Whether to quickly settle an ED malpractice case or defend it vigorously at trial is purely a business decision — for everyone except the EP defendant, that is. “Everyone else is just counting dollars and figuring which is the cheapest way out,” says Jonathan D. Lawrence, MD, JD, FACEP, an EP at St. Mary Medical Center in Long Beach, CA.

Faced with the EP’s contention that the standard of care clearly was met, the defense attorney may counter, “It will cost $40,000 to put on a trial. And something bad happened to the patient. Maybe it’s not your fault, but the jury could award millions to this family.”

“The EP has got many more emotional irons in that fire,” Lawrence says.

Some EPs are so distraught by the ongoing litigation that they will do anything to put it behind them, including settling a very defensible case.

“It may not be very well thought out,” Lawrence notes.

On the other hand, some EPs dig in their heels, even when the facts of the case suggest settlement is clearly the best option. Lawrence testified on behalf of the plaintiff in a recent case with multiple defendants in which the EP’s care clearly was below the standard of care. Still, the EP refused to settle.

“Everyone else settled out — and the EP was left to face trial alone,” he recalls. “Fortunately for this physician, the gamble paid off, and she was found not liable.”

Jennifer L’Hommedieu Stankus, MD, JD, FACEP, an attending EP at Madigan Army Medical Center and founder of Gig Harbor, WA-based Comprehensive Medical Legal Consultants, says these factors make it more likely an ED claim will be settled:

  • if a lengthy, expensive trial is expected;
  • if an unfavorable legal climate exists, such as courts that tend to find in favor of plaintiffs or levy disproportionate judgments;
  • if the patient is very sympathetic;
  • if documentation is incomplete, making the case difficult to defend.

“The insurance company is a business that is always looking at risk and cost versus benefit,” Stankus notes. “Where there is an outside chance of a very large payout, settling will certainly be considered.”

Does EP Decide?

Assuming the EP’s professional liability contract has a consent to settle clause, the EP makes the final decision. “But there are things that insurance companies can do to put the pressure on,” Lawrence cautions.

The insurer might inform the EP that he or she will be responsible for any amount in excess of what it would cost to settle the case. In other words, if the jury returns a $1 million verdict, and the case could have been settled for $100,000, the EP is “on the hook” for $900,000.

Stankus says having the last word as to whether to settle a case is very important for EPs who believe the standard of care was met. “Any settlement, whether or not there was true malpractice, will land him or her in the National Practitioner Data Bank,” she notes.

Costs on both sides are always a factor. “The average cost of defending a lawsuit is approximately $30,000 to $40,000. For the plaintiff attorney, bringing one averages $100,000,” Stankus says, noting this gives the plaintiff’s attorney a strong incentive to settle early for as much as possible. “It minimizes the risk of a huge loss, and maximizes return on investment.”

On the defense side, settlement has to be a serious consideration if there is evidence of malpractice and the plaintiff’s attorney indicates a willingness to settle early. “This is particularly true in cases where there may be a large payout,” Stankus adds.

Settling baseless claims for “nuisance value,” however, is a poor strategy. “Once it is known that an insurance company will settle quickly and early, it follows that claims will go up,” Stankus says.

The fact that defendant physicians prevail in the vast majority of malpractice cases that go to trial is another consideration. (See box on previous page for current data on ED claims.) “Some insurance companies have a policy of defending all but the most egregious cases of malpractice,” Stankus says. “Over time, it is a cost-saving measure.”

SOURCES

  • Jonathan D. Lawrence, MD, JD, FACEP, Emergency Department, St. Mary Medical Center, Long Beach, CA. Phone: (562) 491-9090. Email: jonlawrence48@cox.net.
  • Jennifer L’Hommedieu Stankus, MD, JD, FACEP, Attending Physician, Madigan Army Medical Center Department of Emergency Medicine; Founder, Comprehensive Medical Legal Consultants, Gig Harbor, WA. Phone: (253) 820-9343. Email: jenniferlhs@me.com.

Data on ED Malpractice Claims and Lawsuits

Of all the emergency medicine claims and lawsuits from 2006-2015 in the Data Sharing Project of PIAA, a Rockville, MD-based insurance industry trade association, 65% were dropped, withdrawn, or dismissed, 19% were settled, 9% were defended at trial, 4% were resolved through alternative resolution or contract, and 3% were not specified.

  • A majority of emergency medicine claims and lawsuits (65%) were shown to lack merit. These claims were resolved when they were dropped, withdrawn, or dismissed, with no indemnity payment to the claimant, but with an average defense expense of $28,475.
  • Less than 10% of claims were resolved through a verdict, with the jury finding in favor of the defendant 96% of the time. The average expense to defend these claims was $127,090.