice when the filing of the lawsuit makes the front page of the local newspaper, but the dropping of the lawsuit barely gets a footnote, if it gets mentioned at all? How does the doctor get compensated for all that? He doesn't get compensated at all. That is why doctors practice defensive medicine.

"...if, by some fluke, an outrageous award were to be given by a jury, a judge or an appellate court can always overturn such an award."

This comment shows a complete lack of knowledge of reality. How long does the doctor's life get put on hold while this multi-million dollar judgment hangs like a guillotine over his head? The cost to the doctor in emotional distress is enormous. The damage to his personal life may never be repaired. Yet Mr. Edwards thinks this is no big deal. This comment alone is so bad it makes me question if he has any sense of reality at all.

"Surprisingly, in the vast majority of states that have adopted draconian regulations on medical malpractice claims, malpractice premiums have actually increased,..."

Draconian regulations? I suppose he must be referring to the requirement that the lawyer has to find a doctor that agrees there was malpractice before he can start the extortion. As if paying one of his hired guns (aka paid whores) to sign an affidavit was somehow a deterrent to the filing of a frivolous lawsuit. Of course the malpractice premiums have gone up. The "draconian" regulations are a joke, not a deterrent.

"Instead, the majority of Asset Protection issues I’ve seen that involve physicians stem from matters that they have complete control over. They arise generally out of three things: First, a partnership or some other medical business arrangement gone bad – usually with other doctors, by the way; Second, a marriage gone bad; and Third, some other business (non-medical) gone bad."

Apparently he has decided that since doctors make lousy business people and lousy spouses, we should just shut up about the medical malpractice crisis. Perhaps if we weren't so terrified of getting sued, we could spend more time with our spouses and have more time to make better investments. Nevertheless, his point is irrelevant. The malpractice lawsuit crisis is real and needs to get fixed no matter what else is going on.

Now lets look at the basic premise that most medical malpractice lawsuits, according to Mr. Edwards, have merit. If that were so, then why is it that most lawsuits that are filed never make it to a trial? Why is it that most medical malpractice lawsuits that do make it to trial go in favor of the doctors? Is he suggesting that juries just don't understand the merits of medical malpractice cases? Is that why 80% of the medical malpractice trials find no medical malpractice, i.e. they were frivolous?? Perhaps he is suggesting that lawyers that provide defense for medical malpractice cases are much better lawyers than the lawyers that represent the patients? If that were so, then why are the defense lawyers making so much less money than the plaintiff's lawyers? The obvious answer is that it is hard to win a frivolous case. And most of the cases are indeed frivolous.

I don't expect Mr. Edwards, or any other malpractice lawyer to understand the medical malpractice lawsuit crisis from the doctor's point of view. What I do expect him to understand is that patients are already being injured by the lack of tort reform. In Florida we have a new law that says if a doctor has "3 strikes" against him, he will lose his license. Until the Supreme Court rules on a case, we don't even know what "3 strikes" means. While we are waiting, the doctors are refusing to treat difficult cases because any bad outcome might lead to 1 or more strikes.

Specialists such as hand surgeons are refusing to be on call for the emergency room. If a patient in Florida has a traumatic injury to the hand, it might be days (not hours) before an available hand surgeon will accept him as a patient. In Texas, where tort reform is helping to resolve the medical malpractice lawsuit crisis, there is now a backlog of well qualified physicians who wish to obtain their medical license, including hand surgeons. If Mr. Edwards ever injures his hand, I hope for his sake he is in Texas where he has a 99% of getting great medical care and a less than a 1% chance of getting botched medical care. If he happens to injure his hand in Florida, I hope he takes great comfort in knowing that he has the right to sue any doctor that tries to help him, while he watches his hand rot off the end of his arm.

Michael J. Sinclair, MD
www.epilution.com

Have a healthy and protected week.

Rob Lambert

RELATED ARTICLES:

• Managing Asset Protection Offshore
• Making the Most Out of Hedge Funds That Drive Success
• Working Your Portfolio to Being Green
• Finding Better Ways to Manage Your Money