Column: Risk Management

A Slanted Field

By: | August 29, 2017 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

I recently underwent a surgical procedure. At my pre-op appointment, I met with my surgeon and other supporting medical staff. Upon entering the room, the surgeon asked me: “How are you, Jennifer?” I worryingly answered: “Um. My name is Joanna.”

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The doctor hastily looked through his records, realized he had the wrong chart, the wrong sample labels, and likely was preparing for the wrong procedure. We all joked at the error, but I won’t lie, before they put me under, good risk management forced me to ask the anesthesiologist if he knew my name. “All will be ok, Joanna.” And it was.

It is a somewhat funny story, only funny as nothing went wrong. But for some people, this is not the case. Medical malpractice and errors happen. These errors can be devastating.

A 2011 study in the New England Journal of Medicine reported that 75 percent of physicians in “low-risk” specialties and virtually 100 percent of physicians in “high-risk” specialties could expect to face a malpractice claim during their careers, with 73 percent of those settled malpractice claims involving medical error.

These torts are real, people do suffer. A $250,000 damage limit feels wrong. It feels too low.

Every professional, myself included, obtains professional liability insurance to assist with costs of potential lawsuits that stem from our errors or misconduct. This is no different for doctors.

But for some reason, doctors appear to be receiving preferential consideration. The House recently passed medical tort reform legislation, Protecting Access to Care Act (H.R. 1215), intended to lower the cost of health insurance by 25 to 30 percent, according to the CBO, by lessening the burden of medical lawsuits. The bill caps non-economic damages such as punitive damages at $250,000 for medical malpractice.

This reform made me pause. How can we allow such discrimination between victims of medical malpractice and victims of other torts? Why handcuff our judicial system and limit a jury as to what they can award victims for non-economic damages – pain, suffering, diminished enjoyment of life?

These torts are real, people do suffer. A $250,000 damage limit feels wrong. It feels too low.

I think of the infamous McDonald’s hot coffee burn claim. In 1994 Stella Liebeck received $160,000 to cover medical expenses after suffering third degree burns for coffee split on her lap.

In addition, the jury felt it important to affect behaviors at McDonald’s when they learned that such burns where not unique to Liebeck. Allegedly 700 persons reported burns from their coffee over a decade only to be ignored.

The jury felt this safety hazard needed addressing. It awarded punitive damages equivalent to two days’ worth of coffee revenues at McDonald’s, which amounted to $2.7 million. The trial judge reduced the final verdict to $640,000. Nonetheless, McDonald’s heard the message and has since lowered the temperature of its coffee.

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Let’s not get duped into thinking that tort reform is needed to curtail greedy claimants and frivolous lawsuits. Punishment is intended to change bad behavior. Punishment has to be painful to truly deter repeated misconduct.

What would McDonald’s think of a $250,000 punishment? What is that — four hours’ worth of coffee sales?

We have to look at what these tort reforms are actually reforming: Insurance companies’ bottom lines, supported by predictable budgets and litigation outcome certainty.

But these kind of tort reforms also impact victims’ rights and liberties and judges’ ability to dispense justice. The biggest damage here is to democracy itself. What is that worth? &

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6 Risks for the Construction Industry

Drag and drop the tiles below to arrange them in your prefered order of most concerning risk (#1) to least concerning risk (#6). Then press "Submit Rankings" to see the summary results.

1
Shifting Workforce
2
Construction Defect
3
Contractual Risk
4
Overextension
5
Fire
6
Site Protection