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Another example of why we need malpractice reform

This story about an Illinois neurosurgeon points out perfectly why we need medical malpractice reform that includes caps on noneconomic damages (ie. “pain and suffering”). While the doctor did make a medical error, evidence was presented at the trial that the plaintiff was lying about the symptoms which supposedly resulted from the physician’s mistake. And still, the jury awarded the plaintiff more than 5 million dollars!

Unfortunately, the physician’s medical malpractice insurance would only cover him for 3 million, and the plaintiff’s attorney then went after his personal assets to try to get the rest. This resulted in the physician having to declare bankruptcy, and move to another state to practice as a hospital employee. His office staff wasn’t paid for many weeks during this debacle, and the whole thing took many years to resolve. And, all of it could’ve been prevented by a cap.

The defense succeeded in raising some doubt about the extent of Murphy’s pain, particularly his claim that he couldn’t sit for more than two hours at a time. Under cross-examination, he admitted that since the injury he’d made three fishing trips to Canada and a few driving trips to Florida, including one going straight through without stopping overnight. He’d also made a couple of trips to Las Vegas where he’d gambled for four or five hours without a break.

Murphy testified that his arm was so weak that he couldn’t lift more than 15 to 20 pounds. But the defense countered with a surveillance videotape that showed him lifting metal filing cabinets weighing as much as 45 pounds. The video’s effect, however, was apparently mixed. According to a post-trial poll of the jurors, some of them considered it an invasion of Murphy’s privacy.

Despite questions about the extent of Murphy’s injury, Rutkowski was apparently correct in wanting to settle the case. The trial ended with a verdict of $5.6 million against him and the radiologist—$2.6 million more than their combined coverage. Both doctors appealed, which required another lawyer (No. 3). Attempts at a post-trial settlement failed because the plaintiff’s attorney insisted on getting the entire amount of the verdict, even if that meant going after the doctors’ assets.

That’s a highly unusual quest in malpractice cases (see box above). In this case, however, it may have happened because the plaintiff and his attorney were angry at the insurer’s refusal to settle the case, or because they were convinced the case was “worth” the full amount of the jury’s verdict.

In August 2002, with the appeal pending, Rutkowski’s wife went to the bank one day and was shocked to discover that his corporate and personal assets had been frozen by court order, at the plaintiff’s request. The freeze blocked $100,000 in checks made out to cover current payroll, liability insurance premiums, and assorted office bills. Under the court order, Rutkowski had to provide Murphy’s attorney with copies of his bank statements, tax returns, investments, savings, insurance policies, leases, mortgages, and accounts receivable for the previous seven years. At that point, he hired an attorney to protect his assets (No. 4).

[…]

In June 2004, there was some good news for Rutkowski: The appellate court reversed the jury’s verdict—but only on narrow grounds. The appellate judges found sufficient evidence to support the jury’s finding of negligence, but found significant questions about the extent of Murphy’s disability. Noting that his claims of pain and suffering were largely subjective, they ruled that the trial judge should have allowed the defense to cross-examine the pain management specialist as to whether Murphy’s complaints could have been motivated by the prospect of a large judgment. The exclusion of that testimony, they concluded, warranted a new trial, but only on the amount of damages, not the doctors’ liability.

Rather than go back to court, the various parties agreed to try to resolve the case by submitting it to nonbinding mediation. Rutkowski was represented by several of his attorneys. The mediators proposed that the parties settle the case for $3 million, the amount of the two doctors’ combined policy limits. Everyone eventually agreed, although Rutkowski did so reluctantly because the agreement required him to drop his bad faith claim against ISMIE. But while the settlement freed his assets, and his personal bankruptcy has been resolved, his corporate bankruptcy is still pending because of a dispute over $27,000 in federal tax penalties. As a result, his legal bills continue.

Despite his Pyrrhic victory, Rutkowski was exhausted and soured by his lengthy ordeal. Like those of other neurosurgeons, his insurance premiums had soared during that period. In his case, they rose from $88,000 in 2001 to $246,000 in 2004, and tail coverage would cost him another nearly $500,000. “I just couldn’t afford it,” he says. In the fall of 2004, he moved to Greenville, MS, taking a job as an employee at a county hospital. He now receives a salary that’s “comparable” to what he formerly earned in Joliet, but he pays only $59,000 for coverage. “It’s like getting a $200,000 bonus,” he says.

Rutkowski isn’t the only neurosurgeon to leave Illinois recently. According to a spokesman for the state specialty society, the number practicing there has dropped by roughly a third over the past five years, scared away by rising malpractice rates, and by what happened to Rutkowski. Of those remaining, some are no longer doing high-risk brain surgery because they fear being sued.

With a cap on noneconomic damages, the plaintifff would’ve been sufficiently compensated (probably more than sufficiently since it’s doubtful he was even having any significant problems from the medical error in the first place) and the physican, his family and his office staff would not have gone through the hell that they did. Plus, his patients would not have been deprived of their physican, and the state would not have lost another neurosurgeon who will be very difficult to replace.

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