People’s perspective of what is a lot of money continues to escalate. How much is enough? How much is too much? Never has this lottery mentality been more on display than in recent jury awards related to healthcare lawsuits. While the frequency of healthcare professional liability claims may have stabilized or even shown slight declines, the increased severity of such claims has been staggering.
What has driven up the monetary values of plaintiff cases? Some speculate that news media coverage and social media, coupled with social inflation have desensitized the average person to the value of money. People everywhere have access to news – big money news. Regular reports of the exorbitant earnings of celebrities and professional athletes and enormous lottery winnings have helped to the lay groundwork for a skewed perception of what is or isn’t a lot of money. Furthermore, whereas jury verdicts have not in the past been so well publicized, the average person now may hear of jury verdicts awarded in all parts of the country. As a result of this widespread exposure, there are no longer obvious distinctions between rural or urban-based cases nor conservative or more liberal juries, which used to be the norm. What’s more, the publicized jury verdicts tend to be the most extreme. Frequent reports of similarly large verdicts may have the effect of setting a dangerous precedent for a potential future juror as to what would constitute a reasonable award. With repetition in reporting, these awards appear less like outliers and more like the norm.
Increased media coverage also plays a role in stirring outrage and bias against certain professionals. For instance, the current media coverage surrounding the opioid epidemic, talc claims, alleged price fixing and other matters have stimulated enough anger that it may be difficult for some to be unbiased in deliberations against a pharmaceutical company. Political influences may be another factor. With continued debate over affordable, accessible healthcare and health insurance coverage, many potential jurors have become more predisposed to bring bias or outrage toward healthcare providers and insurance companies into their deliberations. Biased or outraged juries are more likely to award damages that look more like punitive damages than true compensatory damages. Whatever the reasons, medical and legal professionals have expressed the concern that in today’s environment, it is difficult to get a balanced, reasoned jury.
Claims severity also can be aligned with the increase in ‘batch claims’ where multiple, related claims are tied to the same event, incident or medical product defect. Batch claims have become more prevalent given an aggressive plaintiffs’ bar eager to seize on alleged systemic risks at healthcare institutions to increase the likelihood of a high jury award or settlement and the enormous plaintiff attorney fees associated with such claims.
The severity of healthcare liability claims has also been impacted by and resulted in an increase in average defense costs. With the increase in frequency of extreme verdicts and larger settlements, there has been more frequent use of mock trials or focus groups, panels of experts, multiple mediations and multiple law firms to collaborate in the defense.Likewise, this increase in severity has also impacted the cost to Insurers to manage claims. For instance, whereas an excess insurance writer may have been minimally involved in litigation and negotiation strategy in the past, increased potential for exposure to excess insurance has prompted them to become more actively involved. As a result of the increased exposure to indemnity, defense and expense, for healthcare liability insurers, pressure on rates has become unavoidable.
The trend toward high severity claims and exorbitant jury awards is likely to continue. In today’s increasingly litigious era, there has been a seismic behavioral transference in believability or burden of proof in the court of public opinion against institutions, healthcare systems and medical professionals. Healthcare professional liability insurers will be challenged to balance pricing with exposure to anticipated inflated severity of risk.
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